An aviation downturn is “imminent”, warned Ryanair chief executive Michael O’Leary this week as fellow airline chief Carston Spohr of Lufthansa insisted “I am against insolvency protection”.
O’Leary issued the warning at an Airlines for Europe (A4E) summit in Brussels on Tuesday, saying: “The next downturn is imminent. There will be other carriers that fail in Europe this year.”
Three European airlines failed last year. Alitalia of Italy went into administration in May, Air Berlin of Germany filed for insolvency in August and ceased flying in October, and Monarch Airlines of the UK also failed in October.
Asked which carrier might be next to fail, O’Leary repeated a claim he made last September, saying: “Norwegian will be the next one.”
Norwegian Air is a member of A4E, but chief executive Bjorn Kjos was not at the summit. The low-cost carrier has dismissed claims it is at risk and announced substantial growth in long-haul services this year despite revealing greater than expected losses last month.
Spohr said: “We would all be better at dealing with a downturn now, although there are some things you can only do in a downturn.”
He added: “I’m not asking for a downturn, but if there is one it will help make the industry more healthy.”
But Spohr insisted: “I am against insolvency protection for consumers because they should choose [to fly with] airlines that are healthy.”
O’Leary said: “With the assistance of politicians, we can have a very healthy industry.
“Low cost carriers like us [Ryanair] will increasingly feed into the hubs of full-service carriers. Fares will continue to fall. We will continue to grow.”
Willie Walsh, chief executive of International Airlines Group (IAG) which includes British Airways, Iberia and Aer Lingus, said: “The industry has changed. This is the best I have seen it.
“The poor performers are disappearing and capacity is being provided by those operating more efficiently.”
He added: “You can blame a lot of airlines’ management for the losses in the industry historically.”