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Hospitality Ireland Presents Round-Up Of Ryanair AGM Day News

Published on Sep 17 2021 12:30 PM in General Industry tagged: Trending Posts / Ryanair

Hospitality Ireland Presents Round-Up Of Ryanair AGM Day News

Hospitality Ireland presents a round-up of the Ryanair news from the day of the airline's annual general meeting (AGM), Thursday September 16.

Ryanair CEO Sees 'Significantly' Higher Plane Ticket Prices Next Summer

Ticket prices for short-haul flights across Europe next summer will be significantly higher than they were before the COVID-19 pandemic, Ryanair Chief Executive Michael O'Leary told Reuters on Thursday September 16.

O'Leary said bookings over the coming months were "patchy", with some periods of extraordinary demand around school holidays in October and at Christmas, while current prices were low.

"Prices will rise I think during October and at Christmas and I think prices into next summer will be significantly stronger than they were pre-COVID because there's about 20% less capacity in the short-haul market across Europe," O'Leary said in an interview after the airline's annual general meeting.

Ryanair 'Couldn't Care Less' About Another Boeing Order As It Lifts Its Growth Target

Ryanair lifted its five-year passenger forecast on Thursday September 16, saying the delivery of an existing Boeing order and increased use of older aircraft would allow it to grow faster without the need for an additional large plane deal.

Europe's largest low cost carrier last week abruptly ended talks with the US plane maker over a new order of the larger 737 MAX 10 jets, worth tens of billions of dollars, due to differences over price.

Shares of the airline jumped 7% on Thursday September 16 after it raised its passenger growth forecast.

"If we don't do another order until 2025, frankly we couldn't care less. The one great thing about the airline industry is we know there's going to be another crisis in five years' time (to drive down jet prices)," Chief Executive Michael O'Leary told an analyst call after Ryanair's annual general meeting.

The Irish airline, one of Boeing's biggest customers, will keep talking to the planemaker, O'Leary said in an interview, adding that relations between the two remain "very good".

However, O'Leary has said he is willing to wait years for Boeing to drop its prices and on Thursday he said Ryanair had enough aircraft to fly 225 million passengers a year by 2026, up from 200 million previously forecast.

O'Leary told Reuters that to meet that target Ryanair would sell fewer second-hand planes, on top of the planned delivery of 210 of Boeing's 197-seat MAX 200 model over the next five years. It may also buy or lease a small amount of current generation planes, he added.

Ryanair had been in talks to order 100 of the 230-seat MAX 10 for delivery from 2026 to 2030 with an option for 100 more before the talks were cancelled, O'Leary said.

He added that the boost to its passenger forecast reflected large pent-up demand in Europe and the gaps that have appeared as rivals fail or cut capacity.

Ryanair flew 149 million passengers a year before the pandemic and expects to fly close to 100 million in its financial year to the end of March 2022.

O'Leary said bookings over the coming months were "patchy", with some periods of extraordinary demand around school holidays in October and at Christmas, while current prices were low.

However, he said that he expected ticket prices for short-haul flights across Europe next summer to be significantly higher than they were before the pandemic because there is about 20% less capacity in the market.

Ryanair's shares were up 7% at €16.49 by 1130 GMT on Thursday September 16, and have gained 7.6% since the start of this year.

European Stocks Rise As Travel Shares Jump On Ryanair Forecast

European stocks rose on Thursday September 16 as travel stocks snapped a four day losing streak after Ryanair lifted its long-term traffic forecast, offsetting concerns about China's slowing economy that dragged down miners.

The pan-European STOXX 600 index climbed 0.4%, bouncing off a six-week closing low hit in the previous session.

Travel & leisure stocks rose 3.4%.

Europe's largest low cost carrier Ryanair jumped 7.9% after it raised its long-term traffic forecast. Rivals easyJet, British Airways-owner IAG and Wizz Air gained between 3.9% and 7%.

"It's been a slightly better day for markets in Europe, shrugging off a weak Asia handoff, with some decent gains for travel and leisure, which has enjoyed a respite after Ryanair's announcement," said Michael Hewson, chief market analyst at CMC Markets UK.

While Asian stocks came under pressure from concerns about China's economy and the fallout from debt-ridden developer China Evergrande Group's financial troubles, European stocks were on a firm footing as strong U.S. data reinforced optimism about a recovery in the world's largest economy.

Miners including Rio Tinto, Anglo American and BHP Group were among the top drags as metal prices fell after China reiterated plans to release more metals from its reserves.

German automotive supplier Continental AG fell 6.2% to the bottom of STOXX 600 after the spin-off of its unit Vitesco.

