As the global airline industry faces its worst crisis in decades due to the coronavirus pandemic, Ryanair (RYA.L) boss Michael O’Leary has said that “seismic changes” provide a “growth opportunity.”
The chief executive of the low-cost carrier told the Financial Times that the opportunities for growth in the sector were even greater than the 2008 financial crisis and the 11 September terror attacks.
O’Leary added that the pandemic had brought about the biggest “clean out” of the industry for a generation, and revealed that Ryanair was in talks with airports across Europe to bolster its capacity.
“I have never in my 30 years in the industry seen such a clean-out,” he told the FT in an interview.
“The real seismic change from COVID will be the growth opportunities across Europe. They are much greater than after the financial crisis or 9/11,” he said.
COVID-19 has hit the aviation industry hard, with a slew of airlines folding, and others forced to shed jobs and embark on major cost-cutting drives.
As a result, it has created a window for airlines that have survived the impact, to fill the gaps once people start flying again.
Thomas Cook and Flybe have collapsed, while Norwegian (NAS.OL) — which was a big operator in the EU — entered administration after failing to secure additional government aid.
Detailing Ryanair’s talks with airports in Italy and Spain, which were Norwegian customers, Mr O’Leary said: “Somebody has to step up and take that capacity.”
The aviation industry is one of the sectors most impacted by the pandemic. In October it was reported that Heathrow airport lost its status as Europe’s biggest airport, with bosses warning the UK was playing catch-up on coronavirus testing for passengers.
And a recent report stated that global air traffic has seen a significant drop of 60% to 1.8 billion passengers in 2020 in the wake of the pandemic.
Looking ahead post-coronavirus, he predicted that 100 million of his competitors’ seats would be taken out over the next 18 months, which would result in reduction of around 15% of normal passenger traffic.
Budget airlines are expected to spearhead the recovery among airlines, given the short-haul travel market will rebound faster than intercontinental and business travel.
As such, O’Leary said that Ryanair, already EU’s largest airline, was poised to exploit that trend.
Ryanair, which has seen its passenger levels dwindle, expects to carry just 38 million passengers this year, a fifth of the 2019 total. However, it has already signalled its ambition by securing a discounted order for Boeing’s 737 Max aircraft.
The carrier saw a “noticeable but single digit” spike in bookings over the past month, albeit from a “very, very low base,” O’Leary said.
He added that there is a “working assumption” that Ryanair will fly between 90 million and 130 million passengers in the 12 months to March 2022, explaining: “We have consistently been planning for a reasonably quick recovery and constantly disappointed. What has changed is the vaccines are arriving.”
Speaking on the recovery, he added: ‘The issue for our industry is, is that recovery in May or August? We just don’t know.”
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