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No hamburgers or frankfurters, but Ryanair will be serving Germany more

2-May-2013

Germany is Europe’s number two aviation market (after the UK) by seats. However, although Ryanair is Germany’s third largest carrier, its share of seats there is only about 6%. It has a 14% share of capacity across all its markets and a significantly higher share in other major countries such as Italy, Spain and the UK. This under-representation in Germany may be about to change.

Although high charges at the main hubs and a well-organised main competitor have hindered Ryanair’s growth in Germany, it has shown at bases such as Duesseldorf Weeze and Frankfurt Hahn that it can build a dominant position.

Now, just as that competitor is focusing inwardly on its own restructuring, Ryanair is opening 47 routes from Germany in 2013, including three new airports. Looking further ahead, it has declared that it is in talks with 20 German airports with a view to adding five or six to its route network. We assess Ryanair’s current position and prospects in Germany, including consideration of which airports might attract it.

Ryanair is number three airline in Germany

Ryanair is the number three airline in Germany, measured by total system seats for the week commencing 29-Apr-2013, behind Lufthansa and airberlin, with a share of about 6%. As Ryanair does not compete in long-haul markets, it may be more meaningful to look at its share of seats between Europe and Germany, which is about 7%.

Ryanair is not present in the German domestic market and its share of international seats between Europe and Germany is about 8%. Whichever way we look at it, Ryanair is the biggest foreign carrier and the biggest low-cost carrier in Germany.

Top 20 Airlines in Germany ranked by seats: 29-Apr-2013 to 5-May-2013

Rank

Airline

 

Total Seats

 % of total

1

LH

Lufthansa

1,822,918

39.6%

2

AB

airberlin

600,538

13.0%

3

FR

Ryanair*

264,222

5.7%

4

4U

Germanwings

224,784

4.9%

5

U2

easyJet*

141,648

3.1%

6

DE

Condor Flugdienst

127,551

2.8%

7

X3

TUIfly

87,507

1.9%

8

TK

Turkish Airlines*

79,645

1.7%

9

AF

Air France*

73,854

1.6%

10

BA

British Airways*

71,722

1.6%

11

KL

KLM Royal Dutch Airlines*

63,236

1.4%

12

LX

SWISS*

52,978

1.1%

13

UA

United Airlines*

51,344

1.1%

14

EK

Emirates*

47,888

1.0%

15

OS

Austrian Airlines*

46,312

1.0%

16

XQ

SunExpress*

45,012

1.0%

17

SK

SAS*

44,968

1.0%

18

SU

Aeroflot*

33,716

0.7%

19

VY

Vueling Airlines*

29,592

0.6%

20

W6

Wizz Air*

28,800

0.6%

But it is weaker in Germany than elsewhere in Europe

Although Ryanair is an important player in Germany, it is under-represented there in terms of seat capacity compared with other major European countries. It is Ryanair’s fourth most important country by the number of seats it has there, but it is Europe’s second most important country by total number of airline seats.

Number of Ryanair seats by country: 29-Apr-2013 to 5-May-2013

Total number of airline seats in European countries where Ryanair is present: 29-Apr-2013 to 5-May-2013

As a result, Ryanair’s roughly 6% share of seats in Germany is significantly lower than its share in other major European countries such as Spain and Italy, where its share is about 22% in both countries, and the UK, where it has about 16%. Its average share of seats across all its markets is about 14%.

High airport charges have kept it out of the primary hubs in Germany, such as Frankfurt and Munich. Ryanair has also faced better organised and more decentralised opposition from the main incumbent, Lufthansa and its subsidiaries, than in Spain, Italy or the UK.

Ryanair share of seats by country: 29-Apr-2013 to 5-May-2013

Ryanair is also under-represented in France, but that will have to be the subject of a separate report. It is also interesting to note Ryanair’s strong share of about 32% in Poland, which is one of Europe’s most populous nations, but not yet one of its biggest aviation markets. Ryanair’s presence there should assure it of healthy growth as Poland catches up with Western Europe’s rates of propensity to travel by air over time.

