Ryanair boss Michael O'Leary signals the end of ultra-low fares

Airline has weathered much of the storm of Covid but says the cost-of-living crisis is having an impact

A Ryanair plane takes off from Budapest Airport. The airline's boss Michael O'Leary has said the days of super cheap fares will not return for many years. AP
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Ryanair, the budget airline that was among the pioneers of super low fares, will no longer be able to offer such cheap deals, its chief executive has said.

The trademark €1 and €10 ($1.21 and $12.15) fares will not be available for a “number of years” due to rising fuel prices, Michael O’Leary said.

In an interview with BBC Radio 4’s Today programme, Mr O’Leary said he expected Ryanair’s average fare to rise by about €10 over the next five years, from about €40 ($48.61) last year, to about €50 by 2027.

He told the broadcaster: “There is no doubt that at the lower end of the marketplace, our really cheap promotional fares — the €1 fares, the €0.99 fares, even the €9.99 fares — I think you will not see those fares for the next number of years.”

Ryanair has avoided much of the cancellations that have blighted other airlines such as easyJet and British Airways.

Mr O'Leary has been praised for holding steady during the Covid pandemic and not shedding staff in the same way as his competitors did.

He said he had been “part lucky and part brave” in his decision to ramp up training and recruiting last year, long before travel restrictions were dropped.

Mr O'Leary said he had “little sympathy” for airports that have demanded cancellations as they had notice of the schedules and should have been better prepared.

Heathrow has introduced a daily passenger cap to try to avoid scenes of chaos in terminals and several last-minute cancellations.

Although the increasing fuel prices, which are affecting the airline’s fares are also wreaking havoc on people’s disposable incomes, Mr O’Leary is confident the number of customers will remain steady.

Instead, he believes travellers will flock to lower-cost alternatives such as Ryanair and easyJet.

“We think people will continue to fly frequently,” he said. “But I think people are going to become much more price sensitive and, therefore, my view of life is that people will trade down in their many millions.”

In July, Ryanair posted an after-tax profit of €170 million ($174m) for the three months to the end of June, its first profit in the quarter in three years but well short of pre-coronavirus profit levels.

At the time, he criticised post-Brexit rules which he said still made it difficult to recruit staff.

“I can get visas to bring Moroccans to come in and work as cabin crew, but I can't get visas for Portuguese or Italians or Slovakian youngsters,” Mr O'Leary said.

Mr O’Leary today waded into the Tory leadership contest, saying the next prime minister should have the “backbone” to secure a deal with the EU to open up the free movement of labour.

“I think the first thing they should do to boost the British economy is prioritise a trade deal with the European Union — a good starting point for that would be to open up the free movement of labour between the UK and Europe once more,” he said.

Mr O’Leary, who said he accepted the result of the 2016 Brexit referendum, said: “You have to accept that you are not going to get elected by a very narrow 180,000 electorate of the Tory party membership if you advocate common-sense policies.

“But once you do become prime minister, you should have enough backbone to lead the UK economy forward and the starting point for that should be a free trade deal with the European Union.”

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Updated: August 11, 2022, 8:29 AM