The world’s surge in inflation rates will help Ryanair’s growth as people will not stop flying altogether, but will rely instead on budget airlines.
“We think recession [and] price inflation is very good for our growth,” chief executive Michael O’Leary told journalists today in Lisbon.
European countries have in fact been hit by soaring inflation rates as a result of the war in Ukraine’s impact on energy prices as well as a tight labour market.
Germany’s consumer prices reached 10.9 per cent in September – the highest in more than 25 years – while the UK saw an increase to 10.1 per cent this month.
“In a recession people become more price sensitive,” O’Leary, who is set to stay at Ryanair’s helm until 2028, added.
“They shop in Lidl and Aldi, they spend more on furniture in Ikea and when they want to fly, they fly with Ryanair.”
The low-cost carrier reported that 15.9 million passengers flew aboard its planes in September – the second-busiest month ever after August’s 16.9 million travellers.
Numbers are not expected to subside, as in early October Ryanair said it was expecting an increase in air fares “by a mid to high single digit figure for the full year” following “surprisingly strong” bookings.
The chief executive also hailed the appointment of Rishi Sunak as UK Prime Minister.
He told Reuters he was glad the Brexiteer wing of the government was out and that “adults have taken charge again.”
“They are getting rid of some of the people who were there, from Boris Johnson to Liz Truss, all the Brexiteer wing of the Tory party – they are crazy,” the chief executive commented.
O’Leary called on the newly-appointed PM to agree to a trade deal with the EU.
“Brexit is done but at least have the best free trade deal you can have,” he said. “Europe is still the UK’s largest trading partner.”
The airline stopped trading on the LSE in December last year following concerns over admission fees and post-Brexit ownership rules.
Under EU regulation, airlines need to be majority owned by countries within the bloc or with more integrated arrangements than the UK to maintain full licensing rights.