German airports do not feature in any of Ryanair’s top 10 routes or hubs. Germany is also the only one of the major Western European countries where Ryanair has no domestic routes.

Ryanair top 10 international routes by seats: 29-Apr-2013 to 5-May-2013

Ryanair top 10 hubs/bases/stations by seats: 29-Apr-2013 to 5-May-2013

Ryanair operates from 13 airports in Germany

Ryanair has four bases in Germany – meaning that it bases aircraft and crew there – and also operates to nine other destinations. It has a strong market share at its four bases and also at Memmingen and Hamburg Luebeck.

Ryanair’s airports in Germany ranked by number of Ryanair seats: 29-Apr-2013 to 5-May-2013

Airport

Total airport Seats

Ryanair seats

Ryanair share

Ryanair  

base?

Duesseldorf Weeze

75,222

75,222

100.0%

Yes

Frankfurt Hahn

76,248

74,088

97.2%

Yes

Bremen

65,092

26,082

40.1%

Yes

Karlsruhe/Baden-Baden

27,708

19,278

69.6%

Yes

Memmingen Allgaeu

24,258

19,278

79.5%

No

Berlin Schoenefeld

155,312

10,584

6.8%

No

Hamburg Luebeck-Blankensee

11,232

9,072

80.8%

No

Cologne/Bonn  

215,275

8,694

4.0%

No

Nuremberg

84,189

7,560

9.0%

No

Dortmund

50,688

6,804

13.4%

No

Leipzig/Halle  

47,535

6,048

12.7%

No

Muenster/Osnabrueck Muenster

18,908

1,890

10.0%

No

Magdeburg Cochstedt

1,512

1,512

100.0%

No

Ryanair’s two most important airports by number of seats (week of 29-Apr-2013) are Duesseldorf Weeze and Frankfurt Hahn, where it accounts for virtually all passenger traffic. It has been operating to Frankfurt Hahn Airport for the past 14 years, since launching operations to the airport on 22-Apr-1999. Since then, it has handled nearly 34 million passengers at the airport, with over two million in 2012. The carrier’s website offers 54 international routes from the airport in summer 2013.

Ryanair recently celebrated its 10th anniversary of operations at Duesseldorf Weeze and now has nine aircraft based there. It launched with a service from London Stansted on 1-May-2003 and now offers 58 destinations from the airport, according to its website.

Ryanair likes to dominate the markets in which it operates and exerts a strong influence over its airports. Of its 13 German airports, it is the number one player in seven and top three in 11. Its weakest market share at an airport where it is nevertheless number one is the 40% it has at Bremen. Here Lufthansa and Germanwings have a combined share of almost 36%, close to Ryanair’s share, and it will be interesting to see how the new Germanwings competes as it assumes Lufthansa routes.

Ryanair CEO Michael O’Leary has predicted that Lufthansa’s low-cost division Germanwings was “doomed to fail”, calling it “absolute rubbish” and stating that it is not an LCC given the price of fares (AustrianAviation.net, 13-Apr-2013). He also noted previous examples of failures in the European market of so-called low-cost subsidiaries of network carriers, saying they are generally too expensive compared to ‘true’ LCCs. He said Germanwings would likely be a “so-called budget airline with the famous Lufthansa high-cost structure”.

See related report: Germanwings rebrands: you say you want a revolution? To be led by cost and operations

Ryanair’s only German airports where it is outside the top three are Cologne Bonn and Leipzig Halle. At Cologne Bonn, which is dominated by Lufthansa/Germanwings, Ryanair is fourth with only about a 4% share of seats, but its focus there is on only five southern sun destinations in Spain and Portugal, where Ryanair’s low fares are likely to be a key consumer purchase criterion. Germanwings operates to a far higher number of destinations across Europe.

