Ryanair's next step to becoming a network airline: Air Europa long haul feed & Rome transfer product


On 23-May-2017 Ryanair and Air Europa announced a new commercial partnership allowing Ryanair customers to book Air Europa long haul flights through Ryanair's website. The agreement paves the way to a second stage, when Ryanair passengers will be able to book connecting flights from Madrid to Air Europa's 20 long haul destinations in the Americas.

Ryanair had long been in talks with other possible long haul partners about providing long haul feed to them under interlining arrangements. Talks with Aer Lingus and Norwegian on these lines are continuing, but the Air Europa agreement gives it an opportunity to gain practical experience of what will be another new feature of its continuously evolving business model.

This announcement came only a week after Ryanair launched a connections booking service at Rome Fiumicino. Ryanair is not the first European LCC to connect with other airlines or with itself. However, Europe's biggest airline group by passenger numbers is the only airline to offer these features while retaining an ultra low cost base.

Air Europa, much smaller than Ryanair, has paused in its growth

The arrangement significantly raises Air Europa's profile among European travellers, since its long haul routes will now be visible to Ryanair customers. In 2016 Ryanair carried 117 million passengers, compared with Air Europa's total of around 10 million.

This put Air Europa in 17th position among Europe's leading airline groups by passengers carried in 2016; a list that Ryanair topped.

See related report: Ryanair's 117million pax in 2016 tops European airline groups. The first time an LCC topped rankings

The Irish LCC expects to carry 130 million in the year to Mar-2018, and 200 million in the year to Mar-2024.

By contrast with Ryanair's continued growth, Air Europa has paused in its expansion of recent years. After growing passenger numbers by 26% from 2012 to 2015, it had growth of only 2% in 2016.

According to data from OAG on scheduled capacity, Air Europa will maintain seat numbers in the first 46 weeks of 2016 at last year's level.

Air Europa weekly seat capacity 2014 to 2017*

Air Europa at Madrid: 20 long haul routes to 16 countries

Air Europa operates 20 long haul routes from Madrid to 16 countries in the Americas (see table below).

Air Europa long haul routes from Madrid


Buenos Aires


Santa Cruz



São Paulo





Dominican Republic

Punta Cana

Santo Domingo




San Pedro Sula


Tel Aviv







Puerto Rico

San Juan






New York (JFK)



According to OAG, the Americas account for 44% of Air Europa's seats and 83% of its international ASKs in the week of 22-May-2017. Latin America accounts for 67% of its international ASKs.

Air Europa's European network is relatively small, accounting for only 16% of its international ASKs and just 12 destinations (the week of 22-May-2017; source: OAG). Its domestic network of 22 destinations accounts for only 16% of its total ASKs.

By contrast, Ryanair has 53 destinations across Europe from Madrid alone.

Air Europa Lineas Aereas international departing ASKs by region, week of 22-May-2016

The partnership will deepen

The initial part of the agreement between the two airlines simply allows bookings for Air Europa long haul flights from Ryanair's website. A second phase, to be launched later this year, will allow Ryanair customers to connect through Madrid onto Air Europa's long haul network on a single ticket, with luggage checked all the way through.

Future plans also include the ability for Ryanair customers to book flights on Air Europa's domestic and European short/medium haul network, where the destinations are not already covered by Ryanair. The deal will effectively double Air Europa's connectivity in Europe by adding a further 53 cities on Ryanair's network to/from Madrid.

However, although the partnership will deepen from its first phase, there are limits. Ryanair has consistently said in the past that it has no interest in signing codeshare agreements or in making schedule changes to accommodate partner connections. These features are unlikely to operate in its relationship with Air Europa (or with other partners).

Air Europa is re-equipping its fleet

Air Europa's fleet of 47 aircraft compares with Ryanair's 397 at 22-May-2017, according to the CAPA Fleet Database.

On its long haul network Air Europa has seven Boeing 787-8 Dreamliner aircraft (one more than the six noted in Air Europa's press release, the airline having taking delivery of an additional aircraft in May-2017 that has yet to operate its first commercial flight).

It has one more 787-8 on order, due for delivery in Jun-2017, and 14 of the 787-9 variant ordered for delivery in 2019 to 2021. Its widebody fleet in service also includes 12 Airbus A330 aircraft, consisting of 10 A330-200s and two A330-300Es.

Its narrowbody fleet comprises 18 Boeing 737-800s, the same aircraft that Ryanair flies, but with 180 seats in a configuration of 168 economy seats and 12 in business class, versus Ryanair's 189 all economy configuration. Air Europa has six more 737-800s due to be delivered by Apr-2018 and has also ordered 20 737MAX-8 aircraft, due in 2021-2022 (Ryanair has 100 MAX-8s due for delivery from 2019 to 2024).

In addition, Air Europa has a 10 strong regional aircraft fleet, with eight Embraer E195s, one E145 and one ATR 72.

Air Europa's average fleet age is 8.0 years - fairly competitive, but a little older than Ryanair's 6.5 years, although its average is pushed up by its regional fleet. The A330 fleet averages 10.4 years, the 737 fleet 7.8 years, and the 787 fleet just 0.7 years.

