Ryanair benefits if recession hits Europe, O’Leary stresses
THE recovery of Europe’s aviation sector could still be dashed if Russia’s invasion of Ukraine intensifies or a new Covid variant emerges this year, Ryanair boss Michael O’Leary has warned.
While warning that Europe is likely to experience a deep downturn or even recession later this year, Ryanair will benefit as customers switch to cheaper airline tickets, he stressed.
“In a recession, low-cost carriers, whether Primark, Ikea, Lidl or Ryanair, will do better,” he said. “People will fly, but they will switch to Ryanair from the more expensive carriers.”
When the group released full-year results yesterday, Mr O’Leary said there was “no doubt” that a strong recovery was underway in the aviation sector.
And he said that while customers benefited from cheaper fares, they would be moving forward for the important summer season.
“I would attribute most of it to the Russian invasion of Ukraine,” Mr O’Leary said of the cheaper fares it has been offering in recent weeks. “Easter had looked like it was going to be very strong and then it fell over because bookings plummeted for about four or five weeks after the invasion of Ukraine.”
He said the invasion of Ukraine “cost” us up to 800,000 seat bookings over Easter as the war prompted people to postpone travel plans.
He added that Ryanair’s advance bookings for Q2 – July, August and September – are currently about 10 per cent down on pre-Covid Q2 levels. But the pricing looks stronger.”
However, he cautioned that there are downside risks to Ryanair’s expectations.
“If there is negative news about Covid or Ukraine… then that could fall again,” he said of expected summer performance. “We were quite scarred by the experience we had with Omicron, which damaged Christmas in the short term.”
Ryanair yesterday reported a loss of 355 million euros for the 12 months to the end of March. This contrasted with a loss of just over EUR 1 billion in the previous financial year. Revenue jumped from €1.64 billion to €4.8 billion, and the number of passengers rose from 27.5 million to 97.1 million.
Mr O’Leary said Ryanair expected a “modest earnings recovery” this financial year.
“We are not sure we will return to pre-Covid profitability, which would be just over €1bn after tax. We should have a reasonably strong first half of the year, but it all depends on what the losses will be in the second half,” he said.
Mr O’Leary has also blown up Boeing, saying its management is “running around like headless chickens”.
He said he ” wholeheartedly ” agrees with the derogatory comments made by aviation executives in relation to Boeing in recent weeks.
“They are losing market share to Airbus with a fist and don’t seem to be responding appropriately,” he said. Ryanair is one of Boeing’s largest customers.
“Seattle needs a restart, and fast,” he said of Boeing’s main manufacturing base. Mr O’Leary said Ryanair is currently looking for 50 used Boeing or Airbus aircraft.
https://www.independent.ie/business/irish/ryanair-to-benefit-if-recession-takes-hold-in-europe-oleary-insists-41656232.html Ryanair benefits if recession hits Europe, O’Leary stresses