Air fares will rise by as much as 30 per cent in the medium term according to Ryanair’s group chief executive Michael O’Leary with flying currently “too cheap” to make commercial sense.
He said he was to blame for the low cost of air travel across Europe and said that while he had “made a lot of money” pushing down the cost of flights over the last two decades current prices were unsustainable.
Speaking to the Financial Times, he said it was “absurd” that a flight from Dublin to Stanstead cost less than the train from the airport into central London and suggested that a combination of soaring oil prices and environmental charges would see the average Ryanair fare rising from €40 to somewhere between €50 and €60.
Making air travel cheap “has been my doing,” he said. “I made a lot of money doing it. But ultimately, I don’t believe air travel is sustainable over the medium term at an average fare of €40. It’s too cheap at that. But I think, you know, it will still be very cheap and affordable at €50 and €60.
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“It’s got too cheap for what it is. I find it absurd every time that I fly to Stansted, the train journey into central London is more expensive than the air fare,” he said.
While Ryanair had hedged the majority of its future fuel requirements for the rest of this year at $65 per barrel before Russia invaded Ukraine, Mr O’Leary said fares would rise because oil prices are likely to remain “structurally higher” for the next four or five years, “until we can wean ourselves off Russian oil and gas”.
Brexit ‘idiocy’
Ryanair has so far managed the return of air travel better than many rivals, something it has attributed to keep most of its staff on the books over the course of the pandemic while other airlines let large numbers of people go at the height of the public health crisis.
“I have a lot of sympathy and I would not be critical of competitor airlines,” Mr O’Leary said. “Covid has been unbelievably difficult to manage your way through.”
His warning over higher prices has come on the back of a significant climb in airline ticket prices in Europe and in the US this summer, a rise which industry sources have attributed to an unexpectedly strong rebound in appetite for international travel as well as staff shortages across airports and airlines.
Mr O’Leary also launched a blistering attack on the British government for Brexit which he dubbed a “disaster” and one which had made recruitment more difficult for the UK arm of Ryanair.
“This is without doubt one of the inevitable consequences of the disaster that has been Brexit,” he said. “Withdrawing from the single market, just so that they can say ‘We got Brexit done’ was the height of idiocy. But then they are idiots.”
