At the same time as many industry organisations are competing to see who can announce their news the loudest at Farnborough, Ryanair this week released its latest financial report. The results from the first quarter of its financial year were presented by Howard Millar, deputy chief executive and CFO, at a press conference in London and while mainstream media reports focus on the financials, Millar also provided interesting insight into the current state and future plans for the airline’s route network.
This financial year, Ryanair expects to grow its passenger numbers by over 10%, having managed to increase its first quarter passenger numbers by 8%, in spite of the 18-day volcanic ash disruptions, which it estimates cost the airline €50 million.
Ryanair’s average sector length has increased by 13% in the last year – from 1,029 km last July to 1,165 km this month – as the airline has expanded into markets such as Morocco and the Canary Islands. This trend will remain in the coming winter season, with sector lengths up by nearly as much when compared with the previous winter season.
Europe’s Big 5 markets remain core network; Turkey next move?
Ryanair’s core network focus will remain in the big five economies of Europe; the UK, Spain, Italy, Germany and France. By this month, the airline’s Spanish capacity has in fact climbed to be only 5% lower than the main British market. Millar does, however, point out that they do not consider the UK market to be mature, but sees more potential.
In spite of this focus, the airline is no stranger to introducing new markets in the periphery. When anna.aero attended Ryanair’s Q3 result presentation in February, the airline’s COO Michael Cawley talked about opportunities in “Eastern Europe” in general terms. The subsequently launched Kaunas base supported that. Millar now specifically mentions Turkey as a new market catching Ryanair’s interest; in particular with great potential shown for VFR traffic to and from Germany.
Although it is still unclear where the downsized UK capacity will be shifted to, Millar promises with a smile that “new developments” will be announced very shortly, raising hopes of a major new announcement.
Glad not to have ordered more 737-800s; “one of the best decisions we never made”
By March 2013, Ryanair intends to operate 299 aircraft, 49 more than the current number, which is the result of new deliveries, minus 17 currently operated aircraft being returned to lessors and six aircraft being sold. This 20% increase indicates a drastically lower growth than previously recorded.
Anyone concerned with Ryanair’s growth coming to a sudden end when the airline’s ordered 737-800s are fully delivered in 2012 can, however, be calmed by Millar’s enthusiasm over Airbus’s recent indications that a re-engined A320 family is to be announced imminently. He argues that this will put pressure on Boeing to do the same, referring to the ended talks with the American aircraft manufacturer last December as “one of the best decisions we never made.”