As The Irish Times reported last week, there are good reasons for weather-weary Irish holidaymakers to be concerned that the era of cheap air fares is coming to an end. “The reason is simple: too many people, too few aircraft,” wrote Barry O’Halloran after aviation specialist Cirium estimated that fares are about a third more expensive since 2019. Many factors drive this imbalance, particularly the impact of Covid-19 on aircraft manufacturers followed by the war in Ukraine.
Ryanair chief financial officer Neil Sorahan agrees the change is “structural” and a recalibration certainly does not seem to be forthcoming.
“We’re still only operating – on a pan-European basis across all airlines – at 93 per cent pre-Covid capacity,” he told The Irish Times on Monday following his firm’s first quarter earnings. Although Ryanair is operating “at 125 per cent” of its pre-pandemic capacity, due to the expansion of its fleet, he said: “I don’t think [the European airline industry is] going to close that gap any time soon.”
Even Ryanair has faced its own, well-publicised obstacles to adding capacity. Boeing was one of the more high-profile victims of the Covid-induced supply chain crunch and lingering issues have bedevilled deliveries of new planes. Ryanair had expected 51 aircraft deliveries on or before April 30th, but the last of these deliveries was delayed into July due to supply chain issues. For this reason, Ryanair has reduced its full-year passenger forecast from an initial projection of 185 million for its current financial year to 183.5 million.
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That said, Sorahan said the company is in “a strong position” with a solid pipeline of deliveries in view. But speaking more generally, he warned it will be hard to fix the capacity crunch for the wider industry. “Manufacturers of aircraft are going to take probably four or five years to catch up on where they would have been,” he said. “There were 500 aircraft trapped in Russia ... They’re not going to come back into the market and then at the same time, all the big orders have been placed by [carriers] in places like India. So a lot of the aircrafts that are going to be manufactured this side of 2030 won’t come into Europe.”
It all sounds a bit ominous for deal-starved Irish consumers.
