February 26th 2024.
According to Ryanair Group CEO Michael O'Leary, there is a possibility that ticket prices for their airline could increase by as much as 10% in the near future. This news may come as a disappointment for those who were planning to go on a holiday this summer, as air fares are expected to rise across Europe. O'Leary explains that the main reason for this increase is due to a shortage of planes in the market.
As the chief executive of a budget airline, O'Leary understands the impact this could have on travelers' wallets. He reveals that Ryanair's ticket prices could be up to 10% higher compared to last year's rates. However, this issue is not exclusive to Ryanair, as all airlines in Europe are facing challenges in meeting the high demand during the peak summer season. The shortage of planes can be attributed to Boeing's delay in delivering their new aircrafts, after an emergency door fell off one of their 737 Max planes at 16,000 feet.
The 737 Max planes have been at the center of controversy, and O'Leary shares that Ryanair will only receive up to 45 of the 57 planes they had ordered from Boeing by the end of March. This news has caused concern for the airline, as they had originally planned to carry 205 million passengers by the end of March 2025. This number was an increase from the 183.5 million passengers they carried in the previous year.
Due to the shortage of planes, O'Leary speculates that they may have to lower their passenger forecast, possibly below 200 million. He explains that this could also affect their growth this year, and lead to a higher fare environment in Europe for summer 2024. O'Leary predicts that air fares for this period could be higher than summer 2023, where they saw a 17% increase in average fares. However, he assures that they are budgeting for a fare increase of 5-10%, which he believes is a reasonable estimate.
He adds that if there was more capacity in the market, fares would most likely decrease. Unfortunately, with the ongoing Boeing controversy and the recall of over 1,000 Pratt & Whitney-built engines from Airbus aircraft last July, O'Leary predicts that airlines such as Wizz Air, Lufthansa, and Air France may have to ground up to 20% of their A320 fleets. In light of this, O'Leary mentions that if they were able to receive all 57 aircrafts from Boeing before the end of June, they would have an advantage during the busy summer season, as many airports are eager to work with them.
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