the times | Tuesday May 17 2022 2GM 41
Business
Ryanair will fly 15 per cent more ser-
vices this summer than in the holiday
season before the pandemic struck
after forecasting that it will carry a
record 165 million passengers this year.
Europe’s largest airline declined to
say how much money it was expecting
to make, suggesting only “modest prof-
itability”. It warned that recovery was
fragile and that, amid the war in
Ukraine and the threat of new waves of
Covid-19, as well as a recession on the
horizon, fares may have to stay low.
Nevertheless, as the airline published
large losses for a second consecutive
year, Michael O’Leary, its chief execu-
tive, was all but rubbing his hands at
what he said was the prospect of his
rivals struggling during a cost-of-living
The introduction of variable local
electricity prices could save consumers
in Britain £30 billion by 2035, a study
claims.
People in Scotland and the north of
England would benefit the most
because abundant power from wind
farms would result in lower electricity
prices in their areas, the report by the
Energy Systems Catapult, a green
energy innovation organisation, and
Octopus Energy found.
However, people in every region
would see benefits because the whole
system would be much more efficient
Ryanair looks past latest losses to
year of record passenger numbers
Robert Lea Industrial Editor crisis, with passengers searching for the
lowest prices.
For the year to the end of March,
Ryanair flew 97 million passengers and
suffered losses of €355 million as it, like
the rest of the aviation industry,
struggled with waves of Covid variants
and ensuing lockdowns and travel
restrictions. In the previous year, the
first full year of the pandemic, it flew
27 million passengers and lost more
than €1 billion. In 2019, its record year,
it carried 148 million passengers and
made a little more than €1 billion of
profit.
For this financial year O’Leary, 61, is
forecasting that Ryanair will carry
165 million passengers, but he said it
was “impractical if not impossible to
offer sensible or rational guidance” on
fare levels and therefore also on yields
— the margin it makes per passenger —
or profits. “We cannot put a number
on it,” he said. “The recovery is fragile.
The outlook is shrouded in uncertainty
and subject to adverse newsflows, as
we have seen with Omicron and
Ukraine.”
He said that investors’ main worry
was an impending recession just as the
industry recovered from the pandemic.
“Ryanair grows faster in a recession, as
we have done in the last three or four,”
he said. “In recessions, price is king.
People are more price-sensitive and
they trade down to the lowest-cost pro-
vider, whether that be [the retailers]
Ikea, Lidl or Primark and, in the airline
market, Ryanair. We have never had so
many opportunities for growth.”
He said that, helped by the arrival
into its fleet of the slightly larger butlower-fuel-burning 70 Boeing 737Max
aircraft this summer, with another 140
on the way, Ryanair would be growing
at 20 million passengers a year to reach
225 million by 2026. O’Leary also
called for Boeing to make changes to its
senior management to help to sort out
a series of delayed deliveries and lost
business to Airbus, claiming that bosses
at its commercial aircraft business were
“not up to the job”.
He claimed that Ryanair was already
taking market share from British Air-
ways, which has cut services to Italy
and Spain, and from Wizz Air in the east
of Europe in Austria, Hungary and
Poland. With the collapse and latest
rebirth of the Italian flag carrier —
formerly Alitalia, now ITA — he said
that Ryanair now had more than 40 per
cent of the market in Italy.Local electricity pricing ‘could cut billions off bills’
and would cost less to run, the study
claims.
The National Grid is calling for the
introduction of local wholesale elec-
tricity pricing because the national
market was “not designed for net zero”
and risked imposing “excessive costs to
consumers”.
At present, power plant owners can
sell their electricity on the national
market even if the cabling network
cannot physically transmit that power
to where there is demand. National
Grid’s control room then has to inter-
vene and pay wind farms in remote
locations to switch off, and gas plants
closer to consumers to fire up andreplace them. The cost of dealing with
these network constraints stands at
more than £1 billion a year and is fore-
cast to rise.
A local system, similar to those in
parts of America, would reflect supply
and demand within the constraints of
the cabling network, meaning that
power plants would get paid only if
their electricity was needed locally or
could be transported to where it was
needed.
