Ryanair CEO Michael O’Leary expects people to continue flying despite high inflation.
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Ryanair’s CEO told the BBC its average fare will be about €50 over the next five years.
Michael O’Leary blamed the 25% increase on soaring fuel costs.
He still expects people to fly frequently, with more travelers switching to cheaper airlines.
Travelers expecting the return of rock-bottom airfares on offer before the pandemic struck should not hold their breath.
Michael O’Leary, the boss of Ryanair — Europe’s largest carrier by passenger number — told the BBC its average fare will be about €50, or $51.40, over the next five years, compared with an average of €40 last year.
“There’s 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,” O’Leary told BBC Radio 4’s Today program.
He blamed the rise in ticket prices on soaring energy prices that have pushed up the cost of jet fuel by about two thirds over the past 12 months.
Along with staff wages, fuel is the biggest cost for airlines but prices can be difficult to predict. That leads many to “hedge” against increases by agreeing contracts to buy fuel for a certain price, but this tactic can backfire if prices suddenly fall significantly.
Despite the high rate of inflation giving consumers less money to spend, O’Leary still expects people to fly often but believes they will choose cheaper airlines such as Ryanair, he told the BBC.
“We think people will continue to fly frequently, 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.”
Demand for tourism has rebounded strongly in 2022 after two years of Covid-induced restrictions with cooped-up travelers returning to the skies in huge numbers, putting pressure on airports and airlines still struggling to recruit staff after mass layoffs earlier in the pandemic.
Ryanair carried 16.8 million passengers in July, compared with 9.3 million in the same month last year, in planes that were 96% full, up from 80%. The airline carried 142 million passengers in the first seven months of the year – 102 million more than 2021.