At Leipzig Halle, Ryanair is fifth, with a share of about 13% and only six routes, again mainly leisure-focused (Faro, Malaga, Pisa, Rome, Trapani and London Stansted).

Dortmund, where Ryanair is third with about a 13% share, has become the main LCC airport in Germany, with Wizz Air, Germanwings, easyJet and Vueling also present. Ryanair offers only seven routes there.

Ryanair destinations in Germany and competitor share of seats: 29-Apr-2013 to 5-May-2013

 

 

Share of   seats for leading airlines at each airport

Airport

Ryanair
routes available for booking
May-2013

1

2

3

4

5

Berlin Schoenefeld

6

easyJet 63.5%

Norwegian 7.4%

Ryanair 6.8%

   

Bremen

26

Ryanair 40.1%

Lufthansa 28.1%

Germanwings 7.5%

   

Cologne-Bonn

5

Germanwings 47.0%

airberlin 17.9%

Lufthansa 12.0%

Ryanair 4.0%

 

Dortmund

7

Wizz Air* 47.6%

Germanwings 14.8%

Ryanair 13.4%

airberlin 11.0%

easyJet 8.0% Vueling 2.8%

Duesseldorf Weeze

58

Ryanair 100%**

       

Frankfurt Hahn

55

Ryanair 97.2%

Wizz Air 2.8%

     

Hamburg-Luebeck

7

Ryanair 80.8%

Wizz Air* 19.2%

     

KarlsruheBaden-Baden

18

Ryanair 69.6%

airberlin 2.5%

InterSky 8.0%

   

LeipzigHalle

6

Lufthansa 27.6%

airberlin 23.7%

Condor 13.7%

Germanwings 13.3%

Ryanair 12.7%

Magdeburg Cochstedt

2

Ryanair 100%

       

Memmingen

18

Ryanair 79.5%

Wiz Air* 16.3%

airberlin 1.5%

   

Muenster

2***

airberlin 44.2%

Lufthansa 42.7%

Ryanair 10.0%

Air France 3.1%

 

Nuremberg

6

airberlin 41.3%

Lufthansa 20.0%****

Ryanair 9.0%

   

47 new routes in Germany in 2013

Mr O’Leary has said the carrier will expand in Germany (Frankfurter Allgemeine Zeitung, 24-Apr-2013). Ryanair is launching 47 new routes from German airports over the course of 2013. These will include 10 new routes from its largest base, Duesseldorf Weeze, and 15 from airports that are new to Ryanair this year (seven from Dortmund, six from Nuremberg and two from Muenster).

Ryanair says it has seen record bookings from its two new connections from Muenster to Barcelona and Malaga in summer 2013. The carrier said it expects to handle around 80,000 annual passengers from the airport. Most of the new routes that have been announced are summer launches, but Ryanair will also start two new German routes for the winter 2013-2014 schedule (to Tenerife South from Cologne Bonn and Memmingen).

These 47 new routes represent around one third of all new air routes in Germany in 2013 and bring Ryanair’s total number of routes offered to/from Germany to 216, an increase of 24% from last year. This is much faster growth than the roughly 3% passenger growth the company expects for the financial year to Mar-2014. This suggests that Ryanair’s relatively low share in Germany should move upwards.

Ryanair new routes from Germany in 2013

From

To

Weekly frequency

Route launch

Cologne-Bonn

Faro

4x

31-Mar-2013

 

Malaga

4x

31-Mar-2013

 

Tenerife South

2x

31-Oct-2013

Bremen

Chania

1x

03-Apr-2013

 

Dublin

3x

18-Sep-2013

 

Reus

2x

02-Apr-2013

 

Rome Ciampino

2x

02-Apr-2013

 

Thessaloniki

1x

01-Apr-2013

Dortmund

Alghero

2x

23-Mar-2013

 

Girona

2x

Mar-2013

 

Faro

2x

Mar-2013

 

Krakow

4x

03-Apr-2013

 

Malaga

3x

Mar-2013

 

PalmaMallorca

3x

11-Mar-2013

 

