Chinese Planes Good for Industry: Ryanair CEO
The CEO of Irish low cost carrier Ryanair believes the emergence of new aircraft manufacturers is good news for the airline industry and passengers.
“The Boeing and Airbus duopoly is ending,” said Michael O’Leary in a CNBC interview following the release of second quarter earnings.
O’Leary believes Comac, a Chinese manufacturer, will emerge as a major rival to the traditional players from Europe and the US over the next five years, in large part because of problems at Airbus and Boeing.
Citing major delays and uncertainty surrounding the delivery of Boeing planes as a key reason for Ryanair looking further afield for its new planes O’Leary indicated the US manufacturer could not rely on his business for ever.
“The major problem is delivery delays from Boeing and Airbus due to the delays they are experiencing with new, bigger planes” said O’Leary.
The comments came as Ryanair posted forecast-beating profits for the group's second quarter despite high oil prices and shares in the airline opened higher by 5 percent on Monday.
Second quarter profits before tax came in at 404 million euros versus a Reuters expectation of 393 million euros, leading O’Leary to raise profit guidance for the full year by 10 percent.
O’Leary said he is grounding 80 planes over the winter to protect yields and expects to benefit as more and more passengers fly low cost at the expense of the major flag carriers.
Ryanair traffic in November fell by 15 percent.
He also expects to pick up business from the takeover of BMI by the owner of British Airways IAG.
Virgin Airlines are attempting to scupper that deal with a rival bid but O’Leary expects BMI’s low costs routes to be taken out of the market allowing Ryanair to “mop up” that traffic.