A Ryanair Holdings passenger aircraft taxis towards a gate at Budapest Ferenc Liszt International Airport in Budapest, Hungary. Picture: Bloomberg photo by Akos Stiller
A Ryanair Holdings passenger aircraft taxis towards a gate at Budapest Ferenc Liszt International Airport in Budapest, Hungary. Picture: Bloomberg photo by Akos Stiller

Ryanair sees travel rebound threatened by European lockdowns

By Bloomberg Time of article published Nov 24, 2021

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By Siddharth Philip

Steps aimed at containing spiralling coronavirus infection rates in Europe are putting the region's travel rebound at risk, says Ryanair Holdings chief executive Michael O'Leary.

Measures including a return to lockdown conditions in Austria meant airlines faced a "fraught" period through Christmas as they waited to see whether a resurgence in demand would be strangled off, O'Leary said on Tuesday in a webinar broadcast by Eurocontrol, criticising the curbs as illogical.

Bookings for holidays next years could also be affected, and there was a possibility that the US would review the reopening of its borders, he said in the most downbeat take on prospects from an airline chief since lockdown worries began to weigh on airline stocks on Friday.

"It's inevitable that we will undermine confidence between now and Christmas and that will disrupt Christmas and it will also unsettle people between Christmas and New Year, when they normally start booking their summer holidays," he said, adding that until last week "things were going great".

Europe has quickly become the global epicentre of the Covid-19 outbreak, prompting governments to resort to a fresh round of clampdowns.

German Chancellor Angela Merkel said on Monday that the latest surge in infections was the worst of the pandemic and called on federal states to tighten restrictions – just days after Austria announced a fourth lockdown.

The measures have triggered unrest in countries including the Netherlands, where police fired warning shots and deployed a water cannon to contain protests.

The deterioration comes with the aviation industry only just beginning to recover after the virus grounded flights for months, leading carriers to slash jobs, retire fleets and load up with debt to survive.

Subsequent travel restrictions made for a sluggish resumption of demand on international routes, with European operators enjoying only a short period of strong bookings in the second part of the summer and during October's school holidays.

O'Leary said governments were panicking and new restrictions should apply only to the unvaccinated, with the principle of free movement within the EU upheld by member states.

"I think now we're going to unsettle people, we're going to undermine confidence, despite the high levels of vaccination across Europe."

He said there was a chance that a rebound in North Atlantic travel could go backward if events in Europe prompt a "jumpy" Biden administration to reconsider a reopening of US borders that took effect on November 8. Ryanair's own business wouldn't be impacted by such a development since it operated only short-haul flights.

O'Leary's view contrasts with that of Virgin Atlantic Airways counterpart Shai Weiss, who said on Monday that he didn't expect a tightening of the US or UK borders, since the Covid flare-up in mainland Europe stemmed mainly from the slow takeup of booster shots rather than a new viral threat.

"Cases are no longer the determining factor," Weiss said. "It's really about variants of concern that are new and dominant beyond the delta variant, and we haven't see one."

He said Virgin was set for a bumper Thanksgiving and Christmas but could not predict how strong demand would be next summer, with most bookings coming no more than a few of months in advance of flying.

Ryanair earlier revealed next summer's timetable plans for the UK, its biggest market, including 24 new routes for a total of more than 500. That's up from 489 in the 2020 schedule, before the pandemic shattered operations.

O'Leary said the Dublin company aimed to restore cuts to crew pay over the next two or three years, provided passenger numbers continued to recover.

On Tuesday, Discount rival EasyJet said it would recruit 1 500 seasonal cabin crew for next summer, with 11 000 applications received.

The UK firm said it had sufficient pilots for the period but would look to take on 150 cadets early next year and begin recruitment of experienced Europe-based aviators for its Airbus SE fleet in the coming weeks.

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