LONDON (AFX) - Ryanair Holdings PLC, the Irish budget airline, is to set up its first base in Eastern Europe, as it looks to open up a new front in the low-cost travel market as competition intensifies in the UK and Germany, The Business reported, citing the company.
Ryanair said it has six bases "lined up" around Europe: two in the UK, two in France, one in Germany - and one in eastern Europe. It refused to reveal the identities of the prospective hubs, said the newspaper.
But Ryanair, headed by chief executive Michael O'Leary, is likely to hold off a big push into eastern Europe for the next couple of years, the Business said.
The market-leading airline believes the low-cost market is still underdeveloped in some of the more lucrative western European countries, citing the example of low-cost operator Southwest, which has enjoyed several decades of growth in the US.
A Ryanair spokesman told the Business: "Initially there will be a big rush to places like Warsaw but that doesn't mean there will be sustainable traffic in both directions."
While barriers to entry into the eastern European market are low, it may be harder to reduce costs. People also tend to have less disposable income than in western European countries, Ryanair said.
