The flag carriers’ new song “Feed me, feed me”

Michael O’Leary’s airline Ryanair has probably been called many things over the years (as has he) but we doubt that it’s ever been called a ‘feeder’ before. But we might all have to get used to using that term should he get his way, because the abrasive Chief Executive has signalled that he intends to approach the European ‘flag carriers’ and provide them with passengers for their long haul flights. EasyJet has declared a similar move.

In doing so, the two budget airlines, who between them have transformed the European aviation landscape, look set to do it again. And who would want to bet against them succeeding? These are no longer upstarts to be humoured but major players in their own right. In 2015, the two airlines between them carried over 170 million passengers. That’s nearly as many as Air-France-KLM and IAG (comprising British Airways, Vueling, Iberia and Aer Lingus) combined. These two giant airline groups flew 176 million passengers between them so only a nose in front.

The plan would be for the budget airlines to deliver passengers from their short-haul flights to the flag carrier’s long range aircraft. On the face of it, it’s a win-win situation, giving the flag carriers a chance to withdraw from their less profitable short haul routes and so focus on their more profitable long haul ones, or at least carry more passengers with only a small increase in marginal costs.

In the long run, its probably better for the flag carriers to try and cosy up to the budget airlines rather than butt heads with them. Ryanair’s average fare in the six months to September 2015 was a paltry €56 a seat. None of the flag carriers, with their expensive overheads, can get close to that price without haemorrhaging yet more cash. (In fact, their average seat prices are closer to €150 so nearly three times more).

The devil as they say (and we’re sure Michael O’Leary has been called that!) is in the detail and he has already stipulated that he won’t be held responsible for missed connections or baggage (no surprise there, then!).

And there are considerable operational obstacles to be overcome, not the least, providing passengers with just one ticket (although they are using two separate airlines) and the logistics involved in transferring passengers through airports so as not to go through immigration twice.

But why would Ryanair and EasyJet bother? Some analysts have already pointed out that as 85% of the European short-haul market is point-to-point, (ie, passengers start their journey and finish it within Europe),then only 15% of these passengers would want to connect onto long-haul flights anyway. And as the budget airlines –  despite their remarkable growth –have only taken 35-40% of the short haul market between them, then there’s still plenty to play for in their ‘traditional’ market.

Michael O’Leary has been quoted as saying that the flagship carriers should “stop messing around trying to be low-fare airlines” and that they should just work with his airline or Easyjet. He’s probably right. So we think you should get used to packing some sandwiches and travelling light even if you are going long-haul!

Tagged on: ,

Leave a Reply

Your email address will not be published. Required fields are marked *