Interesting article in Times of Malta published over thee weekend
Ryanair grounding 20 planes next winter
by NOEL GRIMA
Irish low cost airline Ryanair is planning to ground around 20 aircraft next winter to counter the impact of spiralling fuel costs. Ryanair is embarking on an intensive cost-cutting drive for its 2008-09 financial year as its fuel costs threaten to widen by €300 million, pushing its profits down by up to 50 per cent
Speaking during the French Connect Low Cost Forum in Courchevel, Ryanair deputy CEO Michael Cawley warned of tough conditions to come this winter.
“This winter is going to be very difficult,” he said. “We will put 20 aircraft on the ground for the winter because it’s more profitable. We would just lose a lot of money (operating them), burning fuel.”
The carrier grounded seven of its 40 aircraft at London Stansted last winter, saying increased airport charges made it more profitable to ground the aircraft during the winter than to operate them, according to Air Transport Intelligence News and
www.flightglobal.com.
This information puts in a very different context the threat by the airline that unless Maltese airport charges come down more, the airline could be “forced” to cut down one or two of its present eight routes. It was reported these two routes could be the Bremen and the Girona ones.
An expert told this paper: “The thing is also that nobody will lease these planes. Air Malta’s planes can be easily leased, if they get the right price, because of a more universal cabin layout/look. So they are interesting for premium network carriers, say Etihad, or also charters, like Skyservice/Canada. But with Ryan’s cabins, who is going to take those? It’s no problem to sell them second-hand, but just for a temporary lease where you can’t change the cabin...
“What I reckon is what they are doing now is going around Europe to collect more subsidies and those who give least will have some flights cut… What they will try and do is sell the public in Malta that they do this only because of MIA, but the fact is that these are artificially created markets in a high fuel price environment.
“Besides, I don’t know why Ryanair is always asking for more State intervention for everything. Thought they were the Herald of Free Air Enterprise.”
In an article that appeared in The Malta Independent on Sunday on 5 October 2005, it was stated “Ryanair recently warned the Austrian government that it could seriously rethink its position, which could have grave consequences for the country, if the government does not remove a E3,60 security fee increase, which has gone up to E7,99. Ryanair, in some way, as a kind of warning, will cease all services to another Austrian airport from both Stansted and Hahn from the end of October, just as a three-year ‘embrace contract’ expires.
“In Cornwall, Ryanair announced it would proactively reduce flights on the Stansted-Newquay route, but have not set a concrete date yet, because of a future airport development tax of the enormous sum of Lm5 per return passenger. Ryanair says far less people would be interested in Cornwall with this Lm5 rise on a vacation, but will vote with their feet and go elsewhere (irrespective of the higher fare due to distance of course).
“Getting oneself into a seemingly cosy dependency with only one single enterprise, which can pack up as soon as it does not get what it wants, (in contrast to a private airport, a static object, or also Air Malta as national carrier of, incidentally, an island on the periphery of the EU), which one cannot deny it, might not be everybody’s choice.
“Is it, given long-term energy price challenges, working towards re-focusing tourism on ‘hen night trips’ or ‘pub/club crawls’, or ‘candlelight dinner flights’ some propagate, over at best 2000+kms one-way away purchased only because it is extremely cheap (remember, according to one airline even a few euros make the crucial difference) and tax-free, nothing else, the real way forward?
“Why strafe Robbie Borg’s entrepreneurial dedication to Malta by installing parallel flights supported with advantages his small Britishjet cannot get?
“The problem is not lacking air transport capacities. This summer there were tourists who would have liked to fly to Malta but found all interesting accommodation sold. The problem is not too few hotels in general but having more nights spent during off-peak seasons to fill a (temporary under-occupied) already existing airline and hotel capacities, both of which are not really variable. Can adding more capacity help? Maybe one must make Malta more attractive during off-peak seasons through third measures. Diversifying source markets to spread risks of regional economic slowdowns can help too.”
In contrast, just a couple of hours after the Ryanair press conference on Friday, Air Malta announced a strong winter performance with a 15 per cent increase in passengers carried. Malta’s niche is for short breaks, Chief Officer Commercial Brock Friesen told a press conference. This summer it will have five flights a day to London and as from next year two flights a day to Munich. Another code sharing agreement is due to be signed soon. With many carriers linking Malta to Gatwick, Air Malta will not be the one to pull out, Dr Friesen said.
As regards the French market, Dr Friesen announced an aggressive sales attitude, which will soon see the airline linking on an almost daily basis Malta to a French unnamed city with a 10 million capacity market.