(Sharecast News) - Summer air fares are set to rise by up to 15% as demand outstrips limited seat availability compared with pre-Covid pandemic levels, said said Ryanair chief executive Michael O'Leary.
O'Leary said there was no capacity growth in Europe this year, combined with "huge demand recovery".
"Last year we saw average fares rise by 20pc. There's going to be a second year of low double digits price inflation, because there is no capacity. I think this year there is a reasonable prospect... [during] the summer average air fares will be up 10-15% again," he told the Daily Telegraph newspaper.
Ryanair announced in January that booking numbers were at record levels as holidaymakers sought to secure deals amid soaring inflation. The carrier plans to fly more passengers this summer than it did prior to the pandemic, with the number of seats on offer 30% higher than 2019.
O'Leary said Wednesday's unexpected rise in inflation would not dampen demand, saying holidaymakers were undeterred by rising prices.
"Look at people's spending habits: try and get a hotel room or restaurant booking; a flight or going anywhere across Europe at the moment. People are spending. All this fuel poverty, inflation and [people not having enough] income - I see no evidence of people not spending at all. And that is not confined to the UK, [it is] all over Europe."
O'Leary said he was not concerned about the impact of rising interest rates and backed central banks to put them up.
"Interest rates do have to go back up to five or six per cent, maybe not as aggressively as the Americans and the ECB are driving them up. But you do have to take that heat out of the system. But we are in a very weird economy where you essentially have full employment and there is a lot of upward pressure on wages. People are spending money."
"I'm old enough to remember these rates were 20%. You know, everybody under the age of 35 thinks interest rates have always been one-to-two per cent. No, they haven't; they very rarely have been one or two percent."
Reporting by Frank Prenesti for Sharecast.com
