Ryanair and EasyJet are targeting markets where competitors have made deep cuts to grow as Europe emerges from the Covid-19 pandemic.
Topping that list are destinations in southern Europe. Speaking at the Airlines for Europe Aviation Summit on March 31, Ryanair Group CEO Michael O’Leary named Italy where Alitalia was replaced by half-its-size ITA Airways last October, and Portugal where TAP Air Portugal has made dramatic cuts, as well as Spain and Sweden, where the Irish discounter is growing. And EasyJet CEO Johan Lundgren listed airports in Italy and Portugal, including Milan Linate and Porto, where the UK-based airline has acquired up slots.
“We have liberally spread [our new] aircraft across Europe,” said O’Leary citing the 65 Boeing 737-8200s that Ryanair plans to take in 2022.
Ryanair has long made it clear that it would grow out of the crisis. Last July, O’Leary said he had never seen as much of a growth opportunity as presented by the pandemic. He dismissed competition from EasyJet and Wizz Air, both of which also plan to grow in the recovery, pointing to the fact that Ryanair had more aircraft on order and simply could grow more.
Lundgren is more measured about EasyJet’s growth plans. Rather than focusing on aircraft deliveries — the airline will take eight Airbus A320neo family aircraft this year, and another seven in 2023 — he is focused on acquiring slots and growing at key airports, expanding EasyJet’s seasonal bases, and growth by shifting to larger aircraft. EasyJet raised £1.2 billion ($1.6 billion) in September to fund its expansion.
“We’ve got plenty of opportunities to grow,” said Lundgren. He added that the airline can grow without “entering into new markets with the risk and the time it takes for those markets to mature.”
And Wizz Air is splitting the difference. The airline is upgauging by replacing smaller A320s with new, larger A321neos that, as CEO József Váradi said in January, will lift its average seat count per flight to 250 in the coming years from 211 this summer. In addition, Wizz has a robust orderbook that parent Indigo Partners topped off in November when it ordered another 102 A321neo and A321XLR jets fro the discounter.
Portugal is one country where EasyJet and Ryanair are facing off. The country is a “trendy” destination, as TAP CEO Christine Ourmières-Widener described it at the summit, with visitor numbers rising dramatically in the years before the pandemic. However, the crisis has been tough on the country’s national carrier, and it will operate 15 percent fewer flights in the third quarter than it did three years ago, according to Cirium. Notably, European departures will be down nearly one-fifth when many of its network peers, including Iberia and KLM, will be back at 2019 levels.
Both EasyJet and Ryanair plan double-digit departure growth in Portugal in the September quarter compared to 2019, Cirium shows. And in Porto, a city where TAP’s cuts are particularly deep, EasyJet operate 49 percent more flights this summer, and Ryanair nearly 7 percent more. O’Leary said his carrier would be even larger in Portugal this summer were it not for what he has described as “slot squatting” by TAP in Lisbon.
And in Italy, both airlines have made strides that play to their strength. EasyJet will offer three times more departures from Milan’s close-in Linate airport in the third quarter than it was in 2019, and Ryanair flights from the country — where it has added numerous new bases, including in Turin and Venice — will be up 44 percent, Cirium shows. And, keeping to form, O’Leary brushed off Wizz’s expansion in the country and said the airline is “struggling” in the country.
Europe’s three big discounters plan to be larger in the third quarter than they were three years ago. EasyJet capacity is scheduled up nearly 7 percent, Ryanair up almost 16 percent, and Wizz up more than 42 percent, according to Cirium. However, schedules remain in flux more than one or two months out, and the airlines’ summer plans could change.
EasyJet and Ryanair’s growth plans come as European airlines look forward to a strong summer travel season. Despite concerns from O’Leary that more adverse news like the war in Ukraine or another Covid surge, airline CEOs at the summit expressed a decidedly bullish outlook. Bookings are at or near 2019 levels for the Easter holiday in mid-April, and are approaching levels last seen three years ago for the summer. The area of weakness most cited was demand to — but not necessarily from — Eastern Europe since Russia invaded Ukraine in February.
“If there is one particular area of strength, particularly for easter, it’s the beaches of Europe — Portugal, Spain, the Balearics, and Greece,” said O’Leary. That bodes well for the airline’s, and EasyJet’s, growth to Portugal and other southern European countries in the recovery. It also continues the pandemic leisure-first recovery that has favored outdoor-oriented destinations like beach markets.
Asked about the conflict in Ukraine’s impact on EasyJet, Lundgren put it simply: “We are not affected.”