As air traffic numbers edge up from pandemic lows, Europe’s biggest budget carriers seem out to get a piece of each other as well as a bigger share of the passenger market, with Wizz Air trying, unsuccessfully, to buy out Easyjet, with Ryanair urging them on.
Ryanair, which is about the size of the other two combined, thinks a merger would be a good thing; Michael O’Leary, Ryanair CEO, told the Financial Times that if they don’t each might be bought by one of the struggling legacy airline groups that include Lufthansa, IAG and Air France/KLM. O’Leary’s view is that “Airlines need to be big to survive, and a fragmented market in Europe will not be sustainable in the long run.”
All three of the budget carriers, plus #4 Jet2, see the market as open for expansion while the legacy carriers are struggling with the costs of re-opening long-haul routes while competing at home with the budget carriers.
But there are other considerations ahead for expansion; all three of the carriers, and especially Wizz, are known for keeping costs to the bone, and are not likely to overspend on new planes or acquiring new routes. Merger offers may still be on the table in the next few months.
Ryanair, one of Boeing’s biggest customers with over 400 737s on hand and nearly 200 more on order dropped a plan to buy 250 of the largest model, the Max 10 in a dispute over cost last week. O’Leary thinks Boeing is asking too much for the planes, and Boeing is trying to hold the line as it expects demand to be up. Each, in separate statements, said they would not make a deal they didn’t see as benefiting their companies. Stay tuned…