The utilities index was flat after a near 3% fall on Wednesday September 15. Spain passed emergency measures earlier this week to reduce energy bills, raising concerns over the hit to utilities' profits.

Spain's Endesa and Iberdrola extended losses for a third day to fall to their lowest since 2020.

Italy is also looking to introduce short-term measures to offset the expected rise in retail power prices, a minister said in a radio interview.

"Stocks in the sector are suffering from the risks of regulatory intervention, as in Spain, and it will be necessary to see how other governments in Europe will intervene," Equita analysts said.

"Current prices do not reflect high energy and gas prices."

Paris Match magazine owner Lagardere surged 19.5% after media group Vivendi said it would buy another stake in the company, paving the way for a full takeover.

British fashion brand Superdry jumped 14.9% after it forecast a recovery in full-year 2022 revenue.

Ryanair Eyes Aggressive Expansion In Ukraine

Ryanair is planning aggressive expansion in Ukraine if the country joins the European Union's Open Skies deregulated aviation market in the coming months, Group Chief Executive Michael O'Leary said on Thursday September 16.

O'Leary, whose airline is the largest low-cost carrier in Europe and a major investor in neighbouring Poland, said he expected the Ukrainian government to sign up to Open Skies before the end of the year.

"The one market I would point to is Ukraine...I would think we will be a major investor in Ukraine when they join up to European Open Skies," O'Leary told an investor call following the company's annual general meeting.

Ryanair launched its first routes in Ukraine in 2018 after the government fought off vested interests who tried to prevent its entry.

O'Leary said Ryanair currently operates from five Ukrainian airports on a bilateral basis but that there were as many as 12 suitable airports in the country.

Migrant workers would provide a major market for Ryanair's fares, which he said currently average approximately €40 per flight. The airline has in the past said it also sees potential in the country's domestic market.

"I think that will be certainly a model that we will be aggressively moving into," O'Leary said.

Low-cost carriers had a transformational impact on the economies of many central and eastern European countries in the early 2000s, opening up new migrant and tourist flows to Western Europe.

Russia and several of its former Soviet neighbours have opted for more protectionist aviation policies.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

Ryanair Calls For Recovery Plan

As reported by rte.ie, O'Leary has said that Ireland needs an aviation recovery plan if it is to capture its fair share of the rebound in the sector.

O'Leary reportedly said while speaking to RTÉ News before the airline's AGM in Dublin on Thursday September 16 that while Shannon is getting back to pre-pandemic capacity and Ryanair is close to agreeing a recovery plan with Dublin and Cork, the airports need more help from the state.

O'Leary reportedly said, "We need the Government to make a decision.

"The one thing we have been critical of Eamon Ryan and transport is that there is not an aviation recovery plan yet, despite the fact that a plan has been sitting on his desk for 15 months.

"Meanwhile, Spain, Portugal, Italy are all out there with recovery plans, reducing taxes on aviation.

"We need to compete if Ireland is going to capture a fair share of this growth and Ireland can capture a fair share of this growth, because Ryanair is Irish, we are based here in Ireland and the first country we want to grow in is Ireland.

"But not if we are going to be taxed out of existence, we’ll go to other European countries instead."

O'Leary reportedly said that Ryanair is currently doing extraordinary airport discount deals and receiving growth recovery incentives all over Europe, and, "That is why again we are calling on the Irish government - we need an aviation recovery plan for this island, we are an island on the periphery of Europe and we haven’t yet set out a plan for recovery in aviation."

"And it will be important because I think next summer you will see fewer Irish people staycationing.

"There will certainly be fewer US visitors. We have got to replace those with European visitors, with British visitors, restoring those links we've had for many years."

O'Leary reportedly said that the last 18 months have been the most traumatic through which the company has ever gone, that prior to the pandemic the airline had 30 years of unbridled growth apart from around 9/11 and the Gulf War, and, "This is the first event where we were grounded effectively for 18 months.

"We had a lot of people who were on part time pay. We employ 18,000 people. Now thankfully we've held onto most of those jobs, but most of us have had to accept pay cuts, last year, this year.

"We hope to restore those pay cuts over the next two or three years, but it has been hugely traumatic. And I think that is why today is an exciting day."

Optimism

His comments came as the airline’s board approved a revised growth plan that will see it carry 225 million passengers by 2026.

O'Leary reportedly said that the company's optimism was based on its order for 210 of the more efficient new Boeing 737 Max aircraft, 12 of which have already arrived, with 65 more due over the winter.

There will also be less capacity due to other airlines going bust and strong demand as people across Europe are coming back to flying very rapidly as the pandemic weakens.

O'Leary reportedly said, "I think people are going to fly within Europe for the next 12-18 months because long haul will be less of an option.

