Ryanair would move some investment out of Britain if it votes to leave the European Union and the “extreme volatility” that would follow such an outcome could put downward pressure on air fares in the short term, its chief executive said on Friday.
The Irish low-cost airline, Europe’s largest by passenger numbers, flies 40 million of its 100 million-plus passengers a year to and from the United Kingdom and has its largest hub at London’s Stansted Airport.
CEO Michael O’Leary is one of the most vocal business leaders campaigning for a vote to remain ahead of the June 23 referendum on EU membership.
“After 9/11, after every crisis Ryanair is selling cheaper fares, we keep people flying. So the fact is it would have a downward effect on our pricing for six to 12 months, but we will keep people flying,” O’Leary told reporters.
“The longer term effect though is we will invest less in the UK, we will certainly switch some of our existing UK investment into other European counties because we want to continue to invest in the European Union and it will be bad for air travel and British tourism.”
British air fares could also rise sharply in the long term if a vote to leave threatened Britain’s access to EU air services agreements, he added.
A Brexit may also put some downward pressure on aircraft prices and O’Leary said there is always an opportunity for Ryanair to stock up in such a downturn, though its current supply of Boeing planes takes it out until 2023.
However, he said the “Remain” campaign should be cautious about warning of “apocalyptic scenarios”. While a period of extraordinary volatility would undoubtedly follow for six to 12 months after a Brexit, fundamental economics would then take over and sterling would recover, O’Leary said.
Ryanair is spending around 25,000 euros ($28,370) to run advertisements calling on its customers to vote to remain, he said, and would step up that marketing drive closer to the referendum date.
“Most of the contribution being made by Ryanair is through our email, our customer base, advocating a remain vote because we fundamentally believe it’s in the UK’s best interests to remain in Europe,” O’Leary said.
“Will Ryanair have any effect? I think not really. Around the margins, we may.”