Low cost airline CEO Michael O’Leary told reporters he expects to see his airline, Ryanair, cruise through a recession as customers trade down from his more expensive rivals to ease the strain on their pocketbooks. As fuel costs skyrocket now, he sees customers increasingly moving away from full service airlines like BA and Luftansa.
At a London press conference, He broke the news that Ryanair is about to overtake EasyJet as the largest carrier in the UK after expanding this summer, and that he thinks the carrier will only, “grow stronger in a recession.”
He added, “Consumer price inflation is going to be nothing compared to the energy shock coming this winter,” before adding that after pricing in high fuel costs to its future plans, the trimmed-down nature of his carrier’s operations will give it a sizable advantage over its competitors.
He said, “In every consumer downturn, we grow faster. What we see is far more people trading down to the lowest fare operator, like Ryanair.”
He went on, “The question is: How’re you going to be able to afford to fly on BA or Lufthansa? You’d be crazy not to be worried about a looming recession and energy challenges but we at Ryanair are heading into winter with a fortuitous situation.”
A combination of factors have driven energy prices dramatically higher worldwide this year. As demand increased into a tight market, that had scaled back production during the pandemic, there was an initial rise. That was then impacted by the shock of Russia’s invasion of Ukraine. Then the Western powers imposed sanctions on Russia’s supply which only tightened the market as supply flows were rerouted, and Europe was cut off from Russia’s supply.
At present in Europe, jet fuel is priced roughly double what it cost a year ago, according to International Air Transport Association figures.
O’Leary predicted that amid these fuel prices, fares will continue to rise between 3% and 5% in the coming years. He added, “The era of low fares is not over but the €9.99 fares, really cheap and cheerful fares, are over for a couple of years.”
