Michael O’Leary: Ryanair set for German dominance

Ryanair boss Michael O’Leary has said that the airline is on course to usurp Air Berlin as the second largest player in the German market behind national flag carrier Lufthansa.

Michael O’Leary: Ryanair set for German dominance

In a wide-reaching interview with German weekly newspaper Die Zeit, published today, Mr O’Leary said “we want to be the second largest airline in Germany behind Lufthansa”, adding that so-called low fares rivals in the country are only going in the opposite direction.

He predicted Lufthansa will ultimately close down its low fares offshoot, Eurowings, which is “doomed to fail because it cannot compete on price with us”.

Mr O’Leary also said he believes Air Berlin will be sold to Lufthansa, by its majority shareholder Etihad Airways in the next couple of years and that he hopes there will be a price war in the German air travel market.

Air Berlin doubled losses and lost eight million passengers last year despite being the market’s number two player.

Last year Ryanair said it would begin focusing on the German market as a means of fuelling short-term growth, at the expense of long-haul routes to the likes of Russia and Israel.

While the German travel tax has hampered growth, its appetite has been renewed on the back of it expanding its fleet in Italy and Spain — popular destinations for German travellers — and Air Berlin haemorrhaging passengers.

Ryanair recently said it wants to boost its share of the German market from 5% to 15%-20% within five years.

“We still object to the German air traffic tax”, Mr O’Leary told Die Zeit “but what has fundamentally changed in the last two years has been the implosion of Air Berlin whereby we now have most of the German airports actively offering us discounted airport services.

“Somebody needs to step into that breach; otherwise the Germans finish up paying overpriced domestic and short-haul air fares because they are left at the mercy of a duopoly of Lufthansa and Air Berlin.”

He said that via its ‘Always Getting Better’ product improvement programme, Ryanair has copied the best of what other airlines are doing, but without copying their high-fares structure.

“Low cost is our philosophy. Our average fare was €47 last year, but we dream that in the next five years we can drive that down to maybe €25. Lufthansa’s CEO Carsten Spohr has no interest in lowering air fares. He must put air fares up,” he added.

Ryanair recently said it is expanding in Germany particularly out of Cologne and Berlin faster than anticipated and could reach 10% market share this year. Overall, the airline wants to double in size in the next five to eight years.

Earlier this week, Ryanair reported a 43% rise in annual profits to €1.24bn and an 18% jump in passenger numbers to 106.4 million.

Mr O’Leary replied “God no” when asked by Die Zeit’s Claus Hecking about having any plans to retire before his contract is up for renewal in 2019 and spend more time with his family.

“No. My children think I am an idiot anyway, they think I am stupid, so that is fine. If your children do not think you are stupid at this age, then they will be useless anyway.

"I’d like to spend more time with my wife — but not while she has four children under the age of 10. So, I’ll wait until the children have grown up a little bit and then I will spend more time with my wife.” (www.zeit.de)

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