Ryanair boss O’Leary warns of ‘very difficult’ period for airlines

Ryanair boss Michael O’Leary has warned that the travel industry faces a “very difficult” period but has insisted the long-term recovery of his airline remained on course despite Russia’s invasion of Ukraine. The Irish carrier and its rivals have been forced to cancel and divert some flights because of airspace closures, while also facing surging fuel costs after the price of oil rose above $100 a barrel. “I think it’s going to be very difficult for most airlines for the next 12 months,” O’Leary said on Wednesday. Aviation consultancy IBA has forecast that the industry’s recovery from the pandemic will be delayed by at least two months after shares took a tumble. The MSCI index of European airline shares has lost nearly a fifth of its value over the past two weeks. But O’Leary expects Ryanair to ride out the disruption. Bookings fell 20% week on week on Thursday and Friday following the start of military action in Ukraine, but have since recovered and were down about 9% by the start of this week, O’Leary said. “I think it will not have a dramatic impact on bookings, clearly if the war doesn’t escalate and spread elsewhere,” he added. Ryanair has hedged 80% of its expected fuel needs at $65 per barrel until March 2023, leaving it well protected from the sudden spike in prices and able to outcompete its rivals on ticket prices, O’Leary said.  But the airline still expects to take a $50m hit on fuel over the next 12 months. “It is not a huge amount of money, but it certainly makes post-Covid recovery much more difficult,” he added. Ryanair will fly its biggest ever schedule from the UK this summer and O’Leary said he expected ticket prices during peak periods to rise because of higher fuel charges and greater demand for travel.<br/>