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After many years serving the Norwegian capital via smaller secondary gateways, budget carrier Ryanair has confirmed its first schedules into the city’s main international gateway with four daily flights launching at Oslo Gardermoen Airport from October 30, 2016.
The introduction of flights from the city’s main airport to both the Lithuanian capital, Vilnius, and to London Stansted this winter, continues Ryanair’s new strategy of serving better linked capital city airports as the low-cost carrier moves to supporting higher yield passengers with more business-friendly schedules.
The initial choice of more remote airports was part of Ryanair’s aim to keep costs at their lowest level. In Oslo’s case this meant serving Torp Sandefjord Airport, approximately 110 kilometers south of Oslo and more recently also Moss Airport, Rygge around 60 kilometres outside Oslo. Both facilities are former military bases converted for civilian operations and have proven popular with budget carriers, albeit KLM does now have a presence at Sandefjord Airport.
The move follows the confirmation this week of the closure of the airline’s base at Rygge after the Norwegian Government introduced of an 80NOK tax on all departing passengers. Ryanair said the “environmentally unfriendly tax” will damage Norwegian tourism, traffic and jobs and left it with “no choice” but to modify its Oslo operations.
Since Rygge opened in 2008, Ryanair has used it as it primary Oslo gateway while reducing its presence at Sandefjord. It opened a base at the airport in March 2010 and this year is offering direct flights to 27 destinations – it also serves Liverpool from Sandefjord, bringing its Oslo network to 28 destinations.
It will this winter close the Rygge base from October 29, 2016 and cancel 16 of its routes from Norwegian capital, cutting its capacity by a half. The removal of its four based aircraft leaves its operation unsustainable, with Rygge confirming it would be unable to support reduced non-based services offered by Ryanair.
The London Stansted and Vilnius routes will be supported out of Oslo Airport by low-cost airport agreements at the destinations, while eight other routes will be switched to Sandefjord.
These consist of flights to Alicante (twice weekly), Bergamo (twice weekly), Gdansk (five times weekly), Gran Canaria (twice weekly), Krakow (daily), Manchester (four times weekly), Tenerife (twice weekly) and Warsaw Modlin (five times weekly).
“The illogical decision of the Norwegian Government to introduce a flat rate environmentally unfriendly tax unfairly penalises passengers on efficient, green, airlines such as Ryanair in favour of passengers on high fare, half empty, gas guzzling airlines, and destroys the cost competitiveness of privately owned Oslo Rygge Airport in favour of the state owned Avinor monopoly,” said David O’Brien, chief commercial officer, Ryanair.
“This tax will severely damage Norwegian tourism, particularly around regional airports. The Norwegian Government has instantly made Norway uncompetitive and less attractive to airlines and tourists,” he added.
Ryanair last year offered just over one million seats from these Oslo airports, according to data from intelligence provider, OAG. However, as the chart, below, illustrates, this is a decline on the capacity levels recorded at the start of the latest decade.
As the industry is continuing to evolve, so has the low-fare business model and Ryanair’s low-cost structure means it can better compete with rivals even serving more expensive major airports. In fact, when Ryanair launches its new routes from Oslo Airport it will be on an equal footing with other airlines that fly to or from Norway's main airport, according to operator Avinor.
"Ryanair will pay the same fees and have the same terms and conditions that are offered to other airlines that fly to and from Oslo Airport," said Øyvind Hasaas, managing director, Oslo Airport.
"We welcome Ryanair to Oslo Airport, and view this as confirmation that another major international airline has recognised the value of flying Norwegians to attractive destinations in Europe. This is yet another contribution towards strengthening a route network that is already very good," he added.
Ryanair will initially offer four daily flights from Oslo Airport during the winter schedule with three daily rotations to London Stansted and a daily link to Vilnius. It currently serves both markets from Moss Airport and will likely reduce capacity there to facilitate the new flights.
The budget carrier will be the sole operator to London Stansted, a route previously served by Norwegian up until March 2009, although it will face strong indirect competition from British Airways, Norwegian and SAS who currently serve other airports in the UK capital from Oslo Airport. Ryanair will also compete with Norwegian and SAS in the Oslo – Vilnius market, but will be the only carrier providing a daily schedule on the route.
"Ill-advised, damaging and counter-productive"
Airport body, ACI Europe has described the introduction of the new air passenger tax in Norway as "ill-advised, damaging and counter-productive". In spite of similar taxes being repealed in Belgium, Denmark, Ireland and the Netherlands, it said the Norwegian government has embarked on a "very poor piece" of policy-making.
Nations that had previously adopted a similar tax, removed it after acknowledging that taxing air transport directly hurts economic performance, and ultimately the State’s ability to collect wider tax revenues. Air connectivity and GDP growth are closely interrelated. They actually reinforce each other, with every 10 percent increase in air connectivity yielding an additional 0.5 percent increase in GDP per capita, according to ACI Europe.
Earlier this year, ACI Europe participated in the public consultation launched by the Norwegian government on this issue, outlining its concerns, with hard data to back up its claims. A recent study found that Norwegian airports and associated aviation activity had a wider stimulating effect on the Norwegian economy, equivalent to over €8.3 billion of GDP each year, supporting 60,000 jobs. This is on top of the direct, indirect and induced economic impact which this aviation activity also supports (equal to €6.96 billion of GDP and 63,800 jobs annually). This means that in total, aviation supports four percent of Norway’s economy.
“With the introduction of their new tax, the Norwegian government is jeopardising future growth and a key source of jobs. It is bewildering to see a country sitting on the periphery of Europe – and even more dependent on air connectivity than others – making such a move,” said Olivier Jankovec, director general, ACI Europe.
“The impact will be especially harsh on smaller regional airports and their communities. This new tax is just bad policy-making. Air connectivity should not be considered as a given. It needs to be nurtured and supported – not taxed and contained,” he added.