Air Freight News

Ryanair expects rush of customers after rivals limit capacity

Ryanair Holdings Plc expects to benefit from even higher customer numbers as its rivals limit their capacity, boosting the budget carrier after it revealed a surge in passengers in July.

The airline still has scope to sell tickets for August and predicts it will cash in on last minute bookings after carriers such as British Airways halted ticket sales from its Heathrow hub, according to Eddie Wilson, the chief executive officer of Ryanair’s main unit. 

Ryanair ferried 16.8 million passengers in July, up from 15.9 million in June, with load factors on its planes rising to 96%.

Ryanair has been less severely affected by the travel chaos plaguing the aviation industry as airports and airlines struggle to find staff, partly because it kept more people employed through the pandemic on lower wages even as its rivals shed numbers. It has also benefited from having its own baggage handling and ground services at its busiest airports, Wilson said.

“Our view was, which was borne out, that when demand came back, it was going to come back in one go and not come back on the drip,” said Wilson in an interview Wednesday. “So I think we were just better prepared and we were optimistic. But, I temper that with, it has been difficult even as we come back because we’ve got to go into airports that aren’t resourced.”

On Tuesday, BA extended a halt on ticket sales for some short-haul flights out of London Heathrow airport by another week to Aug. 15 and indicated that further suspensions are likely until the end of the summer travel season. Heathrow has limited daily departures to 100,000 passengers. Deutsche Lufthansa AG and Ryanair’s low-cost rivals such as EasyJet Plc and Wizz Air Holdings Plc have all previously announced capacity reductions this summer as a result of staffing shortages.

“The time to hire for this summer was last October,” said Wilson. “This isn’t like running a warehouse where you can just get people -- they’ve got to be part of a training process -- and if you stop that machine, it’s really hard to start it over again. And I think the other airlines took it for granted.”

Wilson said that air traffic control problems have been a major constraint for the carrier this summer. He blamed flight delays on inadequate staffing of ATC facilities in Germany as well as France upgrading its systems in the middle of summer, adding that these issues have caused a knock-on impact on its schedules. For carriers that aren’t fully staffed, it causes cancellations as crew maximum hours are reached, Wilson said. 

While Ryanair said that the outlook for demand over the usually slower winter season was still not clear, surging airfares in July and August might push people to book holidays past the traditional school holiday months in September and October. 

“I think you’re going to see people still going on holidays in September and October, when traditionally they may not have gone and where prices will be a bit keener than they are now.”

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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