ALEXANDER CAMPBELL / LONDON
Low-cost carrier outlines plans to attack Lufthansa's domestic stronghold and predicts it will be Europe's largest airline
Ryanair has increased its forecast growth rate to 35% a year after reporting record 2001 results and has reiterated plans to take on Lufthansa in its domestic market.
Chief executive Michael O'Leary says the low-cost operator is now Europe's seventh largest scheduled airline, with 11.1 million passengers carried, just behind Alitalia with 11.8 million. He predicts Ryanair will be the largest in Europe, in terms of passengers carried, within five years.
The airline carried 38% more passengers than in 2000, but revenues were only 28% higher at €624 million ($590 million), reflecting a drop in yield. Ryanair yields have fallen for the past five years.
Growth forecasts for 2003 and 2004 have been revised from 25% to 35%, so some of 100 Boeing 737s already ordered will be brought forward: 12-14 instead of 10 737-800s will be delivered in 2003, and 18-19, rather than 15, in 2004.
This year will see the launch of 10-11 new routes and a new base established in mainland Europe, says O'Leary. German domestic routes are not going to be among them, although Ryanair is still interested in taking on Lufthansa in its own market. Ryanair needs to operate international services to around 25 of the 41 737-capable airports in Germany before starting connecting services between them, O'Leary says. It is negotiating with "between five and 10" of them.
France is one option for anew base to join Ryanair's hubs at London Stansted, Brussels Charleroi, Glasgow Prestwick, Dublin and Frankfurt Hahn. French law imposes a 35h working week, but this will not restrict Ryanair's operations, with O'Leary saying: "We'll break the laws in France if that's what needs to be done."
As well as the consequences of the 11 September US terrorist attacks and the UK foot-and-mouth disease outbreak, Ryanair has also suffered from soaring fuel prices. At a time when most other airlines were benefiting from lower fuel costs, Ryanair, locked into hedges made on a rising market, saw its prices rise 90% over the year. Adding more efficient aircraft reduced the impact, but spending on fuel and oil still rose 63%, compared with 2000. But O'Leary says new hedging efforts mean costs are likely to fall 15% this year.
Source: Flight International
