Ryanair added 138 jobs per extra million passengers 2011 – 2013, but claim 1,000 jobs are created per additional million passengers
Ryanair is putting out statements that in its deal with MAG at Stansted, to increase the number of Ryanair passengers by 50% over 10 years, that it will – allegedly – create 7,000 new jobs. This claim is based on an outdated, and very frequently trotted out, assumption that some 1,000 new jobs are created for each additional 1 million passengers flying on an airline. The full service airlines, flying a lot of first class passengers on long haul flights, have a high ratio of staff to passengers. The cheapest low cost flights, offered to European destinations by the no-frills airlines, do not. Recent figures from Ryanair’s annual reports, show that between 2011 and 2013, Ryanair had an extra 7.2 million passengers, but only 996 more staff. That works out as about 138 new Ryanair jobs per extra million passengers. Recent figures from EasyJet’s own data show that in 2012, for each additional million EasyJet passengers, there were 41 new EasyJet jobs. There will be some extra airport jobs, to support more flights – but the level is nowhere remotely near 1,000 per million. That figure is exaggerated at least 5-fold, or more. In reality Ryanair creates as few extra jobs as possible, because it shaves costs to the bone.
Ryanair employment data
Number of staff at EasyJet (from EasyJet data – see link ):
8,446 in 2012 (so 2.6% more staff than in 2011) 8,228 in 2011
Number of Easyjet passengers:
58.4 m pax in 2012 (so 7.1% more passengers than in 2011) and 54.5 m pax in 2011
so there were:
6,914 passengers per EasyJet staff member in 2012 and 6,624 passengers per EasyJet staff member in 2011
ie. 145 staff per million passengers at EasyJet. in 2012 and 151 staff per million passengers at EasyJet in 2011
EasyJet said they had 3.9 million more passengers in 2012 than in 2011.
So per additional million passengers:
If there were 3.9 million extra passengers, and 158 extra staff, then there were about 41 more staff per extra million passengers.
The budget airlines really are not great at generating a lot of extra jobs.
The reality is that this Ryanair deal for the next ten years will do little more than return Stansted to its 2007/08 peak, at which time the airport employed about 2,000 more people than today.
Highlighting the airport’s recent employment record, SSE points out that if the Michael O’Leary school of logic were to be applied, Stansted would have lost over 6,000 jobs in the past five years, in line with the fall in annual passenger numbers from 23.8 million to 17.6 million.
“Quite plainly – and thankfully – that scale of job losses has not happened,” said SSE’s economics adviser Brian Ross, “Michael O’Leary’s claim that 1,000 jobs are created for every extra million passengers is a wild exaggeration. In reality, low cost airlines generate about 300 jobs – including indirect jobs – for every million passengers”.
SSE has also expressed surprise at the about-turn which MAG appears to have undertaken to prop up falling passenger numbers. The airport has planning permission to handle 35 million passengers and 264,000 commercial flights annually and is currently operating at only half those levels.
“When MAG bought Stansted it said that it wanted to make the airport more broadly based, with more airlines and more destinations”, Brian Ross continued, “Ryanair already accounts for three quarters of all Stansted’s passengers and this deal will entrench Ryanair even deeper as the dominant airline at Stansted and reinforce the airport’s reputation as nothing other than a mecca for cheap leisure flights, especially since it comes on top of a similar deal that MAG did with easyJet a few months ago. In other words, this is just more of the same and MAG has done exactly the opposite of what it said it would do at Stansted.”
Brian Ross concluded: “In one respect however we can fully understand MAG’s decision to strike a deal with Ryanair: Stansted has run up losses of £206m in its past three financial years and in the past 12 months it handled its lowest number of flights for 14 years. Something had to be done and, ultimately, it’s a commercial decision for MAG to decide how best to use Stansted’s spare capacity.”
NOTE TO EDITORS
The £206m loss quoted above is for the financial years 2010-2012 inclusive, taken from Stansted Airport Ltd financial accounts, available from SSE upon request.
Stansted Airport’s latest traffic statistics can be found here.
Ryanair operations typically generate about 300 jobs (of which 138 are directly with the airline) for every million passengers handled, which suggests that an extra 7 million passengers per annum would generate about 2,100 jobs.
Despite the fall in the number of airport jobs in recent years – and the wider economic downturn – local unemployment levels continue to be remarkably low, amongst the very lowest in the UK. In August 2013, the total number claimants in the two local districts of Uttlesford and East Herts combined was 2,010 – just 1.6% of the potential working population, compared to a UK average of 4.4%.
7,000 new jobs for Stansted Airport as Ryanair reveals 10-year deal to increase passenger numbers by 50%
by SINEAD HOLLAND
Ryanair aircraft at Stansted Airport
AN estimated 7,000 new jobs could be created at Stansted after Ryanair this afternoon (Monday, September 16) announced major growth over the next 10 years.
The long-term agreement with Stansted owner Manchester Airports Group (MAG) will see the Irish budget airline increase the number of passengers it serves there by 50 per cent.
From the current level of 13.2 million passengers (Ryanair passengers) a year in 2012, the number will grow to more than 18m by 2018 and then to nearly 21m by 2023.