Porto

2x

Mar-2013

Duesseldorf Weeze

Bergerac

2x

unknown

 

Corfu

2x

21-Mar-2013

 

Oslo Rygge

3x

unknown

 

Oujda

2x

31-Mar-2013

 

Paphos

1x

02-Apr-2013

 

Rijeka

2x

01-Apr-2013

 

Santander

3x

11-Jun-2013

 

Tangier

2x

01-Apr-2013

 

Vilnius

2x

unknown

 

Warsaw Modlin

4x

04-Sep-2013

Frankfurt Hahn

Corfu

1x

02-Apr-2013

 

Rijeka

2x

02-Apr-2013

 

Tangier

2x

02-Apr-2013

 

Warsaw Modlin

3x

04-Sep-2013

KarlsruheBaden-Baden

Marrakesh

2x

26-Apr-2013

Hamburg Luebeck

Girona

3x

02-Apr-2013

 

Porto

3x

02-Apr-2013

 

Trapani

2x

31-Mar-2013

Lepzig Halle

Faro

2x

02-Apr-2013

 

Pisa

2x

01-Apr-2013

Memmingen

Chania

2x

26-Apr-2013

 

Girona

5x

31-Mar-2013

 

Marrakesh

2x

24-Apr-2013

 

Tenerife South

2x

01-Nov-2013

Muenster

Girona

3x

05-Jun-2013

 

Malaga

3x

04-Jun-2013

Nuremberg

Alicante

3x

02-Apr-2013

 

Cagliari

2x

03-Apr-2013

 

London Stansted

7x

01-Apr-2013

 

Malaga

3x

02-Apr-2013

 

Pisa

3x

02-Apr-2013

 

Porto

2x

02-Apr-2013

'We want to service five or six more airports in Germany'

Turning his thoughts to further expansion, Mr O’Leary told the Frankfurter Allgemeine Zeitung (24-Apr-2013): “We want to service five or six more airports in Germany” and that Ryanair was in talks with some 20 German airports at present. He expects LCCs will continue to gain market share from full service carriers.

On full service operators in the intra-European market, he said: “They’ll have no choice but to scale back in the next three to four years because we will expand and take over markets.” He labelled Germany’s Berlin Brandenburg International Airport “a disaster” and said Ryanair would likely not fly to the German capital anymore in future, citing high airport charges.

At which German airports might we expect to see Ryanair operate in future? The table below lists the top 30 airports in Germany by seats for the week of 29-Apr-2013. With 17 of them not currently having the pleasure of hosting Ryanair, the opportunities for the Irish carrier are apparent.

That said, it is unlikely that Ryanair will move into any of the top six airports in Germany – they are either too expensive and/or Ryanair already operates to alternative airports. Germany remains a market where the ‘classic’ Ryanair approach remains alive and well – move into and dominate the secondary and tertiary airports, while giving primary airports a wide berth.

Geography might influence Ryanair’s choice of airports

Map of Ryanair destinations in Germany summer 2013

Geographically, Ryanair is fairly absent from large parts of central Germany. Looking down the list of airports in the table below, and excluding the top six, the first airport where Ryanair is not present is Hannover. This is situated in central northern Germany and, apart from Bremen, it is not very close to any other Ryanair airport.

Paderborn/Lippstadt is possibly too close to both Muenster and Dortmund, but Kassel Calden, just a little further east, is nicely located between Ryanair’s airports in the west and Leipzig Halle in the east. Erfut, in central Germany, looks to be similarly well placed between existing Ryanair destinations and Dresden could be a suitable station in the far east of Germany, especially if Ryanair’s interest in Berlin is cooling.

Saarbrucken and Saarbruecken Zweibruecken may both be too close to Frankfurt Hahn and Karlsruhe Baden-Baden, while Friedrichshafen, although quite near to Memmingen, could be of interest to Ryanair due to its proximity to the border with Switzerland, which Ryanair does not serve.

