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Tue, Feb 05, 2008

Ryanair Chief Applauds Looming Recession

Says People Will Still Fly, For Less

The following news item -- that the CEO of one of the world's best known (some would say infamous) airlines looks forward to a looming global recession -- may strike you a bit odd. Until, that is, you learn the exec in question is Michael O'Leary, CEO of Irish ultra-low-cost carrier Ryanair.

Well, come to think of it, it still seems a bit unusual... even from the guy who once threatened to walk naked through the streets of Warsaw. But O'Leary maintains a recession would be "great" for the European airline industry as a whole.

"I don't know why we are trying to avert a recession. We need a recession," O'Leary said recently, reports Channel 4. "A recession will get rid of environmental taxes and a lot of the environmental nonsense that's talked about regarding aviation."

A recession would also "end the regulatory incompetence" O'Leary believes targets his airline at airports such as Stansted and Dublin. "A recession is now likely, I don't think it can be averted by reducing interest rates," he said. "We would welcome a good, deep recession for 12-18 months."

O'Leary admits his airline's profits could drop as much as 50 percent in 2008, due to the downturn. He still applauds a likely decrease in fares, however, as airlines compete to draw in as much business as possible in the wake of a "perfect storm" of higher fuel prices, lower demand, and higher landing fees.

"During recessions travel does not get cut back but people look for cheaper alternatives," he continued. "If we get a recession I don't see people cutting back on the amount of flying they do."

Meanwhile, Ryanair is taking of its own steps to combat rising costs -- in particular, by charging high prices to passengers for checked baggage. O'Leary said Ryanair would continue to raise fees for checked bags, until customers chose to fly with carry-on luggage only.

Hmmm... how many people WILL fit in the baggage wells of a 737? From the sound of it, Ryanair customers may soon find out...

FMI: www.ryanair.com


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