Michael O’Leary, Ryanair’s colourful Chief Executive Officer, is notoriously contrarian, recalcitrant and bullish about the future of aviation and tourism. So there should be little surprise that he declared “now is the time to go back flying” on Tuesday, March 12, on the same day Matt Hancock, the Health Secretary, stated that foreign holidays would be “unlikely” for British people this year – not least because the government has imposed a 14-day quarantine on any travellers returning to the United Kingdom on international flights.
Speaking at a session at The Global Boardroom – a virtual event organised by The Financial Times – he underlined Ryanair’s plans to “restore about 40 per cent of the normal flight programme from July 1” and took aim at the British government and other authorities. He also revealed the issues with processing refunds for Europe’s biggest low-cost carrier.
While his fighting talk is typical, his words had others in the aviation industry, grounded by the coronavirus pandemic, nodding their heads in approval. Here follows the best bits from his session at The Global Boardroom.
Ryanair’s plan to take to the skies again
“We announced this morning that we think it’s now time to go back flying. We’re going to restore about 40 per cent of the normal flight programme from July 1. We’ve seen a surge of bookings this morning, I think there’s a real pent up demand from families in particular who would like to go to their typical two-week sun holiday in Portugal, Spain, France, Italy, Greece in July and August. I think that would be the starting point for a return to service. I think 80 per cent return by September is probably ambitious … but it would be entirely driven by passenger demand.”
Government’s “non-scientific nonsense of 14-day isolation”
“The thing that is worrying about the non-scientific nonsense of a 14-day isolation to the UK is how do you allow people who need to fly to work go back to work? Take the European Union headquarters in Brussels, for example. How do you align all those EU employees who at the start of the lockdown went home to all of their various states? We cannot be imposing these entirely arbitrary and non-scientific 14-day isolations – which are entirely unenforceable and unpoliceable anyway. [And] this in a country that can’t even do testing and tracing, nevermind following up on people where they’re spending 14 days in isolation. Police following you around for 14 days after you’ve arrived home in the UK and checking that you stayed at home and hasn’t ventured out to the pub or the supermarket is nonsense.”
The new normal for travelling: face masks and temperature checks
“By the time we get to July 1 we think masks and temperature checks will have become the norm in train stations, onboard trains and undergrounds, on buses and public transport across Europe. And it will be a reasonably modest extension to add those to airport terminals and onboard aircraft.
“Masks are readily available, we think the airports will work with us on temperature checks, people entering the terminal, because – let’s face it – they’re nothing more than shopping malls. Most shopping malls will be having temperature checks and face masks anyway to allow retail to return.”
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Governments not providing state aid to the aviation industry
“The French, the Germans and the Italians have provided the crack cocaine of state aid. The usual addicts – I meant the Spanish, the Irish, most of central-eastern European countries – are not providing this kind of illegal state aid that restores competition. But when the French state starts giving back airport taxes but only to French airlines when they expect Ryanair and easyJet and British Airport to keep paying airport taxes … We launched the first challenge against the Swedish government loans to Swedish registered airlines only two weeks ago, we submitted the first complaint against the French, the refund of the airport taxes but only to French airlines last Friday, and we have about another six or seven state aid actions in the works, against these airlines, who are manifestly in receipt of what is illegal state aid, and that is also in breach of competition rules across Europe.”
More aviation opportunities – less competition
“[After] this COVID-19 crisis there’ll be fewer competitors. We’ve already seen Thomas Cook, Flybe and others have gone bust. Norwegian Airlines has effectively gone bust but will re-emerge much smaller.
“Secondly, there’s going to be much more interesting airport growth incentives, as airports have seen their traffic chopped for the next two or three years. And thirdly, I think there’s a real opportunity here to lower our fleet costs.
“I think the other big opportunity is oil prices are going to remain low for the next three or four years, so I see nothing but opportunity coming out of this. But I don’t underestimate the challenges facing Ryanair and our people as we try to compete in what is going to be a very difficult marketplace.”
Why refunding customers is not straightforward
“The problem with regulators like the Civil Aviation Authority (CAA), who are completely out of touch with reality, is they have no sense of the scale of the problems the airlines are facing with refunds. In a normal month we process 10,000 refunds for cancellation, weather, air traffic control strikes, et cetera.
“Our refund team has been reduced by 75 per cent to comply with social distancing office measures here in Ireland, but we’re facing 50 million refund [requests], because all of our flights have been grounded by EU governments for the months of March, April and May. We have a processing capacity of 10,000 a month; we have a backlog of 50 million. It’s going to take us weeks and months to get rid of this backlog and there’s nothing we can do in the short term because the furloughed people are not allowed to come to work. The CAA is completely delusional if they think we or any other airline can process this unprecedented volume of refunds in a short one- or two-week window of time.”