Ryanair CEO O'Leary sees no sign of recession

Low-cost carrier Ryanair is not seeing any signs of recession, Chief Executive Officer Michael O'Leary said on Tuesday, pointing to two weeks of record bookings this January and a recovery in demand from Britain.

January blues helped drive holiday bookings, O'Leary told reporters in London, noting that his airline, Europe's largest airline by passenger numbers, took more than 2 million bookings last weekend, its most ever in a two-day period.

Referring to talk of a looming recession in Britain and a slowdown elsewhere in Europe, O'Leary said: "We see no signs of it at the moment."

The strongest market for those bookings was for flights from Britain to European destinations, such as Spain and Portugal over Easter and summer, he said, in a reversal from earlier in January when the airline flagged softer demand from the UK.

"There just seems to be very strong demand out there and people, I think, worrying that prices are going to rise in summer, which I think they will, and people getting in early and booking their Easter and summer travel," he said.

The airline is expecting a very strong summer season, betting that average European short-haul air fares will jump by a high single-digit percentage.

Appetite for holidays is resilient despite the economic slowdown from high inflation because people no longer see holidays as a luxury, said O'Leary. He said Ryanair's customers "scrimp and save" elsewhere to protect their travel plans.

Air fares will keep rising, O'Leary predicted, because capacity within the European air travel market remains constrained.

While Ryanair is flying more than it did before the pandemic, competitor airlines such as easyJet, British Airways and Lufthansa are still tracking behind where they were in 2019.

O'Leary said the shift to a higher interest rate environment gives Ryanair an advantage over competitors because it owns most of its planes. EasyJet and Wizz Air lease more of their fleets, pushing up their costs.

Looking into the future, O'Leary repeated his forecast that Europe's airline industry is set for further consolidation in the coming years.

"Alitalia's clearly going to finish up with probably Lufthansa in the next three or four months. TAP I think will finish up in BA-IAG, then I think easyJet is going to finish up being bought by either BA or Air France or both jointly and then Lufthansa will buy Wizz," he said.