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City A.M

City A.M

CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…

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Budget Airlines Defy Travel Slowdown Concerns

  • Ryanair reported a 9% YoY growth in passengers, while Wizz Air witnessed a 21% YoY surge in September.
  • Both airlines had a strong load factor, with Ryanair at 94% and Wizz Air at 92%, indicating high seat occupancy.
  • While the aviation sector expresses caution over post-pandemic demand and financial pressures, these two airlines demonstrated resilience.
Airlines

Ryanair and Wizz Air reported strong passenger growth over September, despite fears in the industry of a slowdown in demand following this years’ summer bonanza.

Ryanair saw passenger numbers rise 9 percent year-on-year to 17.4m, representing a slight dip on Augusts’ record 18.4m.

Wizz Air meanwhile pipped its rival with a 21 percent year-on-year jump to just under 5.5m passengers, falling from just over 6m in August – typically the busiest month of the year.

Both low-cost carriers maintained strong load factor – the proportion of available seats filled by passengers – at 94 and 92 percent respectively.

It comes despite fears in the entire travel industry of an aviation slowdown, as airlines emerge from one of the busiest summer seasons on record, which saw many carriers post record profits and smash pre-pandemic levels of passenger traffic.

There are quiet concerns within the industry over whether so-called pent-up demand after Covid-19 lockdowns will continue to prop up the aviation sector amid high inflation and a cost of living crisis.

Corporate travel, which typically sustains airlines in the latter half of the year has yet to recover to 2019 levels and a number of US-based airlines saw cracks in their most recent set of financial results.

Low-cost airline Spirit issued a profit warning in early September, meanwhile JetBlue had already noted a “shift away” from domestic travel earlier in August.

Ryanair chief Michael O’Leary told the Financial Times in September he remained cautious despite seeing winter bookings at 3-4 percent higher year-on-year and raised concerns over the “state of consumer confidence… you have higher interest rates, higher mortgage payments and energy prices.”

Back in July, Heathrow chief executive John Holland-Kaye told City A.M. that airlines shouldn’t bank on the insatiable demand continuing into the winter months.

“Business was about 34 percent of our demand in 2019, it’s now down. So it is coming back much more slowly, which is sort of what we would have expected. The surprise is that leisure demand is defying gravity and I think we all think it’s only a question of time before that starts to slow down,” he said at the time.

But the travel industry has remained resilient thus far. On the Beach Group issued a bullish trading update earlier in the year, and said that its winter bookings had risen 26 percent on 2022.

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Disruption in the form of Air Traffic Control (ATC) chaos and industrial action at Heathrow Airport still threatens to spoil the party, with half term chaos expected at the UK’s largest airport and staff shortages across Britain’s ATC sector still a major concern.

By CityAM 

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