Westerland Sylt, in the far north and near the Danish border, is evenly spaced between Ryanair’s destinations of Luebeck and Billund in Denmark. Currently a purely domestic airport and served mainly by regional aircraft, but also with a Boeing 737-800 service from airberlin, it would be capable of taking Ryanair’s Boeings. Heringsdorf may be too close to Luebeck, but Rostock Laage could be a useful addition for Ryanair in the northeast of Germany.

Brunswick Airport (Braunschweig in German) is not in the list below as it is not currently open to scheduled traffic and has not made public any plans to do so. However, it is reported now to have a 2,300m runway and is located in central northern Germany between Ryanair’s existing destinations of Magdeburg and Bremen. If it were to be interested in commercial aviation, it is just the kind of airport where Ryanair could enjoy a first mover advantage and no competition (and there are likely to be others like it).

German airports with scheduled services ranked by weekly seats 29-Apr-2013 to 5-May-2013              

  

Rank

  
  

Airport

  
  

Total   
Seats

  
  

Ryanair   
seats

  
  

Ryanair   
share of
seats

  

1

FRA

Frankfurt

1,493,606

0

0.0%

2

MUC

Munich

1,031,426

0

0.0%

3

DUS

Düsseldorf   International

532,733

0

0.0%

4

TXL

Berlin Tegel

487,509

0

0.0%

5

HAM

Hamburg

345,764

0

0.0%

6

STR

Stuttgart

235,514

0

0.0%

7

CGN

Cologne/Bonn

215,275

8,694

4.0%

8

SXF

Berlin   Schoenefeld

155,312

10,584

6.8%

9

HAJ

Hannover

129,469

0

0.0%

10

NUE

Nuremberg

84,189

7,560

9.0%

11

HHN

Frankfurt Hahn

76,248

74,088

97.2%

12

NRN

Duesseldorf Weeze

75,222

75,222

100.0%

13

BRE

Bremen

65,092

26,082

40.1%

14

DTM

Dortmund

50,688

6,804

13.4%

15

LEJ

Leipzig/Halle

47,535

6,048

12.7%

16

DRS

Dresden

41,206

0

0.0%

17

FKB

Karlsruhe/Baden-Baden

27,708

19,278

69.6%

18

FMM

Memmingen Allgaeu

24,258

19,278

79.5%

19

FMO

Muenster/Osnabrueck Muenster *

18,908

1,890

10.0%

20

PAD

Paderborn/Lippstadt Paderborn

18,128

0

0.0%

21

SCN

Saarbruecken

14,388

0

0.0%

22

FDH

Friedrichshafen

12,446

0

0.0%

23

LBC

Hamburg Luebeck-Blankensee

11,232

9,072

80.8%

24

GWT

Westerland Sylt

6,366

0

0.0%

25

ZQW

Saarbruecken Zweibruecken

3,738

0

0.0%

26

RLG

Rostock Laage

2,574

0

0.0%

27

ERF

Erfurt

1,708

0

0.0%

28

CSO

Magdeburg Cochstedt

1,512

1,512

100.0%

29

HDF

Heringsdorf

772

0

0.0%

30

KSF

Kassel Calden

152

0

0.0%

Cost will be the main factor for Ryanair

Based on the above thoughts, Hannover, Kassel Calden, Erfut, Dresden, Friedrichshafen, Westerland Sylt, Rostock Laage and Brunswick could all feature on Ryanair’s list of possible new airports in Germany. However, while such geographical considerations may come into Ryanair’s thinking, it is most likely that decisions about new airport for its network will be based on the factor that drives every one of its decisions: cost.

If an airport can make Ryanair an attractive offer that will keep its cost base lower than any other airline in Europe, then Ryanair will be interested. This could include airports that are not currently serviced by commercial traffic. With passenger growth planned in the low single digits this year and aircraft deliveries on hold until the new Boeing order kicks in, leading to likely competition for its business, Ryanair is in a strong position to choose where to go.

See related reports:


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