Era of Cheap Air Travel Over: Ryanair's Michael O'Leary
August 11, 2022.
Ryanair's boss has warned that the budget airline's trademark one euro and 10 euro fares will not be seen for a 'number of years' due to soaring fuel prices - as hard-hit British holidaymakers face the biggest squeeze to their living standards in 60 years, writes Mail Online's Jack Wright
Michael O'Leary said he expects Ryanair's average fare to rise by about 10 euros over the next five years, from around 40 euros (£33.75) last year to roughly 50 euros by 2027 - and that 'many millions' of people will ditch the likes of British Airways and EasyJet as flight prices rise across the board.
He told BCC Radio 4's Today programme: 'I don't think there's going to be ten euro flights anymore because oil prices are significantly higher as a result of the Russian invasion of Ukraine. Our average fare, which last year was 40 euros... we think that 40 euros will need to edge up to 50 euros in the next five years.
Ryanair's Michael O'Leary
Image via Mail Online
'There's no doubt that at the lower end of the marketplace, our really cheap promotional fares - the one euro fares, the 0.99 euro fares, even the 9.99 euro fares - I think you will not see those fares for the next number of years. 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.'
In July last year, Ryanair launched £5 one-way tickets to European destinations including Athens in Greece, Lisbon and Faro in Portugal, Madrid and Seville in Spain, and Dublin in Ireland as Covid restrictions were eased. However, the cheapest flights to these cities from London Stansted on August 18 are now significantly higher than this. A one-way flight to Lisbon now costs £130, while to Athens it is £189 and £130 for Madrid. It is even £149 for a flight from London Stansted to Dublin. The cheapest of the lot is a flight to Faro for £60.
Graphic via Mail Online
Across the board, average flight prices based on searches for European routes departing from the UK have surged by around a third since pre-Covid, new data shows. A single ticket from all London airports to Istanbul and Antalya in Turkey now cost £588 and £456 respectively on average, up 62% and 44% this week from the same period in 2019. The average cost of a flight to Larnaca is now £446, up from £299, to Zurich in Switzerland around £380, up from £178, and around £360 to Athens up from £252 three years ago.
Travel experts say that the price increase is being caused by a combination of rampant inflation and a surge in demand since the end of lockdown restrictions. But the impact of long periods of grounded flights, rising costs and savage air industry job cuts during the crisis have left some carriers struggling to meet the demand.
However, Mr O'Leary said he had 'very little sympathy' for airports which have been mired in chaos, saying they knew schedules months in advance. He also accused Heathrow, which has been one of the worst affected airports and which has capped the number of passengers coming to the airport over the summer, of 'mismanagement'.
The Ryanair boss added: 'People are going to get much more price sensitive on energy. you're looking at inflation that's double digits in the UK, it's not just energy, it's food, its rent, it's going to be almost everything the normal family is purchasing in the UK.
'History has taught us that you enter into a period of inflation... it greatly damages people on lower incomes, because there's no way that salaries and social welfare payments will keep track of inflation. It's only when you get inflation under control that you have real growth in wages, real growth in social welfare payments, and a better economy and a better lifestyle for your citizens.'
Surging costs have been across the board, including at discount carriers such as Wizz Air, which previously warned that ticket prices would rise by around 10% over the summer.
Paul Charles, CEO of travel consultancy The PC Agency, told MailOnline: 'Flight prices are sky-high at the moment, literally sky-high, because of pent-up demand after two years of Covid restrictions and people having saved a lot of money during lockdown.
'For many people, this is the first holiday they've had in a couple of years - they'll be wanting to escape the dreary news about inflation and the cost of living crisis, but they'll also be wanting to see friends and family from abroad who they've not seen in a while. All of this demand drives up prices.
'Some of this is also being driven by a reduced number of available flights, what with airlines cancelling large numbers of them.' He added: 'I wouldn't expect prices to start falling for a while yet, probably not until the sales begin in around October - but I would also say that if you're able to get away, if you've saved, then you should still try to get abroad while you can.'
A spokesperson for travel agency Kayak said: 'We've seen flight searches on Kayak surpass pre-pandemic levels throughout this year - clearly showing that people in the UK want to travel again.
'But the industry is struggling to keep up with demand, and prices are going up. In recent weeks, we've seen average flight prices based on searches for European routes departing from the UK are up by about 30% compared to 2019 levels.'
© Jack Wright / Mail Online
Images - Tyler McDowell unless stated otherwise.