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Ryanair is Europe's largest airline, the largest low-cost carrier, and one of the world's largest airlines as measured by international passengers carried. Ryanair's largest hub is at London Stansted Airport, with its second largest base at Dublin Airport. The carrier operates a comprehensive network of services across Europe, the Mediterranean and North Africa with a fleet of over 300 B737-800 aircraft.
Location of Ryanair main hub (London Stansted Airport)
Ryanair share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Ryanair fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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Eastern/Central Europe offers significant opportunities to LCCs. The region's faster-growing, lower-wage economies are relatively under-penetrated by the low cost model, and by air travel in general, compared with Western Europe. Furthermore, outside Russia, Turkey and Greece, the region contains very few sizeable legacy airlines and even fewer in strong financial health.
Wizz Air and Ryanair, already established as the two leading airlines in Eastern/Central Europe (ex Russia, Turkey and Greece), look well placed to build further here. According to OAG data for the week of 13-Jul-2015, number one ranked Wizz Air is growing seat capacity by 25% year on year, while number two Ryanair's seat numbers in Eastern/Central Europe are up 22% from their level a year ago.
Wizz Air's recent aircraft order demonstrates its resolve to stay in pole position. However, breaking the region into its component markets, Ryanair often comes out ahead of Wizz Air in countries where they both compete. Whichever one of Europe's two lowest unit cost airlines can win the fight for cost leadership will likely be the long term winner in Eastern/Central Europe.
The Italian market continues in a state of flux. It looks like 2015 will join 2014 as a growth year, following contraction in 2012 and 2013. Alitalia has stabilised its total seat capacity after years of decline, but continues to lose market share to fast-growing rivals. Europe's three biggest LCCs - Ryanair, easyJet and Vueling - are pursuing what seems like relentless expansion across Italy, but Wizz Air is also building a presence.
Furthermore, the leading airlines in Italy continue to jostle for places in difference parts of the market. This is illustrated by easyJet's recent decision to close its Rome Fiumicino base from Apr-2016 and to redeploy aircraft through the expansion of bases at Milan Malpensa and Naples and at a new base at Venice Marco Polo.
Ryanair overtook Alitalia as the biggest airline in Italy by seats in 2013 and offers far more destinations. As it continues to improve customer service quality and to increase the proportion of primary airports in its pan-European network, Ryanair's position as market leader in Italy and the lowest cost producer in Europe will make it hard to beat.
At the Paris Airshow, Wizz Air signed a MoU with Airbus for the purchase of 110 Airbus A321neo aircraft, with deliveries to start in 2019, and uncommitted purchase rights over an additional 90 A321neo aircraft. The order is subject to a final purchase agreement and approval by the shareholders of Wizz Air, which listed on the London Stock Exchange earlier this year.
Such approval is typically forthcoming and the new aircraft should provide significant unit cost improvements. Nevertheless, Wizz Air's order is very large compared with its size today and follows large orders for narrow body aircraft in recent years for other leading European LCCs, including Ryanair, easyJet, Norwegian and Vueling (the latter as part of an IAG group order).
Norwegian has admitted that it may not be able to use all of its planned aircraft and Wizz Air's order now provides an opportunity to review the data on the number, and types, of narrow bodies on order in Europe. Narrowbody deliveries to Europe look set to rise, at a time of rising global deliveries. Success is not guaranteed for all. Meanwhile the expanding role of LCCs in both leisure and business markets continues to undermine the positions of legacy airlines on short haul routes.
Barcelona El Prat: Europe's leading airport for LCCs a battleground in fight for business travellers
easyJet's recent announcement that it plans to open a new base at Barcelona El Prat Airport from Feb-2016 provides an opportunity to examine the recent traffic history of Europe's leading LCC airport. Barcelona is home to IAG subsidiary Vueling, the biggest operator at the airport and Europe's third largest LCC. Vueling's nearest competitors here are Ryanair and easyJet, ranked first and second among European LCCs.
The narrative at Barcelona remains substantially about short and medium haul and the main protagonists continue to be Europe's leading LCCs. However, there is an emerging sub-plot, albeit one that remains in the background for now. This concerns the global super-connectors, who aim to turn Barcelona's paucity of long haul destinations to their advantage.
Traffic growth at Barcelona was strong before the global financial crisis, but slumped in 2008 and 2009. It bounced back quickly in 2010 and 2011, before the demise of Spanair interrupted the resumption of rapid growth. After various twists and turns in the traffic growth path of the three leading airlines at Barcelona, all three now look ready to battle hard, particularly for business passengers.
Aviation in Europe has a PR problem, which is not helped by the fragmentation of industry representation. Efforts to consolidate representation have so far not yielded material results. Europe's five largest airlines are now attempting to seek common ground, prompted by the European Commission's consultation on a new aviation policy. However, they are avoiding obvious sticking points such as protectionism with regard to competition from Gulf-based airlines. By contrast, airport representation is unified in ACI Europe, which has also responded to the Commission with a liberal set of policy proposals.
Recent changes in the membership of Europe's main airline representative bodies have seen ELFAA become its biggest airline association, measured by its members' passenger numbers, ending the previous hegemony of AEA. IAG's legacy airlines defected from AEA to ELFAA due to differences of opinion over market liberalisation.
There has never been a greater need for a single voice on issues such as taxation and the infrastructure provision (both on the ground and in the air). Aviation needs to argue its case and more effectively promote its benefits to the public.
In terms of markets, IAG's bid for Aer Lingus is based on the Irish airline's growing North Atlantic network, its superior links to the UK regions and, to a lesser degree, its continental European presence. In addition to the discussion of Aer Lingus itself, the bid has thrown the spotlight on the strategic merits of Dublin Airport and the competitive battles between contrasting airline models.
Ireland and its largest airport, Dublin, have long punched above their weight in aviation terms. Ireland is in the world's top 40 aviation nations ranked by airline seats, but is not even in the top 160 by population. Dublin is only Europe's 25th largest airport but it is home to its largest airline, Ryanair, by passenger numbers.
Between them, Aer Lingus and Ryanair - a low cost/legacy hybrid and one of the purest LCCs around - dominate Dublin, whereas the big European legacy airline groups have small market shares and the branded alliances are currently almost non-existent. The airline mix at Dublin is rounded out by regional airlines CityJet and Flybe, in addition to fast-growing global super-connectors Emirates, Etihad and Turkish Airlines.