Ryanair boss Michael O’Leary has predicted a ‘very, very dramatic recovery’ in air travel starting next month – and revealed ambitious plans to turbocharge his airline’s growth for the next decade.
The outspoken Irishman told The Mail on Sunday that British families are ‘ignoring’ the Government’s advice to avoid travel to countries on the amber list. He revealed that Ryanair had already taken 1.75million bookings for this summer by Friday.
O’Leary insisted the Covid vaccine rollout meant that European travel would be ‘back to normal’ by the autumn – barring any new Covid obstacles.
Outspoken: Michael O’Leary has predicted a ‘very, very dramatic recovery’ in air travel starting next month
He said Ryanair is now forecasting that passenger numbers will increase from 15 per cent of pre-Covid levels this month to 90 per cent by September.
In a remarkably upbeat interview, O’Leary shrugged off last week’s ‘traumatic’ €815million (£703 million) loss for the 12 months to March, insisting the budget airline would be one of the only carriers to grow after the pandemic.
He unveiled bold plans to buy hundreds of new planes – many of them larger than those in Ryanair’s existing fleet – add new routes and expand dramatically at Stansted and other low-cost airport bases.
O’Leary said: ‘We think there is going to be a very strong snap-back in demand from British families going abroad after staying at home last year.
‘In the last couple of weeks, we have seen UK families booking their summer holidays even if it’s on an amber list and there’s some uncertainty.
‘Most customers are now ignoring the Government’s mixed messages and just booking their flights. Everybody realises the restrictions are going to be gone by the time you get to the end of June and into July and August.’
Based on current trends, O’Leary forecasts that Ryanair’s passenger numbers will rise from 1.7million in May to five million in June, and eight million ‘or maybe ten million’ in July ‘That’s a very, very dramatic recovery,’ he said. ‘Because the bookings are flooding back, cash is now building strongly. We will be about the only airline expanding next year. Most of the rest of them will not be growing. They will be desperately trying to keep capacity tight and get air fares up so they return to profitability.’
Insisting that the days of lowcost flying are ‘far from over’, he said Ryanair’s plans to increase capacity would allow it to continue to offer cheaper fares than rivals such as British Airways.
O’Leary revealed he is so confident that global travel will bounce back after the pandemic that he is now in talks with Boeing about a new deal for planes to be supplied from 2026 to 2030.
Ryanair has already ordered 210 Max-8200 ‘Gamechanger’ planes over the next four years and will receive the first 60 of them by next April, taking its fleet to 510.
O’Leary said he is now in talks to buy ‘at least 100’ Boeing 737 Max 10 planes from 2026 – which each carry 230 passengers compared to Ryanair’s current maximum capacity of 197 passengers – and he hopes to agree a deal by the end of the year.
Once the new planes start being delivered, Ryanair will expand its airport bases across the UK, including Stansted, Bristol, Liverpool, Glasgow and Edinburgh. It is also opening new bases in Stockholm, Zagreb and Riga this year.
‘We will grow stronger in the next four or five years because of the pandemic,’ O’Leary said. ‘Partly because other airlines have gone bust, but also because we have been able to increase the size of our aircraft order with Boeing.’
In the short-term, he said prices would remain low this summer but air fares could rise by between 10 and 20 per cent next year and again in the peak season of 2023. ‘There will be very strong demand for European holidays next summer – and I think it is inevitable prices will rise.’
Airline industry veteran Willie Walsh, the former chief executive of BA and parent company IAG, told The Mail on Sunday: ‘Michael has pointed to prices being higher next year which I think is a valid point, because a lot of aircraft have been taken out of the system. So the industry is not going to get back to the same level of capacity in 2022 as we had in 2019.’
In May 2020, O’Leary told The Mail on Sunday that he had hoped to limit last year’s losses to ‘the low hundreds of millions of euros’. But the travel bans introduced during the second and third waves of the pandemic over the winter derailed the recovery.
Last week, Ryanair announced its record loss after passenger numbers plunged 81 per cent to 27.5million and revenues fell from €8.49billion to €1.64billion. It has raised a further €1.2billion through bond markets, increasing gross cash to €4.2billion and net debt to €2billion, up from €400million last year.
Investors who backed last week’s bond issue included the European Central Bank, investment giant Pimco and the Vatican Bank. ‘Pope Francis is now an investor in Ryanair,’ O’Leary joked. ‘As a proud Irish Catholic, I’m very pleased.’
O’Leary said he will use the cash to pay off Ryanair’s £600 million Government-backed Covid loan ‘by the end of this year’, as well as paying for the new planes. He said he had negotiated a ‘significant discount’ for the planes but would not disclose the price.
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