O'Leary says ‘dramatic’ fare hikes due to passenger cap

The sheer scale of the operation under the control of Westmeath’s Michael O’Leary, chief executive officer of Ryanair, was spelt out in detail as he addressed the Oireachtas Joint Committee on Transport Communications last week on the impact of the passenger cap at Dublin Airport.

Warning that passengers could face fares as high as €500 or €1,000 to fly to and from Ireland next Christmas unless the there is action taken over the passenger cap, Mr O’Leary said that the limit is “heavily constraining” Ryanair’s traffic growth in Dublin as well as at Cork and Shannon and in the rest of the country.

“We are Europe’s largest and fastest – growing airline,” he said, stating that this year, Ryanair will grow by about 16 million passengers, from 184 million in 2023, to 200 million in 2024.

“The tragedy as regards Ireland is that none of that 16 million passenger growth is coming here,” he said.

“The cap at Dublin Airport is forcing us to send aircraft, jobs, routes and traffic overseas.”

Mr O’Leary said that this summer, Ryanair will operate from 95 bases and serve 40 countries. It plans to take delivery of about 300 new aircraft and intends over the next eight years to grow to 300 million passengers.

He said it had always been Ryanair’s policy to deliver growth in routes, traffic and jobs in Ireland but at the moment it was being impeded from doing so.

“Post Covid, we are the only airline in Europe that has recovered and grown significantly,” he said. “Our traffic is up 35%.

“In pre – Covid times, we were carrying 150 million passengers and, as I said, this year, that has increased to 200 million despite the challenges of Boeing delivery delays, higher – priced fuel and wars in Ukraine and the Middle East.

“We are making strong market – share gains across the EU, except in Ireland. In Portugal, Italy, Spain, Poland, etc, Ryanair is now the number one airline in all of those major markets. The aircraft that were lost to Dublin this year have gone to Copenhagen, Morocco, Jordan and Albania as we expand into new countries and new markets that we did not serve before.”

Mr O’Leary said the thing is that from an environmental point of view, all the growth is taking place on new aircraft that carry 20% more passengers, burn 20% less fuel and are 50% quieter than the existing fleet of aircraft.

He said he failed to understand why Dublin was capped at 32 million passengers a year, despite having just opened the second runway at a cost of €300 million, which gives the capacity to handle 60 million passengers a year.

Mr O’Leary went on to warn that because Dublin Airport is at the traffic cap, the fares to and from Dublin this Christmas will probably be approximately €500 one way; about €1,000 return.

He said airlines do not raise fares at Christmas because they are busy at that time of year. What they do is add extra seats – 270,000 in Ryanair’s case – but it does not have approval for those extra seats this year.

The airline has approval for its normal winter schedule of 6.4 million seats.

He said that because of the cap, the airline had less success when it applied – as it does every winter – for 90,000 extra seats for the October school midterm, the 270,000 extra seats for the Christmas uplift, 7,000 extra seats for the Six Nations, 130,000 extra seats for St Patrick’s Day next, 10,000 extra seats for Cheltenham and 7,000 extra seats for Premier League.

“The cap is also limiting Ireland Inc’s growth,” he continued. “I met the transport minister in our offices on 7 March and we put in front of him the most ambitious traffic and tourism growth initiative that this country has ever seen. We gave him a plan where over the next six years, from 2024 to 2030, Ryanair will grow Dublin from 15 million to 20 million passengers, a growth of about 33%. In Cork, we would increase the number of base aircraft from three to seven and grow from 2 to 4.5 million passengers. At Shannon, we would grow from three to six based aircraft and take Shannon from 1.3 to 3 million passengers. At Knock, where we think there is a potential in the next year or two to open a base, we would add two aircraft, doubling Knock’s traffic from 700,000 to 1.5 million. In total, if the cap is lifted from Dublin Airport, Ryanair is willing to invest and grow passenger traffic in Ireland from 20 to 30 million passengers over the next six years.

“Sadly, we have not yet received a reply from the transport minister to the submission made on 7 March. We have had no reply, no action and no movement on the cap. I am somewhat using the good offices of this committee to raise this issue and call for urgent action. We need a fix to this cap. It will get lifted, but the problem is the planning process is going to take three or four years to fix.”

Christmas

“If we are not able to add 270,000 additional seats to and from Dublin this year, the flights coming home at Christmas are going to cost dramatically more. We will hear that airlines are profiteering and putting up fares at Christmas, but I want it to be known that we are not putting up the fares because it is Christmas. We are putting them up because we have an arcane and idiotic traffic cap at Dublin Airport that is preventing us from adding 270,000 extra seats.”

Mr O’Leary told the committee that there are about 750 direct jobs for every 1 million passengers. He said the Irish market represents about 8 per cent of Ryanair’s business.

“It is one of our most successful exports. It used to be Guinness and now it is Ryanair,” he said.