“There are changes coming, but to what extent – we don’t know,” Budapest Airport’s Patrick Bohl, Head of Airline Business Development rather prophetically told anna.aero during the 131st IATA Slots Conference in Toronto a couple of weeks ago.
Those uncertainties became certainties a few days later with a Ryanair statement firmly blaming the airport owner: “40% cuts at Budapest as Hochtief fails to offer competitive costs” leading to the axing of 10 routes and the dropping of two based aircraft – all very different news from when the airline had helped save the day with the new Ryanair base launched in mid-February following the collapse of Malév.
|Launch date||Origin||Destination||WF*||Competition (WF**)|
|17-Feb-12||Budapest (BUD)||Karlsruhe-Baden (FKB)||2|
|18-Feb-12||Lübeck (LBC)||3||Lufthansa – HAM (6)|
|18-Feb-12||Oslo Rygge (RYG)||3||Norwegian – OSL (6)|
|18-Feb-12||Memmingen (FMM)||3||Lufthansa – MUC (33)|
|26-Mar-12||Malaga (AGP)||2||Wizz Air (1)|
|14-May-12||Weeze (NRN)||4||Lufthansa – DUS (11)|
|Source: anna.aero New Routes Database and Innovata
*WF: Weekly Frequencies at launch **WF: Weekly frequencies w/c 7 January 2013
High operating charges imposed by airport operators across Europe are indeed cited as the usual suspects when it comes to Ryanair closing down shop. However, anna.aero’s comparison of published monthly traffic data for airports in Germany and the UK (source: destatis.de, March-August 2012; CAA UK, March-September 2012) with relevant capacity figures (source: Innovata), show it was pretty likely that the axed routes were mainly just under-performing.
Load factors unsatisfactory
While the average load factor across Ryanair’s network is 84% (source: Ryanair’s Half Year Results, 30 September 2012), none of the German routes neared this result; indeed Ryanair had already ceased operations on November 12 on its weakest German route to Memmingen/Munich after load factors were unable to climb much above 55%. Flights to the axed route of Birmingham turned out to be the sole route to exceed the 90% load factor threshold, but only in the peak month of August.
Despite poor loads, the routes abandoned, but ‘warmed-up’ by Ryanair, will now be examined by other carriers for opportunities. Of the 10 axed services only Alicante faced direct competition – low-frequency flights by Budapest Airport’s largest carrier, Wizz Air (which is scheduled to relaunch the service in June 2013). On four further routes – three to Germany and one to Norway – Ryanair was indirectly challenged by carriers preferring to use the main cities, rather than secondary airports. In January 2013, Lufthansa will offer six weekly flights to Hamburg (in competition with Lübeck), 11 weekly flights to Düsseldorf (18 weekly during S13) – competing with Ryanair’s Weeze services, as well as 33 weekly frequencies to Munich (to which Memmingen was Ryanair’s alternative). Norwegian will also offer six-per-week services to Oslo’s main airport, whereas Ryanair was using Oslo Rygge.
New services from SAS; Wizz Air enters regulated routes
Indeed Wizz’s EVP, John Stephenson, told anna.aero it is very interested in the routes already warmed up by Ryanair: “Wizz Air is very committed to the Budapest market and, following Ryanair’s announcement to cut routes at BUD, as you would expect Wizz Air is looking at any potential opportunities arising from this decision.”
|06-Dec-12||Wizz Air||Tel Aviv (TLV)||3||A320|
|14-Dec-12||Wizz Air||Geneva (GVA)||3||A320|
|14-Dec-12||Wizz Air Ukraine||Kiev Zhulyany (IEV)||3||A320|
|Source: anna.aero New Route Database
*WF: Weekly frequency at launch
Additionally routes to Moscow and Istanbul might soon follow, as Wizz Air awaits designation and regulatory approval. Meanwhile Wizz has three new routes starting in December – Geneva, Kiev and Tel Aviv.
In addition, in a well-timed announcement for both Budapest and the serial re-financed SAS, the Scandinavian carrier will relaunch flights from Copenhagen and Oslo for the coming summer season. “A large number of Hungarian and Nordic companies have expressed a strong desire for a direct service between Hungary and the Nordic countries and this is SAS’ response” said Stefan Eiche, SAS’ GM Hungary.