Tuesday, May 30th, 2023

Ryanair boss says airfares could rise 10-15% this year

Ryanair CEO Michael O’Leary has said air fares could go up by between 10 and 15% this year, although he added they are unlikely to rise more than 20% as other airlines have predicted.

He said traffic was set to grow 10% this year for the low-cost carrier and the tempo of strong bookings could continue through the summer, driven in part by throngs of American tourists coming to Europe.

The Ryanair boss also said it was a “scandal” that French strikes had blocked many overflights.

The strikes have disrupted services between different countries such as the busy tourist market between Britain and Spain.

Airlines have to compensate passengers for long delays or cancellations under European passenger-rights laws but are unable to recover penalties from air traffic authorities when airspace is blocked, he told the A4E Aviation Summit in Brussels.

Tension between airlines and French controllers has been a recurring issue but escalated this year amid France’s growing political crisis over changes to the retirement age.

France’s DGAC aviation authority said it was applying minimum service rules for some flights but the airline industry wants this to apply to overflights, as well as domestic trips.

Michael O’Leary said today that airports were better prepared for delays this summer after widespread chaos last year but that he expected further air traffic control problems in coming months.

Airline leaders meeting in Brussels also stepped up calls for longer-term reforms to Europe’s fragmented airspace, which is separated along national lines, resulting in delays.

The European Commission has been working for years on a long-delayed reform called Single European Sky but political analysts say it is being held up by individual nations worried about the impact on jobs at national control centres.

EU Transport Commissioner Adina-Ioana Valean told the conference she hoped for some progress on the topic later this year

Earlier this month, Ryanair launched a petition aimed at getting one million signatures from passengers in order to force the European Commission to take action to prevent further disruption from French air traffic control strikes.

The airline says the EU needs to take steps to ensure overflights of France are allowed during French ATC strikes, in order to guarantee the fundamental freedom of movement.

Ryanair’s Michael O’Leary also said today that air fares could go up by between 10 and 15% this year, although he added they are unlikely to rise more than 20% as other airlines have predicted.

He said traffic was set to grow 10% this year for the low-cost carrier and the tempo of strong bookings could continue through the summer, driven in part by throngs of American tourists coming to Europe.

Ryanair says price still key to new Boeing jet deal

Michael O’Leary also said that aattractive discounts remained the key to securing a new plane deal with Boeing after the two sides resumed talks following an 18-month hiatus over jet prices.

He told Reuters that Ryanair was looking at two models – the roughly 200-seat 737 MAX 8200, which is already “performing well,” and the larger 737 MAX 10, which is still in development and awaiting certification.

A potential deal for 100 planes, plus 100 options, is likely to take several months to negotiate, he said in an interview on the sidelines of an A4E airline industry conference.

He also said he expected the 737 MAX 7, Boeing’s smallest model, to be certified in the first half of 2023 and the MAX 10 to win approval from regulators towards the end of the year.

Ryanair is looking for a significant discount for the 30 extra seats contained in the 737 MAX 10, the largest single-aisle model currently marketed by Boeing, to avoid diluting yields, or average revenue per seat, he said.

Talks resumed after Boeing chief executive Dave Calhoun and Stan Deal, head of its commercial division, approached Ryanair two months ago offering to get negotiations started again, O’Leary said.

“They are back talking to us; I think it takes maybe six, nine months to get a deal done,” O’Leary said.

The Ryanair CEO voiced support for Calhoun and said he hoped Boeing’s management would stabilise “over a number of years” following a spate of corporate and industry crises, adding the company had been through a rough patch on delivery delays.

Ryanair is one of Boeing’s largest worldwide customers.

In September 2021, it said it had halted talks for an order of the 737 MAX 10 because of a pricing dispute. Michael O’Leary told the Financial Times last week that talks had resumed.



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