TALLINN - Ryanair, the popular budget airline started by Ireland’s Ryan family in 1985, will add Tallinn to its roster of destinations starting in December 2010. In a press release on Sept. 30, Ryanair’s Stephen McNamara said: “Ryanair is pleased to announce our first seven Estonian routes… will…offer Tallinn passengers really low fares for the first time. Ryanair’s Tallinn routes will deliver 300,000 passengers [per year] and sustain 300 local jobs. Estonian consumers/visitors can now beat the recession and escape the high fares charged by Estonian Air and airBaltic by choosing Ryanair’s lowest fares and our no fuel surcharge guarantee.”
Ryanair is one of the few airlines in the world that has shown consistent growth and profitability. According to their Web site, Ryanair currently operates more than 1,400 flights per day from 44 bases and over 1,100 low fare routes across 27 countries, connecting 160 destinations. After a restructuring in 1992, which left the company with only 6 routes, Ryanair bounced back and showed a steady growth in passengers, from 1 million in 1994 to 4.6 million in 1998 and to 66.5 million in 2009. The projection for the current fiscal year is 73.5 million passengers.
Ryanair’s strategy has been to fly cheap, short flights into and out of secondary airports while removing all the frills. Jostling for terminal space and landing rights at major hubs, such as Heathrow, is expensive and difficult. All available space is already used, and to expand would be a major endeavor for airports, and far beyond the power of influence of a then-small airline. So Ryanair flew to Stansted instead of Heathrow in London, and to Ciampino rather than Leonardo da Vinci Fiumicino in Rome. Customers caught on quickly that taking a shuttle to and from the less central airports was worthwhile for the huge savings, and were willing to forgo blankets, eye masks and lunches on board.
Fares can be as low as 8 euros, with an average cost hovering around 35 euros per one way flight. And occasionally some were pleasantly surprised to discover that the less popular airports used by Ryanair were actually closer and more convenient to home, work, or the destination of their travels. This cost-cutting has provided a clearly desired alternative for passengers who are looking to fly as cheaply as possible.
The arrival of Ryanair in Estonia is great news for some. Estonian travelers, job seekers and Tallinn’s airport will welcome the airline. Direct flights at a low cost will be operating from Tallinn to Dublin, Dusseldorf, Edinburgh, London (Luton), Milan, Oslo and Stockholm starting in December, and are available for sale as of Oct. 5.
The news is likely not welcome by local operators Estonian Air and airBaltic, which currently dominate flights out of Tallinn. According to Jurgis Sedlenieks, VP Commercial at SmartLynx Airlines, airBaltic has less cause for concern. “AirBaltic has lived through and survived harsh competition with Ryanair before, also on (profit-sparse) routes through Riga and has managed to push out the low-cost carrier from the market. That is because airBaltic has a high proportion of connecting passengers on their flights. (Ryanair specializes in direct destination flights). As Ryanair plans to execute short haul flight service, most likely airBaltic’s hub service through Riga will not be affected, as passengers will fly direct from Tallinn, traveling to many more destinations than Ryanair can offer.”
Sedlenieks continues that “Estonian Air may have a harder time, because they will compete for point-to-point passengers, such as Tallinn – Stockholm travelers, and will not have a competitive advantage to attract passengers to their flights. A further threat to Estonian Air, with their point-to-point approach, may be a change in Ryanair strategy to start servicing major airports instead of secondary airfields. This can lure away business travelers from Estonian Air.”
A former Austrian Airlines employee currently working in the Baltics as a general sales agent disagrees: “I’d say the most decisive influence of Ryanair activity on the market will be on airBaltic, as they situated themeselves on the edge of being a ‘regular carrier’ (interline agreements and code-sharing, CRS sales, etc.) and ‘low-cost carrier’ (baggage and check-in fees, no catering on board, etc.).”
The reactions to the news of Ryanair’s arrival will be mixed, as the news is not great for everyone. The expansion of Tallinn Airport’s possibilities may slightly weaken the strength and growth of Riga’s airport, as people no longer need to connect in Riga to travel to the 8 destinations offered by Ryanair. A former Ryanair employee currently working for a Czech carrier, who asks not to be identified, is skeptical of the overall effect of the airline on markets it enters, and that “Many staff who appear to be Ryanair employees are actually external contractors, working for extremely low pay and hardly any benefits. All the management violently pushes cabin crew to sell, sell, sell, and after each shift a meeting [is held] in order to discuss the average spending [per] passenger. The cabin crew’s average selling rate plays a heavy role in the possibility [of getting] a [Ryanair] contract or a promotion.”
“Ryanair is pushing down all the civil aviation labor and service standards, and local airlines will sadly need to do the same if they will want to survive. Competing against this will be extremely difficult due to [Ryanair’s] dominant position in the market,” adds the Czech employee. As frequent travelers can surely attest, low-cost travel, with its incessant inconveniences and myriad of small, irksome charges, certainly does have a price.