Ryanair expects return of flights in June, prepares for price war

16.04.2020 at 10:45

Travel news

Ryanair is steeling for an airline price war that it expects to win once coronavirus restrictions are lifted and passengers flock back to tourist destinations, Chief Executive Michael O’Leary told Reuters on Wednesday.

Brushing off forecasts of a sluggish recovery, O’Leary predicted a swift traffic rebound, with the pain coming instead from “massive price-dumping” that traditional airlines now seeking bailouts would struggle to keep up with.

His bullish outlook puts the Ryanair boss at odds with peers such as Lufthansa and analysts who see a return to 2019 traffic only around 2023-4. Plane manufacturers and airline body IATA have also warned of a slow recovery from the pandemic.

O’Leary also voiced dismay at the multibillion-euro aid packages sought by Lufthansa and Air France-KLM and said Ryanair was appealing against EU-approved French tax breaks that exclude airlines registered in other European states.

Ryanair assumes European flights will stay grounded until a “limited” resumption in June, O’Leary said. After that, a resurgence of intra-European travel will be driven by steep discounts on last-minute holidays in July-August.

“Lots of people across northern Europe have been locked up in apartments,” he said. “They will all want to go on holiday before the kids go back to school as long as they can do so in reasonable safety.”

Ryanair backs anti-coronavirus measures including masks and temperature checks for passengers and crew, while rejecting calls for planes to fly one-third empty.

Before too long, “volumes will be back on a normal footing but on lower pricing” O’Leary predicted. “The minute we’re about to start flying again we’ll start doing seat sales, and so will every other airline.”

But a low-cost model and robust balance sheet make Ryanair better prepared for a fare-slashing recovery, with pricing unlikely to improve before next year, he added.

“Whether it’s 9.99 euros, 4.99, 1.99 or 99 cents per seat, we almost don’t care – our critical thing in the short term isn’t to make money, it will be to get our pilots and cabin crew back flying and the aircraft back in the air,” he said.

For Ryanair, nonetheless, “2021 has every prospect of being a bumper year in terms of earnings,” O’Leary also predicted. “Pricing might be lower but oil prices will be lower” and airports will cut charges to encourage traffic growth.

Sounding another discordant note amid the coronavirus gloom, he said the summer of 2021 had huge potential as holidaymakers make up for the previous year’s thwarted plans.

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