Ryanair Returns to Manchester

The management of Ryanair have “kissed and made-up” with Manchester Airport just over a year after the airline pulled most of its flights from the UK facility.  The Irish budget carrier first launched flights from Manchester in 1994 and in the summer of 2009 offered flights to ten destinations in six countries.  However, the failure to agree a new long-term deal with the airport’s executives led it to cancel all but one of its routes; a multiple daily rotation to Dublin.  From October 1, 2009 the budget carrier has operated just that single route, but from April it will return to Manchester Airport as a major force with new services to what its Chief Executive Officer, Michael O’Leary describes as “sexy sun destinations”. 

The HUB sat down with Ryanair’s charismatic boss this week to learn more about the airline’s plans at Manchester.  In his typically out-spoken manner O’Leary hit out at Ryanair’s budget rivals claiming that they “masquerade as low-fare airlines but without the low-fares” and claimed that British Airways was trying to copy Ryanair by appointing fellow Irishman Willie Walsh as its Chief Executive, someone he described as “not as pretty or brilliant as me”.  However, his most notable blow was against the former management of Manchester Airport, who he claimed “didn’t understand growth”.  Shortly after Ryanair pulled its route from Manchester, the airport’s former Managing Director had claimed they were not willing to ‘prostitute’ themselves to the low-cost carrier.  “Well, It now looks like we are all back in the sex industry,” said O’Leary.  “We obviously prefer not to have to pay for it but we recognise that in some circumstances - like flying to an airport like Manchester - that you have to.”

From April 14, Ryanair is to offer a daily service to Faro, six flights a week to Alicante and four weekly frequencies to Tenerife and Madrid; the latter a brand new destination from Manchester.  It will also increase frequencies to Dublin to 21 services a week.  Ryanair will compete directly with easyJet to Alicante and Tenerife; with Jet2.com to Faro and Tenerife and with Monarch Airlines to Alicante, Faro and Tenerife, but still expects to carry more than 600,000 passengers per annum across its Manchester network.  “Our low-fares will help attract passengers from our rivals while stimulating traffic,” O’Leary explained.

With the exception of Madrid, all the destinations are currently served from Ryanair’s base at Liverpool’s John Lennon Airport, where it has expanded aggressively following its previous cuts at Manchester, but O’Leary believes that its low-fares will help stimulate the market.  “We know that a large number of passengers currently travel from Manchester to Liverpool to use our flights.  They will now be able to fly from their local airport and the extra seats at Liverpool can be sold locally,” he said.

This is expected to be just the first stage of the airline’s growth at Manchester and O’Leary said he would be willing to talk about network expansion in the future.  “The new management team at Manchester has recognised that the airport has lost out to rivals in the past,” he said.  “We understand that the airport has other airline partners and we don’t want to trash the market, but they approached us with the target of boosting flights to the Western Mediterranean and we have delivered.  We will now wait to hear if we can grow elsewhere and the incentives they can offer for us to expand.  If all goes well we could connect Manchester to our other bases in Spain and the western Mediterranean in the future.”  However, he noted, there are no plans to open a base at Manchester at the current time and that the arrival of these new flights at off-peak periods have helped it to negotiate a good commercial deal while at the same time helping the airport manage daily passenger flows. 

Away from Manchester, but linked to this announcement, was confirmation that Ryanair will inaugurate its first ever route from Humberside Airport.  The twice-weekly connection to Alicante will be launched on April 12 and will be its only link to Spain this summer after Flybe dropped its Malaga flights after just one summer season.  The Lincolnshire facility is located approximately 12 miles (19km) from Grimsby and currently has very limited scheduled traffic.  It is owned by Manchester Airports Group (MAG) but O’Leary confirmed that the timing of the announcement was coincidental and was not linked to its Manchester growth.  “We were approached by Humberside Airport and have an independent arrangement with them.  We will see what the route is like this summer before we look at our long-term plans,” he said.

The current calendar year will be one of the airline’s busiest as a further 40 Boeing 737-800s are introduced into its fleet and passenger volumes are forecast to increase from 72 million in 2010 to around 78 million.  Its last remaining aircraft are due for delivery from Boeing in 2012 and after another year of growth the carrier will take time to take stock of its dramatic rise.  “I think 2013 and 2014 will be years of zero growth when we can look at boosting our yields,” said O’Leary, “but we will then look to grow again but at a much slower rate than previously. 

This will mean more aircraft orders and O’Leary confirmed that the airline will continue negotiations with Airbus and Boeing once “they are ready to make a sensible offer”.  Ryanair is solely interested in “seat mile costs”, according to O’Leary, and some of the latest developments from the manufacturer to enhance their short-haul models will not influence the company.  “If there was a real leap forward in engine technology then we would stand up and take notice,” he said.  It is no guarantee that the airline will turn to the ‘big two’ and O’Leary revealed to The HUB that Ryanair would seriously look at emerging medium-haul projects from China and Russia, although its motives may simply be to ultimately drive down unit prices at Airbus and Boeing.  “The emergence of these programmes will help bring real competition to the market,” he added. 

Some reports have suggested that Ryanair is changing its business philosophy and will moving away from the ultra-low-cost model, but O’Leary refutes this as simply poor reporting.  In reality, he noted, the divide between airports is blurring as larger city locations attempt to claw back some of the traffic they have lost over recent years.  “It is simply a case of them approaching us,” he said, citing Barcelona El Prat as an example - Ryanair now has a base at the Spanish airport with flights to 23 destinations.  “We have moved from airports not interested in talking to us to suddenly doing deals with them,” O’Leary added.  He believes the economic recession has played a key part in this development claiming “recessions are fantastic for carriers like ourselves”, although he noted that rising fuel prices could impact the industry.  “We are fortunate though,” he said, “as we have hedged out at $72 dollars a barrel until the year-end, when the spot price is currently around the $90 figure.” 

Ryanair’s story at Manchester certainly makes interesting reading, but after its high profile falling-out, why did it continue to maintain a single route.  Well, passenger numbers show a huge demand between Dublin and Manchester with almost 600,000 O+D passengers travelling between the two airports in the year ending November 2010, according to IATA BSP data.  The low-cost carrier has a 58 per cent share of the market with its Irish counterpart Aer Lingus holding the remainder.  However, the traffic numbers do not tell the whole story and a further investigation of the data shows vast differences in yields, with Aer Lingus’ average fare during the period being almost three times higher than its rival.  Whatever the reason for maintaining the link one thing is for sure, the passenger count would certainly have included Michael O’Leary travelling to watch his favourite football team…Manchester City.

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