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Thursday, Apr 15, 2021

Ryanair boss says UK government support for aviation just 'PR stunt'

Ryanair boss says UK government support for aviation just 'PR stunt'

Michael O’Leary criticises ‘bonkers’ border controls during coronavirus pandemic
Michael O’Leary has described the UK government’s support for the airline industry during the pandemic as “lamentable”, as aviation leaders called for fresh help and warned of a long recovery ahead.

The Ryanair chief executive said fares would be cut this summer to boost demand and that he hoped for up to 70% of normal passenger numbers from July. O’Leary said vaccines would enable travel, but added that regulations on border controls were “bonkers”. He described hotel quarantine as “completely unpoliceable”, saying the airline had seen no medical evidence to support it.

“[It] has been a PR stunt, shambolic and ineffective and plays no role in keeping out the Covid virus,” O’Leary told MPs on the transport select committee on Wednesday.

He said he was “not a great supporter in principle of a vaccine passport” because he feared delays in getting international agreement in time for summer, but said passengers should upload certificates saying they have had a vaccine or a PCR test in order to travel.

Meanwhile, O’Leary said the Civil Aviation Authority had started “criminal proceedings” against Ryanair for carrying Italian and German passengers to the UK with valid predeparture PCR test certificates written in their own language, rather than the required English, French or Spanish.

He said: “It’s this kind of bonkers, non-joined up regulation which is designed to make bureaucrats at the Department of Health look like they’ve done something. Whereas in reality it’s completely nonsensical.”

O’Leary said it would be churlish not to recognise the government’s support for his employees via the furlough scheme, adding that the airline could not afford to top up pilot and crew pay towards normal levels. However, he criticised the government, saying ministers had been lamentable in providing other support.

Questioned about a £600m UK loan to Ryanair, an Irish airline, O’Leary said: “We are by far and away one of the biggest investors in UK aviation, UK airports and UK jobs.” He said the money would be repaid in the next 12 months: “We’re very grateful but it is a loan, we are paying interest on it, and it will be repaid.,” he added.

O’Leary said the impact of the pandemic had been devastating for the industry, with Ryanair seeing “a swing in the order of €2bn” (£1.7bn) in profit and loss in a year, and not expecting to break even before 2022.

The best Ryanair could hope for was “60-70% of our normal traffic in the peak summer months”, he said, adding: “We will be dumping and lowering prices for the next six or 12 months to get people back flying again.”

While O’Leary reiterated calls for reform of air passenger duty, airports called for more help with business rates. Full rates relief was offered to some sectors – which some large retail firms repaid – but airports have been limited to £8m.

Karen Dee, the chief executive of the Airport Operators Association, told the committee that the rates relief would only cover losses for about 13 days for English airports, which had huge operational and security costs. “They are big costs that when you have no revenue and virtually no passengers, you simply cannot cover … that is not a sustainable position for any business,” she said.

Tim Hawkins, the chief executive of MAG, England’s biggest airport operator, said data from the Office for National Statistics showed aviation had been hardest hit of all UK industries. It would take longer to recover and yet had received little aid, he said. “The sector specific support, the business rates, only gives half our liability at Manchester and Stansted and only came in November, since when we’ve been closed. It’s very hard to reconcile with the support given to other sectors.”

He said the government’s global travel taskforce, which held a first meeting this week to prepare for possible overseas leisure trips from 17 May, was only “a plan for a plan”.

The aviation minister Robert Courts defended the taskforce, saying that while the government hoped “to achieve certainty as soon” as it could, it was not possible to tell families or individuals what they should do for summer.

“There is an element of assessing risk … people have to give themselves options and are clear about the implications of booking terms and insurance,” he said.

Meanwhile, the Welsh government announced it would pump more than £80m into struggling Cardiff airport to help it survive the pandemic.

The airport, which is owned by the government, has been one of the worst affected, with traffic down 88%. The government will give a £42.6m grant and write off a further £42.6m it is owed.

Wales’s transport and economy minister, Ken Skates, said that without help, the airport risked going bust and the state losing all its investment.

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