-
Ryanair
- IATA/ICAO Code:
- FR/RYR
- Airline Type:
- Low-Cost Carrier
- Hub(s):
- Dublin Airport, London Stansted Airport, Milan Bergamo Airport
- Year Founded:
- 1985
- Airline Group:
- Ryanair Group
- CEO:
- Eddie Wilson
- Country:
- Ireland
Are airfares getting too cheap? In an almost ironic twist, Ryanair chief Michael O’Leary seems to think the current low-cost carrier model is unsustainable across the coming years.
Sky-high prices
Speaking to the Financial Times over the weekend, O’Leary has warned that airfares are rising as the post-pandemic aviation industry faces sky-rocketing fuel prices and gradually increasing sustainability levies. O’Leary noted that the average fare price for a Ryanair passenger will likely jump by 50% to around €60 by 2025, reflecting the sharply increasing costs associated with flying. He said,
“It’s got too cheap for what it is. I find it absurd every time that I fly to Stansted, the train journey into central London is more expensive than the airfare."
“I don’t believe air travel is sustainable over the medium term at an average fare of €40. It’s too cheap at that. But I think, you know, it will still be very cheap and affordable at €50 and €60.”
Average fares from London to European hot spots across the Mediterranean have rapidly increased in the past year, though remain lower than ticket prices in 2012, according to data compiled by Kayak.com and the newspaper.
The airline’s cost-cutting measures have ensured its prices will remain low through 2022, having hedged its fuel at $65 per barrel prior to the Russian invasion of Ukraine; however, O’Leary believes that fuel prices can be expected to remain “structurally higher” until the late 2020s as the industry weans itself off Russian oil and gas.
Staff shortages?
O’Leary also took the opportunity to slam the UK government’s handling of Brexit, discussing the disastrous fallout that has prevented airlines from recruiting European workers, prolonging the industry-wide staff shortages that have been plaguing carriers and airports for months.
Additionally, O’Leary took the opportunity to slam the UK government, discussing the “disastrous” Brexit deal that has stopped airlines from recruiting European workers. O’Leary added,
“This is without doubt one of the inevitable consequences of the disaster that has been Brexit. Withdrawing from the single market, just so that they can say ‘We got Brexit done’ was the height of idiocy. But then they are idiots.”
In June, fellow low-cost carrier easyJet reflected those sentiments, with CEO Johann Lundgren blaming the UK’s withdrawal from the European Union for its staff shortages in an interview with The Independent. He said,
“The pool of people is smaller, it’s just maths. We have had to turn down a huge number of EU nationals because of Brexit. Pre-pandemic we would have turned down 2-2.5% because of nationality issues. Now it’s 35-40%”.
Ryanair was one of the few major European airlines to avoid staff shortages through its post-pandemic return to operations. The carrier retained a significant portion of its crew through 2020 and 2021, choosing to cut pay instead of roles. However, active staff members did not idle, with the airline keeping its teams in the air to be “ready to rock and roll” once demand returned.
O’Leary has refused to disparage its competitors’ decisions through the pandemic, instead choosing to sympathize with the state of the industry, noting,
“I have a lot of sympathy, and I would not be critical of competitor airlines. Covid has been unbelievably difficult to manage your way through.”
The UK government has been working towards minimizing disruption across the country’s airports through a predicted busy summer season. On Sunday, transport secretary Grant Shapps announced the passing of legislation to accelerate security checks, allowing new employees to settle into their roles faster.
What are your thoughts on O’Leary’s recent comments? Have you noticed your airfare prices rising? Let us know in the comments.
Sources: The Financial Times, Bloomberg, The Independent