Ryanair

As the airline comes to grips with the ‘new normal’, operating only 40% of their 2019 winter programme, it looks towards the summer (April to October) 2021 season for growth. Credit: Stefano Garau / Shutterstock.

Ryanair is now looking to summer 2021 to drive traffic growth across Europe but only if travel restrictions allow.

Ryanair, famed for its famously low prices, is an industry titan and is known to stimulate tourism flows to markets where there was previously little demand. As the airline comes to grips with the ‘new normal’, operating only 40% of their 2019 winter programme, it looks towards the summer (April to October) 2021 season for growth. The airline plans to operate a staggering 50%-80% of its previously planned schedule and expects the arrival of its Boeing 737 MAX-200 aircraft with 4% additional seats compared to the current fleet to support its operational ramp-up.

The airline’s financial position will enable it to rapidly increase operations

The airline has been severely impacted by the Covid-19 crisis with passenger numbers falling by 80% for the first half of 2020’s fiscal year from 2019. Ryanair reported a loss of only €197m ($238.8m) in H1 2020 (April to October), placing the airline in a stronger position than many of its European counterparts who have made losses into the billions.

The airline’s significant presence in Europe will enable it to be bullish in its summer expansion. Ryanair can flood low fares into the market and significantly stimulate demand, but success will depend on how the Covid-19 pandemic progresses.

The arrival of a vaccine and further roll-out of airport testing across Europe will be essential to improve consumer confidence and help drive traffic growth. Without this, demand is likely to be suppressed and even the ‘Ryanair’ effect will not stimulate the market enough to warrant operating at 80% of planned capacity.

Consumer confidence is low and travel restrictions are a massive challenge

Only 30% of global respondents in Globaldata’s latest consumer survey (7 – 11 October 2020) ‘strongly’ or ‘somewhat’ agreed that they will book an international trip (business or leisure) this year, increasing slightly to 41% for a domestic trip.

As the pandemic enters its second wave across many European countries, confidence is set to decrease further as more travel restrictions will create a physical barrier to travel.

Pent-up demand is evident in the aviation industry and the recent opening of the Canaries to many European countries proved this. Two days after the announcement that travellers will not have to quarantine upon return, Ryanair recorded 52,000 bookings for the islands, leading to the addition of extra capacity into the market.

With more European countries announcing further restrictions and lockdowns, the outlook for 2021 is looking bleaker than ever.

If the airline’s history is anything to go by, Ryanair could drive growth passenger demand across Europe in 2021. Proper management of travel restrictions, streamlined corridor lists by European countries and the replacement of quarantine with testing could all positively work in Ryanair’s favour for a successful summer 2021 season.

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