WTM2010: Ryanair “protecting commercial business” with base closures

“We’re not pushing passengers away by moving out of markets which have introduced passenger taxes, we’re protecting our commercial business,” Ken O’Toole, Ryanair’s director of new route development declared at World Travel Market (WTM).

O’Toole described Ireland as a disaster zone for aviation because of its travel tax. “It’s led to a 30% reduction of traffic from Dublin in the last two years,” he noted. The airline’s response has been to removed six aircraft from Irish bases.

With a new passenger tax being introduced in Germany from the beginning of 2011, Ryanair has already moved to cut bases and flights there too.

Elsewhere though, the carrier has continued growth throughout the downturn. “Since September 2009, we’ve added 11 new bases including a mix of primary and secondary airports. We’ll be adding more in 2011, but don’t expect many new primary airports. Though we have plenty of them wanting us, the majority still have costs which are too high for our model.”

In that period from September 2009 until now, Ryanair has introduced 431 new routes, with the most going to Spain, then Italy, UK, Germany, France, Norway, Portugal, Morocco and Poland. The highlight in Spain has been the opening of a base at Barcelona El Prat, O’Toole remarked, while in Italy the airline claims 43% market share. “But we are still underweight in Rome, Milan, Venice and Naples, so we plan to grow in all those cities,” he announced.

Being at World Travel Market, O’Toole emphasised the role of tourism departments in enticing Ryanair to open routes. “Firstly, we’re not interested in one-year strategies, we’re in it to develop long-term traffic growth,” he commented. “Tourism departments should encourage the creation of cost incentives which encourage growth and reward success.

“Additionally the tourism departments should take advantage of the buying power of Ryanair in purchasing print/outdoor advertising via joint advertising campaigns,” O’Toole continued. “Also they should consider increasing their web-based advertising with us. Ryanair.com gets 330 million page impressions a month.”

When a route is opened, Ryanair expects to see demand. “We’re willing to put money in and possibly make a loss for a while, but if we see demand we get the confidence to persevere. We always have our failures, but I’d say 5-10% failure only – not bad when you’ve introduced more than 450 routes in past 12 months.”

Bernie Baldwin, editor, Low-Fare & Regional Airlines/LARAnews.net
ExCel, London

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