Ryanair planning to launch more new routes in 2010 than any other airline

RYANAIR has plans to start more routes this year than any other airline worldwide with analysts predicting it could return to aircraft buying in the coming years.

According to a report from airline analysts, Annoaero, Ryanair has already announced 146 new routes for 2010, with EasyJet second at 71.

Bloxham analyst Joe Gill said this underlines how important Ryanair and Easyjet are in the supply-demand balance across Europe.

“As such, their announced plans to sharply curb expansion over the next three years will have a material impact on how the market behaves, with yields likely to stabilise after an unprecedented 15- 20% fall during 2009,” he said.

Airlines around the world have revealed plans to start almost 600 new routes this year. Annoaero said that whether by year’s end, that reached 2,000 new services, as in 2009, remains to be seen.

Ryanair will be adding Bari, Brindisi, Oslo Rygge, Malaga and Faro as new bases in 2010, bringing the total number of bases to 39. European carriers feature seven times in the top 10 of airlines starting the most new routes. So far Annoaero has identified over 100 airlines plannings at least one new route this year.

Meanwhile Ryanair was downgraded to “hold” from “buy” yesterday at ABN Amro by equity analyst Andrew Lobbenberg. The target price is €3.50 per share.

Mr Lobbenberg said Ryanair’s growth plan to 2013 is “substantial” and any portrayal of the company as being ex-growth is “incorrect”.

“Looking beyond 2013, we think the company could continue to grow by increasing the utilisation of its fleet, which has fallen in the past two years, as the company chooses to underutilise the fleet in winter. Beyond 2013, we think the company could continue to open new routes, as it can recycle the aircraft serving its lowest quartile of routes or bases,” he said.

ABN Amro notes after lagging peers for most of 2009 up until the Christmas period, Ryanair’s share price rallied strongly through the holiday period, rising 21% in the past two months and rising 29% from its trough on 29 November. It said this rally was driven by the clarification on talks to planemaker, Boeing. Its shares fell 1.5% to €3.39 yesterday.

It expects the company to move its guidance moderately in its quarter three announcement next month.

It said Ryanair could return to the aircraft market, buying from Boeing and Airbus as well as buying a substantial used fleet as other airlines fail or shrink.

ABN Amro said the key handicap for Ryanair in 2011 will be from fuel, where it forecasts an 11% increase in unit fuel costs and a €275m or 33% increase in the fuel bill.