Ryanair’s German expansion hits a major hub
Ryanair has announced plans to begin scheduled services at one of Germany’s hub airports with a $200 million investment. In the summer 2017 season, the low-cost carrier will fly daily to the popular leisure destinations of Malaga, Mallorca, Alicante and Faro.
Ryanair estimates that these flights will carry 400,000 passengers per year.
Ryanair’s chief commercial officer David O’Brien said: "Our two based aircraft represent an investment of $200m, which further underlines our commitment to growing traffic, tourism and jobs in the Hessen region. We look forward to working closely with Fraport to deliver industry leading efficiencies and further growth at Germany’s biggest airport."
The decision to fly to such a major airport is a break from Ryanair’s normal strategy. The Irish carrier are famed for flying to smaller airports with lower fees, making flights for customers as cheap as possible. CEO Michael O’Leary has recently spoken out about wanting to fly to more major airports in Europe, but cited issues with flying to hubs, such as Frankfurt, Paris Charles de Gaulle and London Heathrow. High fees and long turnaround at these airports have deterred Ryanair previously, so what has changed?
Fraport, who operate at Frankfurt Airport, are looking to low-cost carries in order to boost numbers at the airport. Their forecast for passenger numbers for 2016 were cut following terror attacks within Europe, which saw fewer travelling due to security concerns. Low-cost carriers such as Wizz Air and Vueling do serve Frankfurt, but overall only account for 4 percent of passenger traffic.
Fraport chief executive officer, Dr Stefan Schulte, added: "Beginning in the summer schedule 2017, we will be offering passengers in our region another attractive travel option – using the modern Boeing 737-800 aircraft. Thus, we are responding to the strong and growing demand in our region for this aviation segment. Ryanair’s decision to come to FRA underscores the increasing importance of Frankfurt for low-cost traffic."
The new services are mutually beneficial with Ryanair trying to expand their coverage in the German market. With the well-documented issues with German carrier Air Berlin, who downsized their fleet last month, there has never been a better time for Ryanair to do so.
Their move into Frankfurt also presents problems for the airport’s biggest airline, Lufthansa. The German carrier posted their results for the first nine months of the year this morning. Passenger volumes were up for the nine month period, but traffic revenues fell by 4.2 per cent “in the face of continued pricing pressures on both the passenger and the cargo front”, their statement said. Total revenue for the Lufthansa Group for the period of January to September 2016 amounted to €23.9 billion, a 1.8 per cent decline from the same period last year.
Conversely, Ryanair also announced this morning that they experienced double digit growth in passenger numbers to 10.9 million, with load factors rising to 95 percent. Rolling annual traffic has grown by 16 percent to 114.4 million customers.