Ryanair will be adding 22 B737-800s to its fleet in 2011, nine of which are already allocated, leaving it to look for homes in Europe for 13 aircraft, said its director of route development, Ken O’Toole on November 9, who was speaking at a briefing session at World Travel Market in London.

O’Toole said there are major opportunities for European airports and tourism authorities, with the low-cost airline continuing to pull capacity out of Ireland and the UK, due to the economic conditions and taxation regimes in those markets.

Spain and Italy, in particular, are benefitting from this redirection of capacity, with Ryanair holding 14% and 43% market share in those respective countries.

O’Toole said Ryanair would continue to grow in 2011 and 2012 but would then have to order more aircraft to support any growth thereafter. In 2010, Ryanair has added 48 new aircraft to its fleet and created 11 new bases, adding seven million passengers and 431 new routes.

“We estimate that we hold 12% of the short-haul European market and believe that our ambitions of 25% are reasonable. Growth to 85 million passengers is possible. However, growth will stop at 2013 and then it will be a case of ‘rechurning’ the market. That said, we would like to place an aircraft order if the cost conditions are there to support it,” O’Toole stated.

Future Opportunities

O’Toole said there remains major opportunities in Spain and Italy, as well as Norway, Portugal, Greece, Bulgaria, Cyprus and Russia. He added that future open skies agreements in Turkey, Tunisia and Georgia could make these interesting countries for the carrier.

“There are also opportunities at primary European airports where flag carriers are retreating,” he said, adding that between 10 and 12 major European gateways have expressed interest in securing Ryanair service in 2011.

“There are opportunities in these types of airports, if the cost and operational conditions make sense. For instance, Barcelona made sense for us as it has strong in and outbound potential, strong international potential, is fairly non-seasonal and there are weak competitors in the market.”

Case study 1: Italy

Ryanair has 43% market share in Italy, but O’Toole believes major opportunities remain in the major airports. “We remain underweight in the main markets of Rome, Milan, Venice and Naples,” he said.

• Largest carrier in country
• 10 bases
• 23 airports
• 265 routes
• 22 million pax in 2011

He highlighted Ryanair’s ability to go into underserved markets and stimulate demand with the examples of Trapani and Alghero:

Trapani, North East Sicily

• September 2006 – first route
• September 2007 – five routes
• May 2009 – became a base with two aircraft and 1.8 million passenger
• Winter 2010 – two additional aircraft and nine international routes

Alghero, Sardinia

• June 200 – first route
• 2007 – seven routes
• April 2009 – one aircraft based with 850,000 passengers
• Winter 2010 – eight international routes

Case study 2: Greece

• Launched service in 2010
• Six routes – Milan Bergamo to Kos, Rhodes and Volos; Frankfurt Hahn to Kos and Volos and Pisa to Rhodes.
• O’Toole said: “Could we put an additional one million passengers into Greece in 2011? Absolutely, and it is an opportunity we are considering.”
• What changed? O’Toole said changing economic conditions in Greece meant that Ryanair was able to meet its target operational cost of €250 per turnaround.

Top Tips For Tourism Authorities:

1) Be proactive. “The Ryanair route development team is made up of four people and we can’t know everything about every market. Engage with us and advise us on opportunities.”

2) Have long-term plans. “One of my biggest bugbears is when a tourism authority comes to use with one-year timescales or budgets. A three or five year plan gives us much more confidence that we are working with people that have the same objectives as us.”

3) Encourage the creation of cost conditions that encourage growth.

4) Allocate budgets to support the development of new markets.

5) Work with Ryanair on marketing and advertising. “Take advantage of the buying power that companies like Ryanair have in both print and outdoor advertising campaigns.”

6) Divert money into web-based advertising.