Ryanair boss: high oil prices will break German rival
The Local · 12 May 2008, 12:50
Published: 12 May 2008 12:50 GMT+02:00
In an interview with the Frankfurter Allgemeine Sonntagszeitung, Ryanair’s chief executive said if oil prices remain at current record levels or rise further, some Ryanair competitors would be forced out of business.
Among the victims would be German's second largest airline, Air Berlin, O’Leary said. “Air Berlin is lost. This is an airline with high costs that’s losing money,” the boss of Europe’s largest budget airline told the paper.
“Oil now costs $120 a barrel. If it stays that way for the next 12 months, then we’ll be one of the few profitable airlines in Europe to survive,” he said, adding that five years from now, Ryanair and Germany's top airline Lufthansa would share the German market.
O’Leary’s dire comments raised the pressure on Air Berlin shares early on Monday, causing it to dip almost five percent. Air Berlin however rejected O’Leary’s doomsday prophecy. “We don’t have to react to every nonsense that O’Leary says,” Peter Hauptvogel, Air Berlin’s spokesman said.
World oil prices have rocketed 25 percent since the start of 2008 and have doubled in the past 12 months from around $62. The price surge has been putting pressure on airlines across the world. On Thursday, Lufthansa announced a rise in its fuel surcharge on European and intercontinental flights.
O'Leary promised that Ryanair would not follow suit and vowed the company would double in size over the next four years. He said Ryanair plans to cut its ticket prices by half despite soaring fuel prices, helping it grow substantially.
The company plans to double the number of customers to 80 million and to double the number of planes to 300 within four years, O'Leary said, according to the paper.