European low-cost carrier, Ryanair has said that it will use the COVID-19 crisis as a vehicle to reduce its cost base in a bid to emerge from the pandemic stronger. Michael O’Leary, the airline’s CEO told an investor conference call, attended by Airliner World, that it now had to compete with “state-aided junkies” such as Alitalia and Lufthansa which he said will be engaged in below cost selling once flying resumes.
The airline’s boss hit out at governments across Europe for providing what he called “unlawful state aid” and urged them to offer support in a “transparent and non-discriminatory [way]” applying the schemes fairly to all airlines.
O’Leary told investors that there were “enormous cost opportunities” to be had in the medium term and that it was in active negotiation with “airports on stimulus measures” to improve its cost base.
“We will have lower cost fuel, lower cost labour and lower cost aircraft, we are renegotiating aircraft leases for Lauda and are discussing with Boeing to push back deliveries on the MAX aircraft, we will probably extend some of our 737NG leases as well,” he said.
Ryanair expects to see these cost opportunities continue over the next four to five years and it says it is “well placed to take advantage of them”.
Meanwhile, the Irish company revealed that its first quarter loss is expected to be north of €200m (£178m) and it hopes to be able to break even in the second quarter - with an expected load factor of 50% - as long as it can resume flying in July as planned.
O’Leary said the carriers that have “run around hoovering up state aid” would “massively distort the market across Europe”.
Speaking about the return to service for the Boeing 737 MAX, he said there was a “higher degree of confidence” about a return in August or September this year.
The low-cost carrier expects its 2020 full year passenger figures to fall by around 50% to less than 80 million.