- Title: Package holiday market "is screwed" - Ryanair's O'Leary
- Date: 1st October 2019
- Summary: LONDON, ENGLAND, UK (OCTOBER 1, 2019) (REUTERS) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY AND REUTERS' GLOBAL AEROSPACE INDUSTRY EDITOR, TIM HEPHER SITTING DOWN (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "I think it is inevitable that in the next five or six years Europe consolidates around four large carriers, each with around twenty percent market share - IHE, Lufthansa, Air France, KLM and Ryanair. Everybody else either disappears, merges, gets taken over or partners with one of those big four." (SOUNDBITE) (English) REUTERS' GLOBAL AEROSPACE INDUSTRY EDITOR, TIM HEPHER, SAYING: "When first started it was said that Air Lingus tried to crush you and they didn't succeed. Are you crushing these competitors that are going out of business? Did you push Thomas Cook out of business?" (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "No, but I think it's inevitable. Firstly the tour operator model is dead, in much the same way the travel agency model is dead. Nobody under the age forty buys a tour package, nobody under the age of forty goes to a travel agency anymore, they do it themselves. So I think it's inevitable that Thomas Cook's model two years ago, I think the disappointing thing about those failures is that the CAA which licences these airlines as financially fit to fly - their licensing regime is clearly deficient." (SOUNDBITE) (English) JOURNALIST ASKING (SOUNDBITE BEGINS ON WIDE OF EVENT): "Do you think the failure of Thomas Cook was down to management incompetence? Or was it factors beyond their control? I wasn't clear on your answer earlier but would you be interested in slots that would now be available as a result?" (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "The failure of most companies is due to management failures. Ultimately there's good management and there's bad management. I think it's just the model, the whole tour operator model is finished. Does that mean all the tour operators are going to go bust tomorrow - no. Increasingly as you have the travelling public, people under forty don't buy packages they don't go to travel agents they don't do tour operators. As they get older, I think the tour operator model will continue to come under pressure. As we expand - Ryanair is now the largest airline in Spain, in Portugal, in Italy, as we continue to expand those markets... the tour operator model only ever worked in a market where you had monopoly legacy carriers charging outrageous scheduled airfares." WHITE FLASH (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "So the package market I think is screwed, it's over." WHITE FLASH (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "But ultimately, there are bigger issues at stake here. You have issues of European integration. Ryanair has done more for European integration I think than any other company in the history of the European Union. We have brought people together, we have made it possible for young people and old people to travel all over Europe, all year round at fares that nobody thought were imaginable." WHITE FLASH (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "There is no doubt that we do have cities in Europe that struggle under the weight of tourism. The obvious one is Venice. Tourism in Venice comes on big cruise ships where they dump huge volumes of passengers in a very short period of time. Air travel tends to be more disparate, the market works itself out in terms of air travel." WHITE FLASH (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "If you ask those cities, with the possible notable exception of maybe Barcelona and maybe Venice, they want more tourism, they want more visitors, you have hoteliers investing in products, you have new tourism attractions coming. It is the life-blood of those cities and most regions that they want to attract in more... I think the bigger challenge in Europe in the next five, ten years is what do we do about youth unemployment? You have the new commission now - what do you do about the environment? What do you do about youth unemployment particularly in the Mediterranean countries?" (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING (SOUNDBITE BEGINS ON WIDE OF EVENT IN PROGRESS): "I think if the aircraft (737 MAX) returns to service in North America pre-Christmas, we're fine. If it returns to service up until the end of January then we won't have to alter our summer 2020 plans. If it runs much later than January, and probably the end of February as the end, if it's not back to service by the end of February then I think we'd have to look again at our summer 2020 capacity. That might involve more cuts and some more job losses, but at this stage I think that - I'd be reasonably optimistic that the MAX would be back flying for the summer of next year, both in North America and in Europe." WHITE FLASH (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE MICHAEL O'LEARY, SAYING: "We have no plans to do any more acquisitions, not in the M&A space because generally anything you can buy in Europe has a higher cost-base than my cost base and has a lower margin than my margin, so we have 200 aircraft on order that's sufficient capacity for us to grow from 150 million passengers this year to 200 million passengers plus by 2024. I think we will participate is there is further M&A in competition investment I see some opportunities coming up out of that, but that's about it." O'LEARY AND HEPHER SHAKING HANDS, AUDIENCE APPLAUDING
- Embargoed: 15th October 2019 11:08
- Keywords: Brexit Thomas Cook airline Package holidays Future of travel Ryanair Ryanair Group CEO Michaek O'Leary Irish regional airline
- Location: LONDON, ENGLAND, UK
- City: LONDON, ENGLAND, UK
- Country: United Kingdom
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA001AZ9NEX3
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: EDIT CONTAINS WHITE FLASHES TO SEPARATE SOUNDBITES
Ryanair boss Michael O'Leary said on Tuesday (October 1) that the package holiday market "is screwed" and that "nobody under the age forty buys a tour package, nobody under the age of forty goes to a travel agency anymore".
The world's oldest travel firm Thomas Cook collapsed last week, stranding more than half a million holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.
At a Reuters Newsmaker event, the Ryanair group CEO added that Britain's Civil Aviation Authority was partly to blame for the chaos surrounding Thomas Cook's bankruptcy and should make tougher licensing demands to prevent airline collapses stranding passengers.
While the CAA had done well to repatriate hundreds of thousands of stranded passengers, the Ryanair group CEO said, it should do more to prevent airline failures in the first place.
Ryanair will wait until the next turn of the cycle before it can place an order for more Boeing or Airbus jets at cheaper prices, O'Leary said.
Ryanair is one of the biggest customers of Boeing's grounded 737 MAX aircraft, with 135 firm aircraft orders and 75 options, and O'Leary said the company's shift to a group structure could see the company take on Airbus jets into its fleet in the medium term.
(Production: Polly Rider)
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