Ryanair, is the era of low-cost flights coming to an end? Company unveils upcoming plans

Ryanair says goodbye to low-cost flights? It seems to be the end of an era that announced in precise and clear words by CEO Michael O’Leary, who was in Milan at the end of September at a press conference to present the routes to Milan Malpensa and Bergamo for the coming winter season. Accomplice to the high fuel prices, but also a change of perspective, the Irish airline’s CEO reiterated what he had already stated in the London press and outlined the company’s future scenarios. “In the interview I gave to the Financial Times,” O’Leary said, "I had said that we would no longer see tickets at 9.99, and immediately the funeral of the low-cost airline was celebrated. The issue of course exists, but how long this will go on is impossible to say: what is certain is that as long as fuel costs are like this we will not see them again. And for next summer, average fares will go from the current 40 to 45-50 euros."

The company’s country manager for Italy Mauro Bolla explains, “The inflationary spiral is there, and it is true that 10-euro tickets are gone but there will still be millions of fares at 19.99 euros and 24.99 euros. We are still the company with the lowest prices. as of today the average price per passenger is 40 euros and it could rise to 50 euros.” Thus, the airline that first centered its hallmark in thelow-cost airplane-for-all changes course, while still having rosy forecasts: by 2023 the goal estimated as achievable is 56 million passengers in one year. But long-haul routes are not in the airline’s plans: “These are two completely different worlds, we are not going back on our decisions. It’s a closed discussion,” explains O’Leary, who reiterates the model by which Ryanair’s philosophy was born: "We offer a model that is all about low fares, basic services without business class or other additional things. Companies that do long-haul, particularly on some routes, base their fortunes in reverse on premium services because there is a large segment of the market on those routes that wants just that and is willing to pay a lot of money for it. I don’t know why but that’s the way it is and we had to take note of it."

For the moment in Italy, route developments are planned in North African countries: in addition to Morocco where they are already present, interest is on Libya, Tunisia and Egypt: “For the first two countries it is possible that we will see flights as early as next year, while on Egypt the main problem is the cost of airports, but we count on entering with routes from some countries such as Italy and Germany.”

In an interview in Il Tirreno, country manager Mauro Bolla explains more about the company’s strategy in choosing the airports on which to operate: “We are able to develop all the airports where we are located regardless of their proximity. To boost tourism we have a point-to-point model: we don’t take the passenger to the final destination through a hub airport, but we directly connect the initial destination to the final destination, so we diversify movements and above all each airport has its own specific demand that we aim to develop. Experience shows us that we have been able to increase tourism even in the case of neighboring airports.” And indeed on the ability to guide the tourism choices of passengers Ryanair has something to say: in fact, on its website there is a section dedicated to destinations that have stopovers where the company operates, and for each of these destinations they explain in a rich way the points of interest to make a trip there. A way that undoubtedly supports a local economy and encourages tourism in lesser-known locations.

In Tuscany, Ryanair has been operating out of Pisa for many years, but Mauro Bolla also does not rule out a landing in Florence as a new airport to operate out of in the future, depending on the timing for the construction of the new runway at the Florence airport. And regarding the feared repercussions on Pisa, Bolla claims what has been done in other similar situations with neighboring airports, “Take Catania-Comiso, Trapani-Palermo, Turin-Cuneo or Treviso, Venice and Verona. All airports,” the manager explains in the Tirreno interview, “where we operate with Ryanair. We are able to develop all the airports where we are located, regardless of their proximity.” And on the two major Tuscan cities, a magnet for Italian cultural tourism Bolla explains, “The Galilei in Pisa remains the great gateway airport to Tuscany. We have always said this. Here 75 percent of connections, even in the new winter plan, are aimed at foreign destinations.” An airport that has new expansion work and improvements planned. “For us,” Bolla explains, “it is important that the airport is usable for the passenger, but above all that it is optimized at the operational level. In a word efficient, since as a company we have very fast turnarounds. And Pisa already is. Then surely the terminal will benefit Galilei users.”

As for the new government (“So many have changed in Italy and we have continued to grow year after year.”) Michael O’Leary has already planned to meet with him “to make our proposals related to the elimination of taxes on tourism giving in return the possibility to increase again flights and planes based in Italy, with an increase in jobs.” Mauro Bolla is explicit, during the presentation at Galilei of the winter season planned for the Pisa airport: “The additional municipal tax at 6.5 euros per passenger is a levy that slows down development, it is a serious detriment. A real tax on tourism.” And turning to the new government, “We will ask the president of the council, Giorgia Meloni, as we have already done with an official letter to Draghi, to remove the municipal surtax that brings no real benefits to cities that receive just 10 cents of that amount.” A request that other airlines have also been asking for some time(here Areoitalia CEO Gaetano Intrieri interviewed by Finestre sull’Arte who is of the same opinion). “We do it because that tax is a brake on development and we do it also as Aicalf, the association of low-cost airlines of which Blue Air, EasyJet, Norwegian, Ryanair, Volotea and Vueling are also members, It is right however that it is we, however, who are pushing this button as the holders of the most important slice of the Italian market and because we see every day the effects it determines from the commercial point of view and of the penalizations of tourist flows. It is also a battle in favor of Italy and Tuscany: the municipal surtax brings no benefit to the municipalities to which goes a derisory amount, irrelevant to municipal coffers, it is eaten up almost all by the Inps. But then it is a resounding brake on the possibilities of growth of tourism in a country like Italy and regions like Tuscany, which are sought-after destinations all over the world.”

A tax, moreover, that does not exist in other countries such as Spain and Greece, and it is no coincidence that Spain has already become Ryanair’s top market ahead of Italy. “If the government intervenes by eliminating it,” Bolla assures, “we are ready to immediately bring 40 more aircraft to our Italian bases. An investment capable of generating 1,500 new direct jobs, about 40 thousand in induced jobs and 20 million more passengers. Clear and demonstrable numbers, which help to concretely support the recovery after the Covid years and boost the entire Italian economy, which has in tourism one of its main levers.”

For the winter season from Pisa, however, Ryanair Italy’s country manager announces 36 new routes, one more than for winter 2019. “The investment on Pisa,” explains the low-cost executive, “is 700 million dollars, to create 36 routes, including the new one to Stockholm and 280 flights per week (such as Paris, Seville, Valencia, Bucharest, Budapest, Prague, Gdansk, Tenerife, Marrakesh, Fuerteventura...) . A volume of business that generates a total of 3300 jobs in Pisa, including 200 in the allied industries. Meanwhile, until October 29, it is possible to book one-way flights for the entire Ryanair network at €24.99 for travel from October to March.”

Bolla also comments on the figures for the summer season: “Extraordinary numbers with 90 aircraft based in Italy and a load factor index (i.e., flight fill per number of passengers) of 96 percent. These are excellent figures that confirm to us how much Ryanair is a driver of development for the territories served throughout Europe and Italy and, consequently, also for Pisa and Tuscany. Our goal is to reach 56 million passengers in fiscal year 2023, which would correspond to 3,000 direct jobs and 40,000 from the airport and tourism supply chain.”

Ryanair, is the era of low-cost flights coming to an end? Company unveils upcoming plans

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