The boss of no-frills airline Ryanair has warned that air fares will rise amid the energy price crisis with added pressure from surging inflation. The stark warning came from Michael O'Leary who claimed the post-pandemic travel boom will be badly-hit by an anticipated recession.
Mr O'Leary claimed some airlines could struggle to survive because of recession and rising costs of fuel and energy. Speaking at the launch of Ryanair's UK winter flights schedule, he said: “You would be crazy not to be worried about a looming recession and the energy crisis. But people will not stop flying.
“Many people have to fly for work and for weddings or funerals, and in a recession people get much more price sensitive. Some people may travel less, but we’ll see more people trading down to the lowest-fare operator which is us.
“The question is not can people afford to fly but can people afford to fly with British Airways or Lufthansa? The overall market will struggle. The market in 2023 and 2024 will not return to pre-Covid levels."
He warned: “A recession will significantly dampen the overall traffic recovery post-Covid. A lot of capacity is not coming back. Wizz Air us reducing winter capacity by 25 per cent.
“A recession will take out more of the competition. It’s inevitable that fares will go up. High oil prices mean they have to go up. There will be pressure on air fares into summer 2023.
“The energy crisis will affect the whole of Europe this winter. Where does inflation finish up? It depends how deep and dark the recession is and where the oil price settles.”
However, he predicted Ryanair would continue to grow despite the financial and operating pressure faced by the sector. He said: "We’ll grow as we’re the lowest-cost airline and have game-changer, fuel efficient Boeing 737 Max aircraft. It’s full steam ahead in what is a favourable market for us.”
