Monday 21 May 2018

Paris attacks caused 'blip' in Ryanair demand

Airline hit slightly by fallout from the Paris attacks
Airline hit slightly by fallout from the Paris attacks
Gavin McLoughlin

Gavin McLoughlin

Ryanair saw a "blip" in demand after the Paris terrorist attacks, the airline's chief marketing officer, Kenny Jacobs, has said.

Mr Jacobs' comments echo remarks made by Ryanair's rival EasyJet on Tuesday, but Mr Jacobs said it was likely that EasyJet suffered a bigger impact because it does more business in France than Ryanair.

"I think we and everyone else saw that in the two weeks after it there was a blip in demand. I think it's just there was general anxiety across Europe about travelling...[but] it recovered before Christmas. In certain markets you can see across Europe, it has changed the dynamic."

Mr Jacobs was speaking at the launch of Ryanair's winter schedule for Dublin, which will see the airline add two new routes to Hamburg and Sofia. There will be five new winter services to Athens, Bologna, Murcia, Porto and Seville, and more flights to Bucharest and Gatwick.

Mr Jacobs defended the airline's fuel hedging strategy, which has come under criticism with oil prices hovering around their lowest in a decade.

The airline had locked 90pc of its fuel at $92 for the year to the end of March 31. For the following fiscal year it has locked 95pc of its fuel at $62, saying this will save €430m.

"We want certainty. Fuel is the biggest line on our P&L (profit and loss statement), so you want the certainty and that's what our investors want as well. Our model works better with that."

Ryanair aims to grow to 180 million passengers a year by 2024. In 2015 it carried just over 100 million. Mr Jacobs said projected growth would come from a range of European markets

"If you just take Germany, [Ryanair had] 5pc market share last year and eight million customers... in the course of that plan Germany could become 30 million, so Germany could be 20 million-plus of the extra 75 million.

"If Germany's a big chunk of it then you look at some of the markets around Germany. So we're about 6pc in the Netherlands, in Austria we're very small so if you just take that Germanic region that's a big chunk of it.

"If you take Scandinavia, we're still very happy to let Norwegian and SAS scrap it out in a price war for Scandinavia, so we're not really adding huge amounts of capacity in Scandinavia. Yes, we're going after more primary airports there but I think over the course of the plan between now and 2024, Scandinavia would be the second one I'd call out. That could be 15 million of the increase.

"And then again just calling out even Dublin, [an additional] 1.2 million passengers in the year coming, could we add that again next year? Yes, we probably could.

"And then let's call it central Europe, you have the Romanias, the Bulgarias. The economies there are still emerging, there's less travel.

"The average Irish customer might travel for us six times a year, but the average Romanian might travel once a year, so it's a smaller base where we have low market share, but I think in that whole region Ryanair will go with a lot of new capacity."

He said the idea of feeding passengers into long-haul carriers' services is still on Ryanair's agenda.

"Last September we would have said we were talking to several people, I think Norwegian came out and said they were talking to Ryanair, so you can assume that's the one that's most progressed.

"They seem to be more focused on doing long haul, we're saying that suits fine."

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