"So there is a big shortage of capacity in Europe for the next number of years."

No Routes Into And Out Of Northern Ireland

O'Leary reportedly confirmed that Ryanair will not have any routes operating into and out Northern Ireland this winter, as short term traffic incentives for summer routes that were put in place by the airports there have expired and have not been renewed.

O'Leary reportedly said, "The same will happen here in the Republic if we don’t get competitive.

"We want to grow here. Aer Lingus are struggling for growth as well. We need recovery incentives from this government and we need action."

Aircraft

O'Leary reportedly said that Ryanair would be happy to resume talking to Boeing again about a further order of new aircraft, and, "We will be happy to talk to Boeing again, but Boeing wanted to impose a price increase on the cost of the aircraft and we said look guys, there is a COVID crisis, you are not selling planes, lower prices and we will order more aircraft, raise your prices, we’ll stop ordering aircraft."

O'Leary reportedly said that he thinks that there will be opportunities to add Airbus aircraft, certainly second hand, in the next few years, and, "But I don't see a large order for Airbus emerging,", reportedly adding that the manufacturer's order book is stronger than Boeing’s and prices have been rising for a number of years.

Passenger Numbers

Ryanair reportedly flew 149 million passengers a year before the COVID-19 pandemic and reportedly expects to fly between 90 million and 100 million in its financial year to the end of March of 2022 as the industry recovers from the disruption of the last 18 months.

Ryanair had reportedly planned to reach the 200 million passenger mark by March of 2024, but reportedly said just before the pandemic struck Europe last year that delays in the delivery of the then-grounded 737 MAX jet would mean that it would take until 2025 or 2026.

Shares In Dublin

Ryanair shares reportedly ended higher in Dublin trade on Thursday September 16, up 7.92% to €16.62.

Hoping To Base 1,000 New Jobs In Ireland And Additional O'Leary Statements

As reported by The Irish Times, O'Leary hopes that up to 1,000 of the recently announced 5,000 jobs planned by the airline over the next five years could be based in the Republic of Ireland, but warned that this would only be likely if the state takes immediate action to introduce an aviation recovery plan.

O'Leary reportedly indicated while speaking to The Irish Times after Ryanair’s AGM in Dublin on Thursday September that 40 of the airline's new 737 Max aircraft may also end up being located in Ireland if sufficient steps are taken to boost the sector.

O'Leary reportedly said a recovery plan is needed, not just for airlines but also for the tourism sector as a whole, and that with long-haul travel expected to make a slow recovery, the state is heavily reliant on drawing in visitors from Britain and mainland Europe.

O'Leary reportedly said that Minister for Transport Eamon Ryan "has done nothing to get aviation moving again over the past 18 months", and, "Eamon Ryan needs to come out with an aviation policy that keeps low-cost air access to and from Ireland at the centre of things because tourism is our largest industry, and erecting windmills and building more bus lanes isn't."

O'Leary reportedly claimed that the Department of Finance is broadly supportive of the introduction of an aviation recovery plan but that Ryan's department continues to drag its heels on the issue, and, "I would be reasonably hopeful that there will be some progress on a recovery plan but it will probably be delivered by the Department of Finance, rather than Transport.

"The Department [of Transport] seems to be incapable of making a decision."

O'Leary reportedly warned that a failure to implement a recovery plan and to aid Dublin and Cork airports in reducing charges to lure airlines back will lead to aircraft being relocated away from the state to other jurisdictions where demand is high.

Ryanair reportedly intends to open 10 new bases across Europe and take up slot opportunities vacated by competitor airlines, and reportedly has a deal with Shannon Airport on incentives, but similar arrangements with Cork and Dublin airports reportedly last only until June of 2022, and O'Leary reportedly said that this needs to be extended until October to coincide with the end of the aviation sector’s summer season.

O'Leary warned that this is critical as fewer Irish-based people will want to holiday at home and there will still be low levels of visitors from North America, and, "If it gets extended there will be a strong recovery with a return of European inbound traffic into Ireland."

O'Leary reportedly said that Dublin is "the big hole in Irish tourism", with staycationers preferring the west and little in the way of international travel to the capital, and, "Dublin has been empty all summer long, and we're not going to get the long-haul traffic back quickly so we need to be doing all we can to get British and European visitors here."

Ryanair announced a €50 million investment in a new training centre in Dublin earlier this week with plans to train 5,000 new pilots, cabin crew, engineers and ground operations staff, and O'Leary reportedly said that even though the Republic of Ireland generates less than 8% of the Ryanair's revenues, it is still an important market to the company with the location of the new centre.

Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.

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