Ryanair has said it will be the beneficiary of looming economic shocks, as it launched its biggest UK winter schedule while predicting short-haul aviation would not return to pre-Covid levels until 2025.
The chief executive, Michael O’Leary, said his airline was poised to overtake easyJet as the major carrier in the UK after expanding its operations this summer, and would “grow stronger in a recession”.
He said air fares would continue to rise between 3% to 5% in coming years and that the very lowest fares could be a thing of the past. “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.”
But he argued rivals would suffer more if customers tightened their belts, with rising energy prices in the wake of Russia’s Ukraine invasion fuelling high inflation.
Speaking at a press conference in London, O’Leary said: “Consumer price inflation is going to be nothing compared to the energy shock coming this winter. In every consumer downturn, we grow faster. What we see is far more people trading down to the lowest fare operator, like Ryanair.
“The question is, how you are going to be able to afford to fly on BA or Lufthansa. We will grow stronger in a recession.”
The Ryanair boss said: “I think that the overall market will not in 2023, 2024, return to pre-Covid traffic levels. They will probably lag behind.
“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.”
He said Ryanair had hedged most of its fuel for this year at $63 to $64 (£54 to £55) a barrel, allowing it to keep costs down. It has added 21 new routes from the UK for winter, with more pilots joining as more of its Boeing 737 Max “gamechanger” planes are delivered, despite production delays in Seattle.
O’Leary added: “I’ve never tempered a growth plan in my life – it’s full steam ahead.”
He said Ryanair would continue to expand, with a target of 225 million passengers in 2026, about a third more than the forecast for this year. He said the airline’s reliability, with the fewest cancellations among major carriers this summer, just 3%, was being rewarded with record passenger growth. Ryanair was now “one of the very few airlines in Europe negotiating with airports” to add capacity, he said.
He said: “People will not stop flying. They have to fly for work, to see family, and lots have been locked up for two years … People are on the move again. We’re poised to be the beneficiaries.”