By Alistair Smout and Muvija M
LONDON -Russia’s invasion of Ukraine will not have a dramatic impact on bookings in eastern Europe so long as the war doesn’t escalate, Ryanair boss Michael O’Leary said on Wednesday, adding the airline was well-placed to deal with surging oil prices.
Ryanair, like others, suspended all of its flights to and from Ukraine last week as Moscow launched a full-scale invasion of its neighbour.
O’Leary said bookings were down 20% last Thursday and Friday compared to the previous week and around 10% over the weekend, but believed the short-term hit to demand would recover.
“I think you will not have a dramatic impact on bookings as long as the period of war doesn’t escalate and spread elsewhere,” O’Leary told reporters.
“If nothing untoward happens, I expect (bookings) would be back to normal by next week.”
Airlines, trying to recover from two years of the coronavirus pandemic, also face a potential hit to their earnings from surging oil prices that have risen to over $100 a barrel since the invasion.
O’Leary predicted bigger problems for his rivals, saying that Ryanair’s strong recovery from two COVID-hit summers would be driven by our “somewhat fortuitous fuel-hedging strategy, which means we can pass on the benefit of oil at $65 a barrel for almost all of the next 12 months”.
Ryanair is 80% hedged on fuel out to 2023, but rising prices will still cost the airline group around 50 million euros ($55.5 million) over the next 12 months, O’Leary said, adding Ryanair would not introduce fuel charges for the summer.
O’Leary vowed Ryanair would be the first airline back into Ukraine when it reopened, which could be this year, depending on the extent of damage to its airport infrastructure.
He also pointed to a huge increase in demand for flights to and from Polish cities as many Ukrainians attempt to reunite with their families, and predicted people in Britain and Ireland who had chosen domestic holidays over the last two years would be desperate to go abroad.
“I think you’re going to see families returning to the beaches of Europe this year,” he said. “They went to the beaches of the west of Ireland and Cornwall last year, and I think they never want to go back there again.”
($1 = 0.9016 euros)
(Reporting by Alistair Smout and Muvija M; Editing by William James and Jan Harvey)
