Michael O’Leary says Ryanair will be “the European low-cost carrier” after Covid

Ryanair chief executive Michael O’Leary has forecast a “strong post-Covid recovery” but accused rival carriers of wanting to keep aircraft on the ground next year to raise fares.

O’Leary said Ryanair would emerge from the pandemic as “the European low-cost carrier” alongside network airlines Lufthansa, Air France-KLM and British Airways-owner IAG, and questioned whether easyJet would remain “an independent fifth carrier”.

Speaking on a webcast hosted by European air traffic organisation Eurocontrol, O’Leary said: “The legacy airlines are going to be slow and squat on their slots. They are trying to maintain the [EU and UK] slot waiver. The legacy guys have taken out 10%-20% of capacity. I’m not sure that will come back. They want to come back with less capacity and higher prices. They want to keep planes on the ground next summer.”

The EU and UK have waived a rule that normally means airlines must use take-off and landing slots at constrained airports 80% of the time or lose them. The rule is suspended until March, but major airlines are lobbying for the waiver to be extended through summer 2021.

O’Leary insisted: “It is imperative we come back with more capacity. But we could be prevented if the EU extends the slot waiver.

“One of the critical issues is going to be can we lower prices – air traffic control charges, taxes – to get people flying again.”

O’Leary said: “I’ve been predicting Norwegian Air’s bankruptcy for two years. Eventually, it has come. The jury is out on whether easyJet survives as a fifth independent carrier or whether Wizz Air replaces it as number five.

“We will be the low-cost European carrier, with IAG, Lufthansa and Air France-KLM.

“EasyJet and Wizz can’t compete with Ryanair on costs. I don’t see Wizz as a lower-cost competitor. Its costs per aircraft have been rising faster than Ryanair’s. Wizz has much higher aircraft costs and higher airport costs than us.

“It has an advantage on labour costs in Eastern Europe but is beginning to understand operating in Western Europe is considerably more difficult. You will not get away with a tax-avoiding scam of employing people in Western Europe through an employment agency in Hungary and then paying them through Switzerland. Wizz will learn, as Ryanair did.”

Ryanair confirmed a multimillion-dollar order for 75 Boeing 737 Max aircraft last week to add to the 135 it already has on order.

O’Leary hailed the bigger version of the aircraft as a “game changer”, saying: “The Max will allow us to fly 4% more passengers [per flight] with 16% less emissions.

The Max was certified to return to service by US authorities last month after being grounded in March 2019 following two fatal crashes in five months, which killed 346 people.

O’Leary dismissed concerns about the safety of the aircraft, saying: “If you want to offload off the Max, you can go on the next available flight. But most people, like me, don’t know what aircraft they’re flying on.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.