Ryanair ready to pounce in post-COVID shake-up

With rivals floundering due to the COVID-19 pandemic, Ryanair CEO Michael O’Leary predicts huge opportunities for the Irish carrier when the crisis abates. Tony McDonough reports

Michael O'Leary
Ryanair chief executive Michael O’Leary says the airline can prosper post-COVID

 

Ryanair chief executive Michael O’Leary says the low-cost airline is ready to take full advantage of what he calls the biggest “clean-out” of the aviation sector in a generation.

Since March, both airlines and airports have taken a huge hit from the COVID-19 pandemic. And, despite vaccines now being rolled out, disruption to global air travel is likely to continue well into 2021.

However, in an interview with the FT, Mr O’Leary said the crisis now provided a huge growth opportunity for the Dublin-based carrier. He said Ryanair was in talks with airports across Europe with a view to bolstering its capacity.

Ryanair itself has been hit hard by the impact of the pandemic. In the year to March 31, 2021, it expects passenger numbers to have totalled 38m, a massive fall on the 154m forecast before the crisis began. Its main rival easyJet has already reported full-year losses of more than £1bn.

At Liverpool John Lennon Airport, where both airlines normally operate more than 30 routes each, capacity has been cut significantly. This winter, Ryanair has slashed capacity at Liverpool by 50%. It will fly to just 10 countries on 20 routes.

Boeing 737 MAX
Ryanair has ordered 210 Boeing 737 MAX aircraft

 

But Mr O’Leary sees brighter times ahead for the company. With weaker rivals seeking state bailouts it is likely some will not survive, creating and gap that Ryanair is ready and willing to fill. In preparation it has placed a £16.3bn order for 2010 Boeing MAX aircraft, which he says will be a “game-changer’ in terms of capacity and fuel efficiency.

He told the FT: “I have never in my 30 years in the industry seen such a clean-out. 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.”

One rival, Norwegian, has entered administration after failing to secure additional government aid. Referring to Ryanair’s talks with airports in Italy and Spain, which were Norwegian customers, Mr O’Leary added: “Somebody has to step up and take that capacity.”

Mr O’Leary predicted that 100m 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. He said that there is a “working assumption” that Ryanair will fly between 90m and 130m passengers in the 12 months to March 2022.

He added: “We have consistently been planning for a reasonably quick recovery and constantly disappointed. What has changed is the vaccines are arriving… The issue for our industry is, is that recovery in May or August? We just don’t know.”

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