MAJOR airlines could soon be forced to merge, leaving just four operating in Europe, claims Ryanair boss Michael O’Leary.
The airline’s CEO believes that Europe is entering an “inevitable” post-pandemic period of airline consolidation.
GettyRyanair CEO Michael O’Leary believes airlines could be forced to merge[/caption]
He said that will happen as carriers struggle to compete in the new travel landscape.
As part of that, airlines like easyJet and Wizz Air could be bought out by bigger carriers, as they find it difficult to become profitable.
“We are definitely, post-Covid, entering a four or five-year period of consolidation,” O’Leary told Reuters.
Many of Europe’s airlines are finding it tough to compete with budget carriers, and could have to merge with rivals, analysts have said.
German airline Lufthansa offered last month to buy a minority stake in ITA Airways, the loss-making successor of Italy’s Alitalia, saying the southern European country was a prominent market both for business travellers and tourists.
Lufthansa’s bid has ignited talk of further potential sector consolidation as the industry seeks to plot a more profitable recovery after the easing of pandemic restrictions.
The Portuguese government, which owns TAP airline, has said it is considering an outright or partial sale of the business.
Lufthansa, Air France-KLM and British Airways owner IAG are potential buyers, according to analysts.
Both the Portuguese and Italian governments should get a commitment from potential buyers that they would grow the airlines’ traffic by 50% over a five-year period, O’Leary said.
“It is inevitable that AliItalia will be bought, TAP will be bought,” O’Leary continued.
“And then I think it is likely that in the next couple of years easyJet and Wizz (Air) will also be taken out by the legacy carriers.”
O’Leary said he believed the sector in Europe would move towards having four large airlines: Lufthansa, Air France-KLM , IAG and and Ryanair.
Ryanair on Monday posted a record after-tax profit for its October-December quarter and said bookings for Easter and summer flights were “very robust”, boosted by demand from Asian travellers and a strong U.S. dollar.
O’Leary said that he is expecting the lowest fares to “sell out early” and that people should book sooner rather than later.
Earlier last month, he also warned that holidaymakers won’t find fares as low as £9.99 for the next year or two because of high oil prices.
He said: “I don’t think you’ll see £9.99 flights for a long time.”
The airline boss said: “Yes, there’s lots of cheap seats out there, but it’s not on the back of a seat sale.”
Instead of flights under a tenner, Ryanair’s spring flight prices are starting at £29.99.
Over the next three years, the average cost of a Ryanair flight will rise from €40 (£35.20) to €50 (£44.00).
These prices could even rise to €53 (£46.64) once passengers have included optional extras with their booking.
O’Leary added: “This year we’ll see high single-digit price increases for the second year in a row, which hasn’t happened in a very long time.
“That’s largely because the demise of Thomas Cook, Flybe, and IAG and Lufthansa has not put as much capacity back into the market.”
Meanwhile, Ryanair passengers have been warned about a “booking rip off” that could see them pay more.
And this mum saved money on her holiday by flying there just for one day.
PARyanair could be one of only a few airlines remaining after this year[/caption] Read More