Ryanair sees passenger growth slowing in 2013
Low-cost airline eyes expansion in North Africa despite political instability in the region
Ryanair, Europe’s biggest low-cost airline, expects passenger growth to slow in 2013 as it cuts back on short-distance flights in some markets due to higher airport fees, its chief executive told Reuters last Tuesday.
“I think the growth will be slower this year,” Michael O’Leary said, predicting passenger numbers would increase three- to four per cent to up to 82.5 million in the year to March 2014.
That compares with expected growth of 4.2 per cent in the Irish airline’s financial year ending March 2013.
“The summer this year will be mostly flat, most of the growth will happen in the winter of 2013-2014,” O’Leary said.
O’Leary said the company, which is expanding longer-distance flights, was aiming to order aircraft from aerospace company Boeing (BA.N) in late 2013 or early 2014.
He described as “overstated” Boeing’s difficulties with the new Dreamliner 787 model, grounded by authorities around the world last week after a series of technical problems. Ryanair is still in talks with the European Commission about a bid to take over Irish rival Aer Lingus (AERL.I), but O’Leary said he expects the Commission to give a green light.
“We don’t expect it to go to an appeal process because it will be very difficult for the commission to reject this package of remedies because they are so trans-formational and revolutionary,” O’Leary said, referring to concessions that Ryanair has proposed in a bid to address competition concerns.
The €694-million takeover bid is being examined on competition grounds. The European Commission blocked a previous bid in 2007, saying it would create a monopoly on Irish flights.
The takeover is also opposed by the Irish government, which owns 25 per cent of Aer Lingus. Ryanair, which owns 30 per cent of Aer Lingus, dropped a second offer in 2009.
Speaking in Rome after the announcement of new routes from Italy to Morocco, O’Leary said he was not worried by political instability in the region.
“The new regimes will be seen to be delivering some growth and some economic activity and I think deregulation and open skies is one of the first things those regimes are looking at, so we’re talking to the Tunisians, the Libyans, the Egyptians,” O’Leary said.