Ryanair boss Michael O’Leary says Norwegian Air is ‘next to go bust’ and claims the package holiday model is ‘screwed’ in the wake of Thomas Cook’s collapse
- Mr O’Leary claimed that budget airline Norwegian was the ‘next to go bust’
- He also said the regulator should have stepped in sooner with Thomas Cook
- He was incredulous Thomas Cook secured a licence five months before its crash
- Norwegian Air has rubbished similar claims made by Mr O’Leary in the past
Published: 19:57, 1 October 2019 | Updated: 20:35, 1 October 2019
Ryanair boss Michael O’Leary claims Norwegian Air will be ‘the next to go bust’ and says the package holiday model is ‘screwed’ after the collapse of Thomas Cook.
Mr O’Leary slammed the Civil Aviation Authority for not stepping in before the travel giant’s crisis last week, leaving 150,000 Britons stranded abroad.
The Irishman said on Tuesday that the CAA needed to address how it had deemed Thomas Cook fit to fly in April before it collapsed just five months later.
Mr O’Leary predicted other airlines would go bust, with reporter Tom Jenen tweeting from the Reuters event: ‘Michael O’Leary, CEO @Ryanair claims @Fly_Norwegian is the next airline to go bust, here @ReutersUK Newsmakers.’
Mr O’Leary made similar comments last year, alleging that Norwegian would go under in the winter because it ‘loses a heroic amount of money.’
Ryanair chief Michael O’Leary told a Reuters event in London on Tuesday: ‘The CAA should be much more aggressive in requiring the shareholders of those companies to put much more cash to get through the year, rather than allowing them to continuously fail’
Mr O’Leary made similar claims last year, alleging that Norwegian would go under in the winter because it ‘loses a heroic amount of money’ (pictured: a Norwegian Boeing in Buenos Aires, Argentina)
The airline rubbished the Ryanair boss’s statement, saying they had ‘no root in reality’ and that they had boosted revenue by 30 percent on the previous year.
Mr O’Leary described the tour operator and package holiday models as dead, adding that ‘nobody under the age of 40 buys a tour holiday or goes to a travel agency anymore, they do it themselves.’
The boss said that as his company continues to expand and people grow older, the dated travel company model would shrink to extinction.
‘The whole tour operator model is finished,’ Mr O’Leary added. ‘(The market) is screwed, it’s over.’
Mr O’Leary said he thought it was unacceptable for the CAA to have given Thomas Cook licence to keep running when industry insiders had scented its imminent demise.
‘The CAA should be much more aggressive in requiring the shareholders of those companies to put much more cash to get through the year, rather than allowing them to continuously fail,’ Mr O’Leary said.
Ryanair’s chief marketing officer, Kenny Jacobs, called on the CAA to introduce ‘more regular and robust’ stress tests on airlines and tour operators to limit the impact on the taxpayer in another similar scenario.
A tearful former Ryanair staff member at a UNITE union meeting in Glasgow on Monday
Mr Jacobs said he believed Thomas Cook would not be the last airline to collapse into administration, stating that he expects greater consolidation in the industry in Europe.
Ryanair also affirmed that growth next year would be below initial forecasts as it will be held back by lower numbers of new Boeing 737 Max aircraft than previously hoped.
Mr Jacobs said the company expects to have 30 aircraft in circulation from February 2020, down from previous expectations that it would have 50 of the craft.
The Boeing 737 Max aircraft have been grounded throughout 2019 after 346 people were killed in two crashes in Ethiopia and Indonesia but are set to be back in the air for the start of 2020.
The airline also admitted that the devaluation of the pound, driven by Brexit, could impact its performance.
He said: ‘In an ideal scenario, the pound would be stronger than it currently is.
Thomas Cook staff gathered emotionally at the UNITE offices in Glasgow on Monday to discuss their redundancy
‘Airlines like ourselves can benefit because it might mean passengers look for cheaper flights, but we do expect some customers to be put off by the greater cost of travelling abroad.’
Ryanair also reiterated that some cuts will be made at the company, highlighting that it currently has around ‘500 too many pilots’ and expects to cut some bases. The company currently has 86 bases globally, with 13 in the UK.
The company made the statement as it revealed it will launch 14 new routes for summer 2020, including flights to Cluj in Romania and Terceira in Portugal.