O’Leary on air passenger duty and the end of checked-in bags

Ryanair chief Michael O’Leary was in London to talk to the media today, ostensibly to lay into the UK Government for its £10 air passenger duty and the associated impact on tourism – but as ever covering a range of topics. Highlights from this morning include:

 

  • On UK air passenger duty - O’Leary called APD ”tourism suicide”, hit out at the UK and Ireland for both “following the visonary policy of taxing themselves out a recession” and said Ryanair would freeze its growth in the UK as a result. He says that while Ryanair will continue to grow “all of that growth is being directed at continental Europe”, noting it would carry only 32 million passengers in the UK this year – down on 34 million the previous year. “Certainly for the rest of the year there will be no more growth in the UK,” O’Leary says, adding that if the APD was lifted tomorrow, “we would increase capacity at about six UK airport bases and open one maybe two more UK bases”;

 


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    On Stansted groundings - he says without a break in its costs at London Stansted the carrier would again ground aircraft at the London airport this winter;

 

  • On check-in bags - says the carrier now has 70% passengers traveling with check-in bags only and predicted the carrier would around next spring be ready to look at 100% carry-on bags, with passengers bringing bags to be put in the hold and collected at the gate. ”The strategy we have been on for the last 18 months is to move people away from checked in bags towards carry on bags,” he says, noting the next development could come in the spring. “We’ll still only let you on with one bag, the other two will be left on the steps and put in the hold. It will be much simpler. What it means is we will have got rid of all the expensive terminals and baggage halls, handlers and lost bags,” he says. “People will wonder why they ever had a check-in bag ever before.”; 

 

  • On fuel hedging - says the airline, already 90% hedged for the first nine months of its current financial year, has not hedged further in the fourth quarter yet as he expects the oil price to drop again in the second half. “I still think the oil price will ease between now and the end of the year. I don’t trust the green shoots of recovery”;

 

  • On the recession - does not see any imminent end to the recession. “I think there is at least a year to go. I think the US will emerge out in the first half of 2010, and European economies a year after, and the UK and Ireland some time after that,” he says;

 

  • On toilet charges/fat tax - insists the carrier continues to look at a charge for people to use the toilet onboard, but has given up on a mooted fat tax . Asked if he had more such schemes up his sleeve. “I hope so,” but adding, “it will be hard to repeat the success of our pee for a pound and fat tax, but we’ll do our level best”.  

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