Ryanair boss: just 5 airlines will survive

O’Leary sparks storm by claiming rivals will be gobbled up or wiped out across Europe – as summer of strikes looms

RYANAIR boss Michael O’Leary infuriated his rivals last night by predicting a series of takeovers that he believes will soon leave just five main airlines operating in Europe.

In a provocative interview with The Mail on Sunday, O’Leary suggested that London-listed Wizz Air, Norwegian Air, Alitalia and Air Portugal will all fall into the hands of larger peers in the next five years.

He said many other firms would be forced out of business as they contend with steep fuel prices, Brexit uncertainty and another summer of delays and cancellations caused by strikes.

O’Leary claimed the only big survivors would be easyJet, Germany’s Lufthansa, Franco-Dutch giant Air France KLM, International Airlines Group – the FTSE100-listed owner of British Airways – and Ryanair.

‘You are going to see more failures and more consolidation,’ he said. ‘I think in Europe... five major airlines will control over 80 per cent of the traffic.

‘Everybody else in the next five years is either going to be taken over by, become a partner of, or be subsumed into one of those groups.’

Flybmi, Germania, Primera Air and Cobalt of Cyprus have all gone bust recently, while Norwegian Air and Thomas Cook’s airlines arm have been the subject of takeover rumours this year.

O’Leary added: ‘The obvious developments, as we would see it: I think IAG will eventually buy Norwegian; I think that would lead to Lufthansa probably buying Wizz; I think it’s inevitable eventually that when the Italian government stops screwing around with Alitalia they will finish up back in the Air France KLM family; Tap [Air Portugal] will finish up as part of IAG.’

An industry source last night described O’Leary as a ‘Machiavellian’ and a ‘troublemaker’.

A Norwegian Air spokesman said O’Leary’s comments had ‘no root in reality’, adding: ‘Norwegian has been through a period of significant growth and as has been previously announced the airline will change its strategic focus from expansion and growth to profitability.’

Willie Walsh, chief executive of IAG, last week declined to rule out a future bid for Norwegian, telling reporters: ‘Never say never, but I think it’s unlikely.’

His firm previously looked at making a bid but chose not to push ahead with a takeover earlier this year.

O’Leary told The Mail on Sunday that Ryanair is planning to grow ‘organically’ by increasing its existing operations rather than buying rivals. But he added: ‘Opportunities, though, crop up.’

He ruled out any interest in buying Norwegian Air or Thomas Cook’s airline business.

Airline executives warned last week that the coming summer could be just as bad for delays and cancellations as 2018 when they are estimated to have cost the EU economy £15.2 billion.

The industry claims that 60 per cent of the delays were due to air traffic control disruption including from strikes in France and Germany. Lengthy hold-ups result in the airlines having to pay substantial compensation to passengers.

FAMILY-owned Timpson Group has recorded a record year after its chain of shoe repairers, photo shops, dry-cleaners and hairdressers hit 2,000 sites.

The 154-year-old company, based in Manchester, is famous for its shoe repairs and key-cutting, but its diversification strategy means just a small part of its revenues now come from its traditional operations. Accounts just filed for the year ending September 29, 2018, show turnover rose from £260million to £278million, while pre-tax profits increased from £12.6million to £14.2million, in spite of the extreme weather at the start of 2018 and ‘a few exceptionally quiet days due to the Royal Wedding and England’s progress in the World Cup.’

A £1.7 million dividend was paid out, compared with £6.9 million previously.

Chairman John Timpson, great-grandson of the firm’s founder, said the company added value to businesses in decline elsewhere, such as photo-processing and shoe repairs, by focusing on service. ‘We are fortunate to be in a business which is difficult to provide on the internet,’ he said.