WSJ:UPDATE Ryanair CEO: Greece Euro Exit Would Fuel Tourism Boom
-- Greece Euro Exit Would Fuel Tourism, Property Explosion
-- Ryanair 90% Hedged On Fuel Through September 2012
-- O'Leary 'Given Up' On Acquiring All Of Aer Lingus
(Recasts with views on Greece euro exit, adds Aer Lingus stake update)
By Frances Robinson
Of DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)-- Greece exiting the single European currency, then devaluing, would provide a tourism boom for the region and a better solution than the current bailout program, the chief executive of Ryanair Holdings PLC (RYA.DB) said Tuesday.
"What happens is Greece reintroduces the drachma, the drachma gets devalued 60%-70%, and there's a tourism invasion and property buying" the outspoken CEO Michael O'Leary told the Innovation Convention here.
He added that the bailout of Greece is "throwing money down a black hole" until the country complies with the conditions applied to its rescue.
Nevetheless, Ryanair, the world's largest airline by international passenger numbers, doesn't have a formal plan for coping with a potential collapse of the single currency. "We're Irish, so we don't have a formal plan for anything," he quipped.
The IMF, EU and European Central Bank last year agreed to a joint EUR110 billion, three-year loan program for debt-stricken Greece, before the worsening economy and Greece's stalling on key reforms forced new financing agreements that included private-sector writedowns on private debt holdings.
The prospect of rising oil prices, as demand from Asia surges, could be a boon for Ryanair, the CEO said.
Ryanair should have 79 or 80 million passengers next year, up from 73 million in 2010, as rising oil costs push customers from flag carriers to budget airlines, he noted.
"Oil prices are going to rise, British Airways and Lufthansa will put prices up and the passengers will come to us," Michael O'Leary told reporters. "It's the gift that keeps on giving."
The low-cost airline is 90% hedged on fuel costs through September 2012, and 50% for the six months after to March 2013, he added.
He also said he's "confident" of holding onto the company's 29% minority stake in Aer Lingus Group PLC (EIL1.DB). Last month, the U.K. Court of Appeal suspended the U.K. Office of Fair Trading's investigation into the stake, which was bought in 2006/2007 during Ryanair's failed merger offer for Aer Lingus. The OFT was investigating whether the stake gave Ryanair an undue influence over the Aer Lingus board.
"Unless the Irish government changes its mind, and offers to sell us its stake, we've given up " on acquiring the whole of Aer Lingus, O'Leary said. He said it was likely that eventually Aer Lingus' slots at London Heathrow airport and transatlantic routes would be acquired, before "selling the rest to us."
