Ryanair’s CEO Michael O’Leary has said that rival airline Norwegian is bound to go bust sooner or later, claiming that the company is “doomed.”
- He claims Norwegian is “saddled with enormous debt”
We’re seeing the emergence of four or five large airlines across Europe and Ryanair is by far the largest in passenger number terms, and you’ve seen in our numbers this morning that we’ve delivered 11% traffic growth … on the back of 5% lower airfares,”
In the past number of years, airlines in Europe have been going bankrupt and airlines are buying other airlines (IAG/Iberia bought Air Europa yesterday). Many people predict four to five main groups will remain in the end:
- International Airlines Group (British Airways, Iberia, Aer Lingus, LEVEL, Vueling, Air Europa)
- Air France/KLM Group (mixed with Virgin Atlantic and Alitalia, but possibly not Alitalia)
- Lufthansa Group (Lufthansa, SWISS, Eurowings, Brussels Airlines, Austrian, possibly Alitalia in the future)
- Possibly EasyJet
Asked whether he thinks Norwegian is going bust, O’Leary referenced Norwegian’s decision to sell aircraft this year.
“They’re now resorting to selling the aircraft to raise 50 million bucks, which wouldn’t pay the fuel bill for a week. Norwegian is doomed, the business model doesn’t work and they’re saddled now with enormous debts. It’s only a matter of time before it goes bust.”
- Ironically, a few weeks ago Norwegian reported net profit coming in at 1.67 billion Norwegian krone, which is 28% higher than the same quarter a year before.
2019 has been a huge loss for many airlines especially in Europe. Thomas Cook, Aigle Azur, Adria Airways, XL Airways France, Air Europa was bought yesterday, Alitalia has whatever financial issues.
- Ryanair’s CEO believes Norwegian "won’t be far behind them.”
Do you think Norwegian will collapse soon?