Ryanair flies back into land of its forefathers

Date: 15/05/1997

By Chris Johnstone

COST-conscious Scandinavians will soon wake up to the Irish version of low-cost travel when airline Ryanair's bid for a slice of a fresh market takes off.

Moving on from Ireland, the UK, France and Belgium, Ryanair is looking to offer cheap no-frills flights between Dublin and Stockholm in June, just over a month after it launched similar return services twice a day from Ireland to Brussels and Paris.

The new Swedish run follows a tried and tested formula which can be summed up as cutting costs to the bone, avoiding expensive airports and encouraging a high volume of passengers with cheap tickets.

It is a formula which the airline only arrived at after trying - disastrously - to take on the established airlines head-to-head on the same routes.

The change in policy came in 1991 after Ryanair found itself unable to compete with services to such expensive hubs as Paris' Charles de Gaulle airport. Six years later, the airline is back, almost, to the spot where it had its Pauline conversion, having swapped Charles de Gaulle for Beauvais, a little-used airport 50 kilometres north of Paris.

Ryanair should transport more than 4 million passengers this year, putting it in the same league as some of Europe's smaller national airlines such as Belgium's Sabena and domestic Irish rival Aer Lingus.

The carrier's fast take-off since it found the winning formula has even attracted the likes of British Airways to investigate taking a large stake in the airline, although talks broke down last year when BA and Ryanair were unable to reconcile their different philosophies.

“I do not see a synergy between Ryanair and another European airline,” says Ryanair's commercial manager Tim Jeans.

Stockholm is seen as a bridgehead and the beginning of an assault on the rest of the Scandinavian market, which is infamous for its high flight costs. The city is something of an historical return as well - Dublin was founded by the Vikings 1,000 years ago.

On the Dublin-Stockholm service, read Stockholm south airport (about 80 kilometres from the centre) for the Swedish capital and Brussels south (Charleroi) for the capital of Europe.

The more central Stockholm Aarlanda and Zaventem airports are too pricey for Ryanair.

“I do not want to go into how much lower the airport charges are elsewhere, but I can say that Beauvais is more than half the cost of Charles de Gaulle - perhaps four to five times cheaper,” says Jeans.

The European Commission's drive to cut the level of airport charges and force the authorities to give more details of how prices are totted up is an irrelevance for Jeans, since the airline has already turned its back on the high-chargers and has proved that passengers will follow if the price is right.

Ryanair has no desire to put itself back in the clutches of the big airports. If anything, warns Jeans, the Commission's drive on charges could actually push them up by ending some cross subsidies by airports from money-spinners such as duty free sales.

Globally, both Jeans and Ryanair are happy with the way EU airline liberalisation has taken place.

The new routes to Brussels and Paris were opened with little form filling or bureaucracy. “The regulations have been reduced to almost zero. All we had to do, more or less, was inform the national authorities of our intentions and that was it,” explains Jeans.

With its Brussels flights already booked up throughout May, Ryanair appears on course for success, even when measured against its ambitious targets for packing passengers into planes.

Ryanair must have its aircraft flying at least 80&percent; full in order to make money with ticket prices often less than half those of its rivals, says Jeans.

Even with no frills, crowded planes and a slightly longer journey for most passengers after touchdown, Jeans feels Ryanair can still be a tempting prospect for the business traveller or conference-goer, especially if the company accountant is looking over his or her shoulder.

But for Irish civil servants used to comfortable, expensive business class flights into Brussels, there is a warning.

“We will be putting pressure on Irish government departments to see that we get a fair share of that Brussels business because the price gap is so big. However, we also hope they will use the service out of choice,” says Jeans.

The airline also expects to expand the overall markets it moves into.

“Instead of a delegation of farmers spending around 500 pounds each to send one or two of their number to Brussels they can send half a dozen people,” explains Jeans. “At the moment, the market between Dublin and Paris is 200,000 - that is, half the size of Dublin to Manchester.”