The ‘opposite’ is true – Irish inbound traffic is declining! Letter from Michael Cawley COO & Deputy CEO, Ryanair

anna.aero postcard

anna.aero's Editor Ralph Anker is on holiday this week.

Dear Ralph

I’ve read your analysis of Ryanair vs. Irish Govt in last week’s edition of anna.aero and would make the following comments;

You highlighted the fact that overseas travel was down by 3% in Q1 but visitor numbers up by almost 9%.

(anna.aero note: These Central Statistics Office figures include ALL travel, including ferries)

Given that over 90% of the tourists arrive by air these are hardly credible figures. We carry close to 50% of the total passengers and our numbers clearly indicate that the inbound proportion of our passengers is down by more than the total fall, a fact borne out by your analysis that the only growth in your individual country analysis was to Spain and Portugal, largely outbound markets in themselves.

(Or in other words: Ryanair’s figures suggest the opposite to the CSO trends – that inbound traffic is declining; Cawley is saying this is supported by the anna.aero analysis of capacity falls in all markets except Spain and Portugal, which generate only limited inbound traffic)

As a consequence, those markets with more incoming .passengers actually declined, which would lead one to believe that the decline in visitor numbers was at least as much if not more than the overall decline in passenger traffic. That is the key issue here, and one that got slightly lost in your analysis, in that you didn’t definitively highlight that inconsistency in the numbers from the Central Statistics Office. Remember: Their analysis covers just 90,000 passengers who were asked one question (“What is your country of residence?”) so I would have thought the room for error is quite considerable and is highlighted in these numbers.

(Or in other words: Cawley is saying CSO’s survey methodology leaves a lot of room for error. This gives greater weight to the indications of the opposite trend: That inbound traffic, if not falling more than outbound traffic, is at least falling at the same level.)

On a second point, the issue of influencing the number of passengers coming into the country without generating any growth out of Ireland is an interesting one. As the only truly pan-European airline with in excess of 15% of its traffic coming from each of the UK, Spain and Italy and a further 12% from Germany, Ryanair is the airline best placed to maximise inbound traffic to Ireland rather than Aer Lingus whose predominant constituency on short-haul is Ireland itself. Therefore overall Ryanair carries far more people into Ireland from Europe and the UK than any other airline and also carries more as a proportion of the total on an inbound basis than does Aer Lingus on its short-haul network.

(Or in other words: Ryanair, with a strong presence in key foreign markets, believes it can bring more inbound passengers to Ireland than Aer Lingus, which is stronger in Ireland itself and thereby is more likely to keep a large share of outbound passengers)

You are quite right in highlighting the fact that additional inbound tourism/business is likely to prosper best when that market is not interfered with by taxing outbound traffic, while not taxing inbound traffic. But you should have gone the step further to emphasise that if you do take the approach of dealing with them both in the same way, by eliminating the tax for both, then the optimum outcome for Irish tourism, in terms of maximising inbound traffic, surely lies with Ryanair’s franchise around Europe which has such pulling power out of all the major markets from which the Irish government seeks to maximise its tourism numbers.

(Or in other words: We are the best. Tax is bad.)


New route? New airline? Email us! Let’s all celebrate your new routes. Contact us with photos and route details, and follow us on Instagram for our exclusive daily digest.

Comments

  1. Jürgen says:

    Ryanair’s Point of View…
    It should be logic, that inbound passengers are of value for the region. With Ryanair asking for substantial support from the airports served, it is tricky, if the passenger flow is mostly outbound.
    It makes sense for destinations like the Costa Brava (not just Girona) to get people to fly to their region (and likely stay there). But why should a region that is just the airport for the outbound traveler pay? The Duty-Free shopping is at the remote airport, the money is spend in the vacation region, …
    The situation IS different if the route is not a typical vacation-destination, but also has a commercial impact (business travel).
    But in the end, it comes back to the question that many regions cannot even answer properly: How much is a passenger worth (in- vs. outbound)?

    The answer can be answered differently if you work with ’empiric’ data instead of facts. Who’s right? Ryanair CAN be right, but…

  2. The problem with Ryanair is that they are an EXTREMELY unreliable partner for any region wishing to improve inbound traffic. Their negotiation practice is often perceived as something close to extortion – as long as you satisfy their insatiable hunger for hidden subsidies (“promotional campaigns”) and airport tax/fee cuts, everything is fine.
    But millions of euros later, the moment you say “now we helped you enough to continue on your own” they just close down or heavily cut back operations ( Valencia, Granada, Fuerteventura,… – ask the local politicians and associations what they think about Ryanair).
    So first they expel long standing carriers on which local tourism has relied on for decades, then they create a short-lived boom and finally you either pay or face disaster. I have worked with some destinations (not the ones I mentioned), helping them in the negotiation process with potential operators, only to find out that Ryanair has been a very mixed blessing for many of them in the long run.
    Of course, cheap flights are good to stimulate tourism (depending on the local tourism business development model), but either there is a very clear strategy about long term air connectivity and the desired mix of operators, or Ryanair can pretty much complicate things in the long term.
    Said that, I think Ryanair is a great company that has the merit of having changed deeply the all too self-complacent rules of the European airline industry.

  3. LG says:

    Seems Rhodes currently faces the same problem

  4. Martin says:

    There is also the fact that a single Ryanair passenger will not be equal to a BA or Aer Lingus passenger.
    Business travellers and ‘premium’ tourists still avoid Ryanair due to their budget model. While you have to admire Ryanair for getting more people flying, is the benefit of 10 Ryanair passengers more than 1 BA passenger with their extra spending power (shown by the fact that they avoided the ‘cheaper’ alternative)

  5. Jürgen says:

    What makes me wonder: If Ryanair generated e.g. 200.000 passengers at an airport, why do other airlines not take up the route when Ryanair retreats. Even if they only generate 1/3rd of those passengers, that would be quite some business to start with… And sometimes we talk higher passenger numbers.
    I do understand, that some passengers may have had the focus on the lowest price and are unreliable at that, but that is only have the story.

    If I cannot attract passengers on a “normal” business model, I may have other shortcomings, not to be blamed on Ryanair?
    A bad reaction often seen: The airport / region was willing to invest millions in Ryanair. But they do not invest a penny in the development of a “normal” route “post-Ryanair”, supporting the risk for the non-Ryanair to (re-)establish the route on a sound, long-term strategy.

  6. AndrewJM says:

    It is because many of Ryanair’s routes are not viable on a normal business model. They rely on getting every cent out of each passenger through extortionate excess charges, unavoidable check-in and credit card fees and rip-off on board sales, as well as bullying airports into lowering fees to a negligible amount. This was fine whilst the economy was good and the passengers had plenty to spend once in the airport, but with a lot of belt-tightening going on and with new excess charges, many airports are finding that their own ancillary revenues are in decline.

    Filling a plane with all of this going on is not difficult. Filling it at a decent yield where the airport also benefits is a completely different matter.

Comments are closed