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O’Leary reads crystal ball: Future misfortune for air carriers

O’Leary reads crystal ball: Future misfortune for air carriers

At the general assembly of Airlines for Europe held recently in Brussels, Ryanair’s boss, Michael O’Leary, warned: “After almost four years of growth recorded by the airlines, a reversal trend is imminent. Some European airlines are destined to fail.” Out of the box as usual, O’Leary has not denied what many think when it comes to industry consolidation.

If what he predicts is so, the first test will be Brexit. “In April 2019, we will experience a real crisis in the air sector, followed by more in the coming years,” stated O’ Leary.

However, for the time being, the concern of the CEO of Lufthansa, Air France-Klm, easyJet, and Iag, convened on the stage in Brussels, is about the coming summer. Their hope is that there will not be a repetition of last year’s increase of up to 300% of delays in some airports due to inadequate infrastructure at the borders of the European Union and to the new control procedures introduced in March 2017.

The battles of A4E

According to data from A4E (Airlines for Europe), in 2017, 25,500 flights were cancelled, a number increasing compared to 23,870 in 2016. This gives credit to common talks that the European Union is always late in perceiving the changes required to allow European carriers to fight on equal terms with their competitors from the rest of the world.

“It requires more connections, less expensive airports, and faster controls at the borders,” reiterated Lufthansa CEO, Carsten Sphor, pointing out that 2017 was an excellent year for EU carriers, with an increase in traffic estimated at +8.1%.

Another hot issue was on the costs of the airports, which doubled in less than 10 years as far as the grand hubs are concerned, while the average fares of a flight fell in the same period from 199 euros to 96 euros. Result: “We have shown that if the costs of the airports decrease, the costs of the tickets also do.”

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