Stansted Airport is already the biggest single-site employer in the East of England region. Some 10,200 people currently work for the 190 companies based there, including 1,300 employed by Stansted Airport Ltd (MAG).
Ryanair chief executive Michael O’Leary said: “This deal will see our Stansted traffic grow by over 50 per cent … in return for lower costs and more efficient facilities at Stansted.
“This agreement proves how UK airports can flourish when released from the dead hand of the BAA monopoly and is the first dramatic initiative by MAG to reverse seven years of decline, during which Stansted’s [total passenger] traffic fell from 23.8m to 17.5m.
“As Stansted’s biggest airline, Ryanair looks forward to a decade of growing traffic, routes and jobs at Stansted.”
The 7,000 new jobs are estimated by Ryanair on the basis of research at international airports which shows 1,000 new posts are created for every one million extra passengers a year. [This claim is just nonsense – Ryanair creates as few extra jobs as possible, because it shaves costs to the bone].
Stansted’s single-runway capacity is 35 million passengers per annum – about twice its current level.
As part of the deal, the low-cost, short-haul carrier will encourage other airlines to fly long haul from Stansted, a press conference at Rubens Hotel in Buckingham Palace Road, London, was told.
The long-term growth agreement comes seven months after MAG completed its acquisition of the airport.
Ken O’Toole, MAG’s chief commercial officer, said: “The new long-term agreement between Ryanair and MAG at Stansted shows that competition really does work, and it represents great news for both passengers and UK businesses.
“The deal secures a new and exciting era for both Ryanair and Stansted, and we’re delighted to be supporting the airline’s growth over the next 10 years.
“We acquired Stansted in February believing we could significantly expand the services on offer by competing more effectively to make the most of the airport’s untapped potential and spare capacity. We were confident Stansted would grow if we offered great value to airlines, increased passenger choice and better services and facilities.
“Today’s announcement, coupled with our £80m investment in the terminal, confirms that Ryanair shares our confidence and shows how we are succeeding in transforming Stansted under new ownership.
“Stansted has a really bright future in providing international connectivity for the UK.
“Over the next five years, MAG wants to make Stansted the best airport in London, so we will continue to compete hard to win business from airlines in our drive for passenger growth and to provide customers with even more choice.”
Ryanair, Stansted’s largest airline serving more than 140 destinations during the past 12 months, has also announced four new routes from the airport for next summer.
The new destinations – not currently served from Stansted – are Lisbon in Portugal, Bordeaux in France, Dortmund in Germany and Rabat in Morocco.
Ryanair’s share price soared yesterday as the no-frills carrier announced a growth deal at Stansted which could boost the airport’s long-haul prospects.
The share price had fallen earlier this month after a profits warning, but news of the partnership with Stansted’s owner Manchester Airport Group (MAG) made international headlines and helped the shares rise by more than 4% to €6.44 in London.
The 10-year deal will see Ryanair increase its traffic at the Essex airport by over 50%, from 13.2m passengers in 2012 to more than 20m annually, in return for lower costs and more efficient facilities.
Reports also said the airline will offer cheaper flights from the airport, with Michael O’Leary, Ryanair’s chief executive, telling The Mirror: ‘We will be cutting our average fares to deliver this. We are the good guys.’
He said: ‘This agreement, which will create over 7,000 new jobs in Stansted, proves how UK airports can flourish when released from the dead hand of the BAA monopoly and is the first dramatic initiative by MAG to reverse seven years of decline, during which Stansted’s traffic fell from 23.8m to 17.5m.’
The Daily Telegraph noted how the deal ends a seven-year ‘stand-off’ between Ryanair, which accounts for 70% of Stansted’s traffic, as the airport’s former owner BAA ‘refused to countenance a commercial deal’.
The Guardian pointed out that Stansted recently signed a similar five-year growth agreement with easyJet and is in discussions with other airlines, including those with long-haul routes.
‘As part of the agreement, Ryanair said it would work with the airport to support connections with long-haul flights, although O’Leary did not provide details,’ added theGuardian.
However, The Daily Mirror reported that The Stop Stansted Expansion campaign group was opposed to the agreement.
Its economics adviser Brian Ross said he did not ‘understand the business logic’ behind the deal.
He told the Mirror: ‘It will simply entrench Ryanair even deeper as the dominant airline at the airport and reinforce Stansted’s reputation as nothing more than a cheap flights airport.
‘When MAG bought Stansted, it said that it wanted to make the airport more broadly based, with more airlines and more destinations.’
The Financial Times said the discount on fees for Ryanair was not disclosed, but analysts at Citibank estimate that Ryanair currently pays the airport a total of €8.40 per passenger, and a 10% discount would deliver savings of approximately €11m a year.
Ken O’Toole, MAG’s chief commercial officer, commented: ‘Today’s announcement, coupled with our £80m investment in the terminal, confirms that Ryanair shares our confidence, and shows how we are succeeding in transforming Stansted under new ownership.’
The airline also released its Stansted summer 2014 schedule with 120 routes, including four new services to Bordeaux, Dortmund, Lisbon and Rabat.