Outspoken Ryanair CEO Michael O’Leary gives wide-ranging Reuters talk

posted on 7th October 2019 by William Hayes
Outspoken Ryanair CEO Michael O’Leary gives wide-ranging Reuters talk

Ryanair Chief Executive Michael O’Leary offered his thoughts on topics including Brexit, environmental taxes and Thomas Cook during a broad Reuters Newsmaker discussion forum.

Political craziness

The Irish airline boss, who campaigned for the UK to remain in the EU in the 2016 referendum, said he did not expect the “political craziness” in Britain to have any long-term impact on the company’s business.

“If you look out long enough, I don’t think Brexit has any effect on our business,” said O’Leary, adding that the British government would have little choice but to negotiate a favourable trade deal, due to the harm a no deal Brexit would do to the UK economy and to peace in Ireland.

The UK and the EU currently have a deal in place allowing flights to continue as normal in the short-term, with the Open Skies aviation agreement also needing to be re-negotiated as part of any exit deal Britain agrees with the 27-country trading bloc.

Wait out price rises

O’Leary also said his company can wait before placing any large aircraft orders, until price rises triggered by the global grounding of the Boeing 737 MAX begin to subside.

“I think we have to wait for the next turn in the cycle,” he said at the London event.

“At the moment there are no pricing opportunities on aircraft. The MAX has been grounded, Airbus are pricing up, Boeing are pricing up because they’ve nothing to sell.”

Talks with Airbus for the A321neo aircraft, which Ryanair is interested in for its new Laudamotion business, were going slowly, said O’Leary, while the Boeing 737 MAX 10 is also of interest for its main fleet, albeit, only “at the right price.”

Unfair environmental taxes

European environmental tax hikes are likely to force more low-cost carriers out of business, said O’Leary, as new proposals would force cheaper airlines to bear most of the increased burden.

Some European governments, such as France, have suggested new airline taxes that contain exemptions for connecting flights, which would help traditional carriers such as Air France-KLM.

“You can’t exempt connecting transfer traffic from environmental taxes,” said O’Leary, adding that Ryanair flights record a lower carbon output per passenger due to its high load factors.

“As we cram you all in together, you can take comfort from the fact that you’re having the least impact on the environment of any passenger airline group in Europe,” he said.

CAA should do better

Although he praised the Civil Aviation Authority (CAA) for the manner in which it carried out Operation Matterhorn (the name given to the mass repatriation of stranded British citizens following Thomas Cook’s collapse), O’Leary said it should never have awarded Thomas Cook a licence when it did, mere moths before its collapse.

“How you can license Thomas Cook in April as fit to fly for another 12 months and then it goes bust in September. [It] is something the CAA needs to address,” he said.

O’Leary had harsh words about the package holiday industry in general, claiming it was “screwed, it’s over.”

Travel industry figures generated by travel trade association Abta show that half of all British holiday-goers opted for a package holiday last year, with German travel agent Tui faring better than Thomas Cook.

Ryanair is likely to receive a slight boost in passenger numbers from the demise of Thomas Cook, although it expects the figure to remain more or less flat at 46.3 million.

O’Leary also had to face questions about the controversial £89 million bonus he could be awarded over the next five years, which was passed by a majority of just 50.5 per cent of shareholders at the last annual meeting.

The Ryanair CEO dismissed the criticisms as an “easy target” for the media, suggesting they should focus on Premier League footballers’ pay instead.