The 787 and 737 delivery programme will bring Air Europa's average fleet age down further. Javier Hidalgo, CEO of Air Europa's parent company Globalia Group, expects the airline to have "the most modern and efficient fleet of the market" operating between Europe and the Americas in 2020.

Air Europa average fleet age for aircraft in service at 22-May-2017

Ryanair has talked to other potential long haul partners

Ryanair's new partnership with Air Europa marks another development in the evolution of its business model under its 'Always Getting Better' programme.

Ryanair has been, for some time, in discussions with a number of long haul airlines on possible interline agreements and other feed related partnerships.

In Apr-2016 2016 Ryanair reached an agreement "in principle" to feed LCC Norwegian's long haul routes from London Gatwick, but work was still needed to align their booking systems. Norwegian CEO Bjørn Kjos has said that he hopes to have an interline agreement in place with Ryanair before the end of 2017.

See related report: Norwegian Air, Ryanair talk bilateral interline. A good match but Kjos' alliance case less clear

Ryanair had previously, reportedly, also been in talks with a number of FSC long haul operators, such as British Airways, Aer Lingus, Virgin Atlantic and TAP Portugal, about providing feeder traffic. Of these, the most likely to come to fruition was thought to be Aer Lingus at Dublin, where the IAG subsidiary and the LCC are the two biggest airlines.

Air Europa is the leading Spanish rival to the IAG subsidiary Iberia's long haul network, but Ryanair's new deal does not preclude it from continuing to seek a similar agreement with Aer Lingus.

Indeed, Ryanair said on 17-May-2017 that talks about long haul connections with both Aer Lingus and Norwegian, in addition to other long haul airlines, were continuing.

Both airlines should gain from the agreement

One of the key stumbling blocks that must be overcome in any such agreement is the issue of who takes responsibility for missed connections and baggage transfer. Ryanair tends to play hard ball on such issues, and is unlikely to have reached an agreement with Air Europa other than on its own terms.

The choice of Air Europa as Ryanair's first long haul partner probably reflects pragmatism as much as any grand strategic vision for its feeder ambitions. Discussions with other potential partners have not yet come to fruition, and Air Europa gives it the opportunity to gain practical experience in this area with a relatively small airline.

In addition, there is a high level of complementarity between Ryanair's Madrid network and that of Air Europa, which gives both an immediate gain and may have eased the negotiations. Presumably, too, there were no significant IT related obstacles.

From Air Europa's point of view, in a very competitive market where it risks being somewhat squeezed between larger FSCs and the large number of LCCs present in Spain, the lure of a deal with Europe's largest airline may have been too tempting to resist.

See related report: Spain aviation and LCCs: 2016 traffic above pre-crisis levels, but capacity surplus unsustainable

More specifically, Ryanair is the number one airline in Spain, and its growth, as well as that of other LCCs, has been a threat to the vital short/medium haul feed into Air Europa's long haul network. Air Europa has an efficient cost base, but not as low as that of LCCs, and particularly those of ultra LCCs such as Ryanair.

See related reports:

Spain: airlines ranked by seats week of 22-May-2017

Globalia Group CEO Javier Hidalgo said that the "partnership with Ryanair gives us great satisfaction, and it puts us at the forefront of business and allows us to strengthen our competitiveness". He added that it consolidates Air Europa as "the best price-quality option to fly between Europe and America".

Ryanair CEO Michael O'Leary applauded the agreement as another step on Ryanair's journey to become the 'Amazon of travel'. This involves it harnessing the power of its website and the size of its potential market to sell an ever wider range of travel related products and services.

See related report: Ryanair: digital success raises ancillary target to 30% as it becomes the "Amazon of air travel"

Ryanair has also launched a connecting service at Rome FCO

Ryanair's first agreement with another airline over long haul feed follows another small step in the direction of operating in a manner a bit more like a network airline.

On 17-May-2017 it launched a connecting flight service via Rome Fiumicino. This allows passengers to book connections on an initial 10 routes to/from FCO, with one booking reference and checked baggage transfer included. In addition, passengers with such a booking will remain airside between flights.

Ryanair had previously considered offering connecting bookings at London Stansted and Barcelona. A rival LCC, the IAG owned Vueling, offers connecting tickets at its Barcelona hub and at Rome FCO.

See related reports:

Ryanair plans to add more connecting routes at Rome and, if the trial proves successful, to roll out similar service at other airports in its network.

Ryanair is increasingly mimicking FSCs, but with an ultra LCC cost base

Ryanair's 'Always Getting Better' programme has increased its presence at primary airports, has thoroughly overhauled its website, and stimulated an extensive digital strategy, while also distancing the airline from its previous hard nosed reputation for poor customer service.

It has also led to significant improvements in load factor and profitability - important measures of its success. This has all been achieved without compromising Ryanair's ultra low cost base.

If Ryanair can now successfully add flight connections, both onto other airlines' long haul networks and across its own network, legacy network airlines can only look on with envy.

Over time, the strategy of providing lower cost short haul spokes for long haul full service (and low cost) airlines has the potential to transform the shape of the industry. It also has pervasive implications for the erosion of brand value. This process can in some ways be seen as mere commodisation of the airline product.

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