A Squeeze of Orange?

The European aviation scene is an interesting one at the moment with a lot of movement between the big players. There are those who are going to miss out, and those which could potentially make large capacity gains, leaving just three of four groups.

With the ever increasing attempt of creating a more ‘upmarket’ image Ryanair are really the ones to watch. They have an extraordinary amount of aircraft on order, not just to replace the current fleet, but to add it making it the largest carrier in Europe. The assault at going upmarket is going to spill over into serving primary airports, something their business plan has avoided over the last 20 years.

We have already seen this happen in some markets, they already have some slots at Amsterdam, as well as Barcelona El Prat, Madrid, Brussels, Copenhagen, Milan Malpensa, Rome Fiumicino, Athens and Lisbon. It is not co-insidental that easyJet also operate from all of those airports and have bases in the majority of them. This challenge is only ever going to increase from Ryanair, but its not just them, there is also some serious challenges now by IAG owned Vueling, who are also muscling in on historically easyJet bases.

easyJet have always been strong in the UK market. They first set up camp at Luton airport in the mid-90’s, and then expended to Gatwick, before buying Go which gave them other bases at Stansted, East Midlands and Bristol. Another purchase, this time BA franchise partner GB Airways gave them a stronger hold at Gatwick and Manchester, with FlyBe slots at Gatwick enhansing their portfolio. So, yes, easyJet have a strong position in the UK, especially at Luton and Gatwick.

Abroad, easyJet has had mixed sucess. They have long held their base at Geneva which is very sucessful, as is Paris. There have however been some failures: Madrid was closed as a base, so was Rome recently and East Midlands which was a difficult market.

The recent base closure of Rome is an interesting one, where both Vueling and Ryanair deceded upon them forcing easyJet out. It also saw the end of the much heralded at the time Linate to Fiumicino shuttle which they won rights for, only to be closed shortly afterwards. Making the case that the aircraft were better off at new bases Venice, Naples and at their historic Italian base in Milan Malpensa it isnt going to be an ‘easy’ ride there either – especially at Milan, where Ryanair is trying hard to compete head to head.

It is not just abroad though where the challenges are being felt. You just have to look at the first ever easyJet base at Luton. They really do have the upper hand at the airport, complimenting Wizzair who operate to eastern Europe extensively. With a low cost wing opening, Copenhagen had been hoping it would attract low cost carriers to the airport with incentives to fly there. It worked and both Ryaniar and easyJet set up a Luton to Copenhagen schedule – from nothing to a crazy 8 flights per day between them. The fares are extremely low and seem to be attracting passengers, although it cant do anything for the yield for either airline, sometimes you can get seats for £20 return.

Despite going up against Monarch on some sunshine routes from the beginning, it is now Vueling who are getting in on the act up against easyJet coming to their home turf. Not only that, but the three routes already announced are all going toe for toe against the orange airline. This summer IAG-backed Vueling will operate twice a day to Amsterdam and Barcelona, with a six time a week service to Zurich. One would assume further routes are planned to link their bases – maybe Rome or Madrid could be on the cards for the winter. Air France and KLM backed Transavia will be operating Luton to Paris Orly this summer, going up against easyJet’s Charles de Gaulle service.

It is going to be tough for easyJet where they don’t already have the upper hand to compete with the ever unstoppable Ryanair, and Vueling – the newcomers on the scene with big backers. It doesnt have the cost per seat advantage Ryanair has to have low prices, doesnt have the same number of aircraft on order, and doesnt have the distribution channel IAG can provide Vueling.

Gatwick will remain strong given their slot position, although a number of routes have already been dropped given competition from other London airports – notably in Germany including Cologne and Strasbourg.

At airports like Milan Malpensa, Amsterdam, Lisbon and Zurich, they are a lot more exposed to advansing airlines.

It is going to be an interesting couple of years, but surely a lack of ambition won’t derail one of the most iconic airlines in European aviation.

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