Does Ryanair’s EURO ANNIE mark the day that the low cost model changed forever? (Ryanair and successful partner airports celebrate prizes)
Where were you when it happened? Is the Ryanair business model changing forever? The latest results show costs/fares are going up, demand is slowing down, and they could just possibly be running out of airports to subsidise them.
Certainly, the list of upcoming new routes on Ryanair’s website is probably the shortest we can remember – and would be a lot smaller if you took out all the Venice Marco Polo routes, which are only there because Venice Treviso Airport is closing for four months for runway repairs. Take these out and you’re left with just 28 new routes announced so far for the rest of the year.
There were other signs when anna.aero went along to see Michael O’Leary present Ryanair’s full-year results on Monday and give him his EURO ANNIE:
- The expected 4% traffic decline predicted for this winter is the airline’s first-ever net reduction and combines with the smallest-ever 4% projected full-year growth, requiring it to park 80 aircraft in the coming winter compared with 40 last winter.
- The biggest cuts will be seen in Ireland (significant), Spain (most notably the 80% cut at Alicante) and the UK (although both Leeds/Bradford and Edinburgh will keep growing).
- The event took place at the 5-Star Threadneedles “boutique” hotel in the City of London, where anna.aero was quoted a room rate of £390, not including breakfast – tut, tut – isn’t it hateful how everything is an extra these days?
First bases in North Africa?
But while analysts and journalists looked for concerning news in this revolutionary and rich airline’s eventual/temporary maturation, there continues to be significant growth, wealth, and retained-cash relative to the industry, and MOL said he’d be “disappointed if the airline will not launch 6-10 more bases in a year’s time”, leaving it with 50+ bases.
Hinting at where these bases would be, MOL suggested one each in Spain and Italy, a second base in Central/Eastern Europe (other than Kaunas), “somewhere” in North Africa, “somewhere” in Scandinavia and also “somewhere” in the UK (in spite of capacity cuts also taking place in the country). There will not be new bases launched in Germany or France.
With the last 737-800s coming to Ryanair in 2012, there will be a period of reduced growth to maximise dividends 2012-2015, meaning that the next new aircraft will be needed in the 2016-2017 timeframe. O’Leary says they have talked to Airbus “but they don’t think we’re credible because they think we’ll use the negotiations to beat down Boeing”, although he maintains “if they undercut Boeing by 10% we’ll buy all the Airbuses going”.
Meanwhile, discussions have also taken place with Russian and Chinese manufacturers – although it is hard to see how a per-passenger cost of €6.40 for aircraft ownership and upkeep could be maintained, unless Ryanair starts getting its planes for free, along with some of its airports.
The prize-winning Kaunas team are:
- Dangiras Jakimavicius, senior procurement manager
- Renata Rakovaite, sales and marketing manager
- Jelena Blank, construction engineer
- Akvile Velickaite, analyst
- Vaidotas Antanaitis, sales and marketing manager
- Laura Bragaite, lawyer
- Dovile Kavaliunaite, procurement specialist
- Kristina Cesnaite, environment manager
- Jurate Baltrusaityte, commercial director
- Arijandas Sliupas, general manager
- Daiva Jureviciute, accountant
- Karolis Cepukas, sales and marketing manager
- Arturas Stankevicius, airfield operations manager
- Kristina Bacinskiene, HR manager
- Vaida Grabauskiene, finance & accounting manager