Airline boss says uncertainty over Ukraine jeopardized pandemic recovery
The European flying public should expect higher prices this summer when it comes to booking flights, Ryanair CEO Michael O'Leary has warned.
The cost of flying this summer will reach a "single-digit percent" high above pre-pandemic levels, the low-cost airline chief told BBC Radio 4's Today program on Monday.
He cited "demand for the beaches of Europe" during the summer vacation months as behind the anticipated price hike. He also pointed to the conflict in Ukraine and its impact on the price of fuel. Bookings are around 10% behind pre-pandemic levels, he told CNBC's Europe Squawk Box on Monday.
O'Leary said an expected economic downturn, an inflexible post-Brexit labor market in the UK and "continuing uncertainty" about the energy supply would lead to "inevitable fuel surcharges" in all competing airlines, whereas a very strong hedging position on jet fuel, 80%, allowed the airline to continue to offer lower prices to its customers.
Ryanair, Ireland's largest airline and the premier low-budget carrier in Europe, managed to weather the pandemic due to high passenger demand, a result of its ultra-low cost model.
O'Leary said that this high demand had caused "exuberant optimism" in recent years, which had since been tempered by the emergence of the Omicron variant of Covid-19. He said the specter of a resurgent pandemic and "negative newsflows" surrounding the Ukraine conflict could compromise the company's strong recovery.
The Ryanair chief said he expects the company to be "modestly profitable" in the coming fiscal year, and aims to serve 165 million passengers by the end of this fiscal year, beating its pre-pandemic record of 149 million in the summer of 2019. The intervening period saw the advent of Covid-19, with its catastrophic impact on the air travel sector.
Ryanair reported annual losses of $370.11 million (355 million euro) on Monday, a significant improvement over last year's reported loss of $1.06 billion (1.02 billion Euro).