Vienna: Ryanair calls for a new incentive program

Michael O'Leary and Andreas Gruber (Photo: Jan Gruber).
Michael O'Leary and Andreas Gruber (Photo: Jan Gruber).

Vienna: Ryanair calls for a new incentive program

Michael O'Leary and Andreas Gruber (Photo: Jan Gruber).
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In the 2024 summer flight schedule, the low-cost airline Ryanair will offer four new routes from Vienna-Schwechat with Olbia, Rijeka, Split and Tirana. The Alpine republic also has Klagenfurt and Salzburg airports in its portfolio.

In the Austrian capital, Ryanair Group members Lauda Europe, Malta Air and Buzz operate a total of 19 aircraft in the 2024 summer flight schedule. Malta Air has recently also stationed two Boeing 737-Max-200s in Vienna. Those responsible assume that there will be around seven million passengers this year. In direct comparison with the same period last year, this would correspond to growth of 15 percent. The current market share is put at 20 percent.

During a press conference, Ryanair CEO Michael O'Leary again criticized Austrian Airlines, which was described as “state-subsidized”. Among other things, the competitor is accused of having ticket prices that are up to 500 percent higher than those of Ryanair. On the number of passengers transported from Vienna: In 2023 there were six million passengers. In the last year before the corona pandemic there were 2,7 million travelers. This corresponds to an increase of 125 percent. For comparison: Austrian Airlines had 13,8 million passengers on board last year. The Lufthansa subsidiary was able to increase by one percent in a direct comparison.

“While Ryanair continues to expand low-fare traffic and add exciting new destinations such as Olbia, Rijeka, Split and Tirana, the state-subsidized AUA, owned by Lufthansa, has not achieved any significant growth since 2019 - just one percent “, says Michael O'Leary. Frequencies are being increased on some routes, including Madrid, Palma de Mallorca and Barcelona. In total, there will be frequency increases on 20 routes.

Boeing 737-Max-10 are expected to stimulate growth

There are currently around 600 aircraft in use for the Ryanair Group. The group expects to take delivery of 2034 additional machines by 400. Laudamotion managing director Andreas Gruber sees great growth potential in the area of ​​better networking of airports that are already served by Ryanair. There are currently bases at 95 airports where aircraft are stationed. A competitive advantage is seen as having lower costs compared to other carriers.

The Boeing 737-Max-200, which is currently being delivered, will initially be the growth drivers. The ordered Boeing 737-Max-10 will then also be brought into the fleet. According to the current state of things, the Airbus A320s currently operated by Lauda Europe are to be phased out gradually over the course of the current decade. The Ryanair Group expects additional growth opportunities, particularly from the addition of the Max-10, which is currently not yet certified by the FAA and EASA.

Lower fees required

In the wake of the corona pandemic, Ryanair managed to strengthen its presence in markets such as Italy, Spain and Poland. In Italy they consider themselves to be market leaders. What is new is that domestic flights within Morocco will soon begin due to a special permit. With regard to Vienna, Laudamotion managing director Andreas Gruber reminds us that before the corona pandemic, other low-cost airlines had announced that they would grow to 20 aircraft, but in fact only Ryanair would have grown to this size.

The growth planned for the summer of 2024 could be negatively affected due to the problems that the aircraft manufacturer Boeing is currently experiencing. In this regard, we would be in close contact with Boeing. In this regard, Andreas Gruber points out that operators of Airbus A320neo series models would also be affected by problems, albeit different ones. Lufthansa, Wizz Air and other providers would have to keep parts of their neo-fleets on the ground over the summer of 2024 due to necessary maintenance work. For the Wizz Air base in Vienna, this would mean that it would be reduced from six to five Airbus A321neo.

Andreas Gruber criticizes the fees charged by Vienna-Schwechat Airport. These would be too high and he repeated the already known demand that the airport should reduce them in order to be able to reach pre-crisis volumes again. Most recently, Vienna-Schwechat Airport had reached around 93 percent of the value of the record year 2019. "We came to stay. We want to become Austria’s number one,” says Andreas Gruber. “Lower fees would help generate additional passenger traffic. Vienna Airport would benefit greatly from this.”

“The costs are too high. “It’s very simple,” said Michael O’Leary. “Vienna is among the top 10 most expensive airports we fly from. We don't expect Vienna Airport to completely eliminate the fees. All we ask is that these be adjusted to a more competitive level. Other airports, such as Trieste, have taken this step and we are growing there. We are demanding a reduction in fees not only for us, but for all carriers that fly from Vienna. When we started in Vienna in 2018, there was a five-year incentive program that expired without replacement. It was brought into being after the bankruptcies of Air Berlin and Niki, because traffic really collapsed back then.”

From Michael O'Leary's perspective, Vienna will remain the most important airport in Austria for future growth. Klagenfurt, Salzburg and other Austrian airports would be comparatively small. However, the manager makes the speed of expansion dependent on the level of fees at Vienna-Schwechat Airport. “If Vienna wants to grow, then a new incentive program that encourages airlines to take up new routes must be launched,” said Michael O'Leary, slightly evading the fleet size planned for the next few years at Austria's largest airport. When asked how profitable Vienna is currently, he replied that Vienna is currently less profitable than other airports in the route network, but that would be due to growth. But you wouldn't incur losses, you would incur profits.

O'Leary expects tickets to be ten percent more expensive

For the summer of 2024, Michael O'Leary expects that average ticket prices for European airlines will rise by around ten percent on average. He attributes this to the fact that the capacity of many providers has been reduced due to the failure of numerous A320neo series aircraft. There could also be adjustments at Ryanair, because at the moment it doesn't look like they can take over the 75 additional Boeing 737-Max-200s because the manufacturer is in arrears. The combination of all factors would mean that the supply of European airlines could possibly be lower than demand, so that price increases of around ten percent could be expected. “If Ryanair increases prices by ten percent, everyone else will quickly follow suit. They’re just increasing it even faster and further than we are,” said O’Leary.

The Lessors have repeatedly contacted Ryanair as to whether the Airbus A320 currently flying for Lauda Europe could be returned earlier. This would be rejected by Michael O'Leary, pointing out that the aircraft would be needed. He jokingly said that the Lessors might be able to store the machines elsewhere for twice the leasing price. “Every few years there is some kind of crisis in aviation. We are waiting for this and hope that we can then purchase numerous Airbus A320neo for Lauda Europe at a reasonable price. I think that the Lauda Europe fleet will grow to 50 to 60 machines in the long term. “Lauda is a very strong brand in Austria,” explains Michael O’Leary.

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