LONDON – Irish low-cost carrier Ryanair has threatened to pull out of the UK aviation market and move its fleet if the pounds collapse and soaring inflation and heightened interest rates begin to affect the demand for air travel.
Government Policy Madness
The new party leader for the conservative UK government Lizz Truss is under even greater pressure now after her cabinet announced a mini-budget which is causing mass international market panic and has caused the value of the pound to drop to its lowest points in nearly 70 years.
This has left many companies worried and none more so than the aviation sector, which during the COVID-19 pandemic and in this last year has been bullied by UK government policy and at points ridiculous restrictions and requirements.
Lengthy queues, missing bags and delayed flights are a common sight all around Europe it is true, however, with the cost of energy now soaring and the rise of inflation, this latest comment from Ryanairs bosses is not something to be simply ignored.
In an interview at an event in Dublin with BNN Bloomberg, Eddie Wilson, head of the carrier’s main airline unit said: “If there’s issues with demand we have that ability to grow and locate aircraft in places that have the best cost base and where demand reflects putting in that capacity,”
Ryanair has around 36 bases across Europe in which it could deploy its UK-based fleet, and with the government seeming unwilling to back down from this crazy mini-budget it is something which every day now slowly starts to become a greater reality.
Chief Executive Officer Michael O’Leary, speaking at a press conference, said Britain’s fiscal policy combined with spending commitments including energy price caps “could bankrupt the UK economy in the next two years.”
Chaos for Flybe and easyJet
The timing of the UK’s worst rates of inflation and the value of the pound dropping could not come at a worse time for carriers such as Flybe who this year has relaunched with the intention of being able to service the UK’s domestic market demand once more.
But with people now getting to the point of not being able to afford to fly, could this mean that the carrier must once again look to government funding to save them, the same government which so carelessly left it to collapse?
We should also take a look at easyJet, they are almost in the same position as Ryanair in the fact that they have the ability to relocate planes and crew across their European network, but with the backlog and issues that come with converting UK CAA to EASA licenses now has following BREXIT, become an overcomplicated and unnecessary cost for companies it seems more likely that services and jobs will just be cut as the demand begins to falter.
For quite some time now Ryanair has been warning of the changes that were coming to the European low-cost carrier market and has also been on record saying that the days of the 10 euro ticket are probably in the past, particularly with the energy crisis as previously mentioned already driving consumer costs up, an issue no 10 fold the problem mixed with these ridiculous government decisions.