The Energy Systems Catapult said in
the report: “If we fail to reform, we risk
spiralling costs to balance the system
and spending billions of pounds of cus-
tomers’ money on generation and newtransmission wires that are poorly
located and adapted to our needs.”
Research conducted for Octopus
Energy, which funded and collaborated
on the report, found that savings could
be £3 billion a year, or £30 billion by
2035, because of “more efficient
location and dispatch of generation
and storage across the system”. For
example, local pricing would encour-
age the construction of offshore wind
farms closer to England, where demand
is highers. The savings assume that not
only do wholesale prices vary locally to
reflect supply and demand during the
day, but also that variations are passed
to households in their energy bills.Emily Gosden Energy Editor
Minister puts
carbon border
tax on agenda
Emily GosdenCheap imports of steel, cement and
other goods made in polluting factories
overseas could be hit with extra taxes to
protect British manufacturers that face
high costs from tough environmental
rules.
The carbon border adjustment
mechanism, commonly known as a
carbon border tax, will be among
options in a consultation later in the
year, Lucy Frazer, the financial secre-
tary to the Treasury, said yesterday.
Groups including the Climate
Change Committee and the Centre for
Policy Studies have asked ministers to
consider such a tax to tackle the prob-
lem of “carbon leakage”. This is when
countries impose costly environmental
requirements on domestic industries,
which results in these industries either
relocating or losing out to competitors
in more lax and cheaper countries.
Frazer said that “the best way to pre-
vent carbon leakage would be for all
countries to move together in pricing,
regulating and therefore reducing
carbon emissions”, but that the govern-
ment would consider domestic action.
She said it intended to “consult later
in the year on a range of carbon leakage
mitigation options, including on whe-
ther measures such as product stan-
dards and a carbon border adjustment
mechanism [CBAM] could be appro-
priate tools in the UK’s policy mix. A
CBAM applies a carbon price to
specified imports to mitigate differ-
ences in carbon pricing between juris-
dictions.” The Centre for Policy Studies
has said a carbon border tax would
ensure a level playing field for indus-
tries in the north and the Midlands.JACK ECKERSLEY/DE&SA
Scottish
shipyard has
won a
£30 million
contract to
provide maintenance
services for two Royal
Navy aircraft carriers(Greig Cameron writes).
Under the ten-year
agreement, which is
expected to secure about
300 jobs, maintenance
and repairs on HMS
Queen Elizabeth and
HMS Prince of Waleswill be carried out in the
dry dock at Babcock’s
facilities in Rosyth, Fife.
The yard previously won
the first maintenance
contract for HMS Queen
Elizabeth in 2019.
Each carrier has adisplacement of
65,000 tonnes and cost
£3 billion to build.
Babcock, which employs
about 2,000 people at
the yard on the Firth of
Forth, said it had
invested more than£100 million in skills and
infrastructure.
Sean Donaldson,
managing director of
marine engineering and
systems for Babcock at
Rosyth, said: “We are
delighted to have beenawarded the contract to
provide dry dockings for
the aircraft carriers over
the next decade. The
investments in our
Rosyth infrastructure
and facilities over the
last ten years mean we
are ideally placed to
deliver projects of this
size and scale.”
A six-week
programme of
maintenance is
scheduled to take place
next year.
Jeremy Quin, defence
procurement minister,
said: “The Queen
Elizabeth-class carriers
are the flagships of our
Royal Navy and it’s
crucial they remain
ready to protect and
defend the UK and our
allies. Both carriers had
their final construction
in Rosyth and I’m
pleased they will return
for their dry dock
maintenance,
supporting vital jobs and
skills in Scotland.”
Douglas Chapman,
MP for Dunfermline and
West Fife, said the deal
“cements the area’s
reputation as a world
leader in maritime and
shipbuilding”.Royal Navy
carriers
deal lands
at Rosyth
HMS Prince of Wales will
be maintained at the port
where it was officially
named in 2017