Ryanair Steps Up Push Into Germany as Air Berlin Retreats

  • Irish giant to add 20% more flights in Europe’s No. 1 economy
  • Extra routes planned for Hamburg base opening next month
Photographer: Luke MacGregor/Bloomberg

Ryanair Holdings Plc will add 10 new routes from Hamburg next summer as the low-cost giant seizes on a meltdown at Air Berlin Plc to offer 20 percent more flights in Germany in 2017.

Ryanair will open a base in Hamburg next month, stationing two jets there and adding seven routes from the north German city to take the total to 14. All of those destinations will be retained next year with three more, including Faro in Portugal and Thessaloniki in Greece, introduced, the company said Tuesday.

Europe’s biggest discount airline is boosting operations in Germany after unprofitable Air Berlin last week announced the shuttering of its Hamburg base and five others in the country as it halves its fleet and cuts 1,200 jobs. Ryanair was already targeting expansion in the region’s largest economy, where it plans to capture 20 percent of traffic, up from about 5 percent now.

“We know that the Ryanair offer will win through in the German market regardless of what happens to Air Berlin,” Chief Marketing Officer Kenny Jacobs said at a briefing in Hamburg. Some other carriers look “artificially good” because of the low oil price and also “could be vulnerable,” he added.

Ryanair’s average ticket price slipped below 40 euros this summer compared with 46 euros in 2015 as overcapacity in Europe’s short-haul market weighs on yields. Chief Executive Officer Michael O’Leary has said he’s happy to engage in fare wars to defend and increase the Dublin-based carrier’s market share.

‘Bogus Merger’

Ryanair said that an arrangement under which Air Berlin plans to operate 40 surplus jets on behalf of Deutsche Lufthansa AG, the biggest German carrier, for five years is both negative for consumers and of dubious legality from an antitrust standpoint.

“There are questions on the legitimacy of any ‘bogus merger,’” Ryanair Chief Operations Officer David O’Brien said in Hamburg. “We have yet to see the details, but it could well be that the European Union could become interested in what may be, to all intents and purposes, a merger.”

Ryanair, for which Germany is the fourth-largest market, is already stationing four additional aircraft at Berlin Schoenefeld Airport, for a total of nine, and will open a base at Nuremberg on Nov. 1 where it will locate one plane and serve six winter routes. Next year’s schedule from the existing Cologne base will also see a new route to Sofia, Bulgaria.

While the carrier currently ranks third in Germany, Air Berlin’s retrenchment to focus on a fleet of just 75 planes will leave it vulnerable to being overtaken and Jacobs said the No. 2 spot is now the target.

Brexit Skeptic

Ryanair also has 50 extra aircraft due from next September “that conceivably could come to Germany,” O’Brien said. Lufthansa is also set to build up the fleet of its Eurowings discount arm, with both the Air Berlin deal and a takeover of Brussels Airlines NV set to provide an injection of jets.

EasyJet Plc, Europe’s second-biggest discount carrier, is also adding capacity to destinations including Berlin and Stuttgart, while Romanian carrier Blue Air said Tuesday that it too plans to ramp up its presence in Hamburg with flights to Liverpool, England, four times weekly starting next March.

Ryanair may also have spare capacity to direct at Germany as it curbs growth plans for the U.K. following the June 23 vote to leave the EU. While some carriers have said sterling’s decline could draw in more tourists, helping to maintain passenger numbers, O’Brien said that may be a limited phenomenon.

“The weaker pound is not going to suddenly stimulate a lot of people in Hamburg to choose Newcastle instead of Palma de Mallorca,” he said.

— With assistance by Richard Weiss

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