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Ryanair is gearing up for an airline price war that it hopes to win once coronavirus restrictions are lifted and passengers return en masse to tourist destinations, chief executive Michael O’Leary told Reuters.
Ignoring expectations of a slow recovery, Michael O’Leary has forecast a rapid rebound in traffic.
He said the pain would come instead from “massive price dumping” that traditional airlines now seeking bailouts will have a hard time keeping up.
His optimistic outlook puts the Ryanair boss at odds with colleagues like Lufthansa and analysts who see a return to 2019 traffic only around 2023-4.
Aircraft manufacturers and the body of the IATA airline have also warned of a slow recovery from the pandemic.
Michael O’Leary also expressed dismay at the billion-dollar aid packages sought by Lufthansa and Air France-KLM, saying Ryanair was appealing against EU-approved French tax exemptions that exclude airlines registered in other states. Europeans.
An Air France-KLM spokeswoman declined to comment.
Ryanair assumes that European flights will remain on the ground until a “limited” restart in June, O’Leary said. After that, a revival of intra-European travel will be fueled by huge discounts on last-minute vacations in July and August.
“A lot of people in northern Europe have been locked in apartments,” he said. “Everyone will want to go on vacation before the children return to school as long as they can do so with reasonable security.”
Ryanair supports anti-coronavirus measures that include masks and temperature controls for passengers and crew, while rejecting requests for planes to fly an empty third.
Before long, “volumes will return to normal but at lower prices,” O’Leary predicted. “The moment we are about to start flying again, we will start selling seats, and so will any other airline.”
But a low-cost model and a solid balance sheet make Ryanair better prepared for a recovery of reduced fares, with prices that are unlikely to improve before next year, he added.
“Whether it’s € 9.99, € 4.99, € 1.99 or 99 cents per seat, we almost don’t care: the important thing in the short term is not making money, it will be to make our pilots and cabin crew fly again and the plane back in the air, “he said.
However, for Ryanair, “2021 has every chance of being an excellent year in terms of earnings,” Michael O’Leary also predicted.
“Prices may be lower, but oil prices will be lower,” and airports will reduce charges to encourage growth in traffic.
Sounding another jarring note amid the coronavirus gloom, he said the summer of 2021 had great potential as tourists made up for the foiled plans of the previous year.
Michael O’Leary said he planned to hold all existing Boeing 737 MAX aircraft orders and even hung up on the possibility of adding more of the aircraft currently on the ground, and repeated Ryanair’s habit of buying when demand and prices are low.
“I don’t think there are many airlines right now looking to order more planes,” he said. “I think prices would be quite high in the next 12 months.”
O’Leary said he expected Boeing to resume production of 737 MAX in the second half of 2020, with the first order for 135 MAX aircraft to arrive at Ryanair in late 2020 or early 2021.
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