Ever since the ‘bus with wings’ concept began in the 1990s spearheaded by brilliant businessman Stelios Haji-Ioannou with his bright orange easyJet fleet which suddenly made it possible for the good working people of Britain to spend their spare time in Sorrento rather than Skegness for the same price, budget airlines have been so popular that they are a huge challenge to flag carriers, and the bugbear of the men in suits who would rather the public had less freedom.
Preceding easyJet was Ryanair, Ireland’s ubiquitous budget airline whose fares have been constantly cheaper than a full tank of fuel for the car or a train ticket ever since establishment in 1984. However, it was the 1990s when this market really got competitive.
The profligate national flag carrying airlines have had very little chance of competing with the budget airlines, and given that operating an airline is one of the most cost and resource hungry businesses in the world, governments with vested interests and partial or full ownership of national carriers have taken a dim view of the budget carriers which represent a bastion of freedom in a difficult sector.
There have been several attempts to curtail the success of budget airlines, including climate rhetoric, increased regulations which put a cost burden on the airlines which have to adhere to it, high landing fees, the moving of budget carriers to smaller terminals in main airports or to lesser used airports, and more recently the lockdowns and travel restrictions.
Such travel restrictions hit the budget carriers the hardest. Many passengers on budget airlines are not traveling for work, therefore would not have been able to show contracts or essential need to travel, giving rise to the possible opinion that the restrictions were aimed at curbing freedom of movement for a vast section of society.
However, as with many business sectors that are massively popular, the budget airlines are bouncing back and Ryanair, led by the outspoken and highly successful Michael O’Leary whose no-nonsense, direct approach has made him an industry figure, is on the up, in a big way.
Ryanair stock closed a remarkable 3.92% up yesterday compared with Monday’s performance, which itself was a considerable rise over the close of business on Friday last week.
February has begun with a huge bang for Ryanair, and in keeping with the company’s ultra-competitive ethos, Ryanair began the month by launching a price war in order to bring as many customers back on board as possible, which should not be too difficult at all given that the Omicron saga was no more than a media push by the governments of the West and in Britain at least, common sense defeated the over-hyped common cold and the nation, and its skies are wide open for business.
Ryanair has a long way to go, however. It is up to its cockpit in losses, with £375 million having been lost as a result of the state-imposed flight bans, but investor confidence is high because people can see past that and Michael O’Leary’s unwavering optimism and business spirit is shining through.
As the nation watches headline after headline on how the government in Britain – the only one which got caught out – carried on as normal whilst forcing business to shut their doors for months and policing people on their everyday movements, the wheels have finally fallen off the whole narrative around Covid and even the most devout believers have had the reality displayed candidly to them, hence mass non-compliance would be a likely outcome if the government ever attempted to curtail the movements of the public ever again.
This is very good news for Ryanair, and the markets certainly think so. With the price war underway, there is more than a degree of optimism that the firm will pull back from its losses.
Who’d have thought? Whilst truck drivers blockade the highways and over a million people assemble outside the parliament buildings in Canada, a nation which once was a hot destination for immigrants from Europe and the United Kingdom because of its freedom and possibilities, Britain is as free as a bird.
And the big silver bird is what will now be seen over the skies of Luton, Manchester, Gatwick, Bristol and Birmingham!
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
