Ryanair to have one flight per week to Tenerife in winter from Cardiff airport

The recent announcement that Ryanair is returning to Cardiff Airport, even though they operate into Cardiff’s close neighbour, Bristol Airport, has been taken as a sign that after a return to the public sector, Cardiff Airport is now returning to success.

Ryanair has been seen as the holy grail for passenger numbers at Cardiff Airport, just get Ryanair to the Airport and all the routes and passengers that we want will be delivered. Of course, as the largest low cost airline in Europe, Ryanair cannot be ignored.

However before we all get out the atlas to find out if Ryanair can get us anywhere near our destination and scramble for our low cost seats, can Ryanair and more importantly should Ryanair be the answer to all our prayers?

We shouldn’t become too excited at this stage, Cardiff will have one route, once a week to Tenerife during the winter. However, there is a wave of optimism that this one route will develop into a network that will improve the airline offering at Cardiff.

There is, however, a history to the relationship between Ryanair and Cardiff Airport. Ryanair had a very successful route between Cardiff and Dublin from 2001 to 2006. The departure of Ryanair followed a reported disagreement with the airport over airport charges.

At this time Cardiff Airport was heading towards its highest ever passenger numbers and was profitable.

 It was possible that Ryanair could develop more routes but at a cost of lowering aeronautical income at a time when Cardiff Airport had airlines that were willing to pay higher rates.

Cardiff already had a low cost airline, bmibaby, that wanted to expand. Indeed, the airport expanded past 2 million passengers a year but bmibaby didn’t continue to expand in a way that was expected and capacity increases by the airport were not matched by the airline.

Ryanair expanded rapidly by negotiating low charges at airports that they wanted to operate from. Airports had to be hopeful that income would rise once these cheap deals expired.

Ryanair wanted to extend these cheap deals to maintain a low cost base and continued to maintain pressure on airports by withdrawing from airports that raised their charges. Government also became a target where Ryanair didn’t like new taxes and charges.

The effect on secondary airports could be extremely severe where Ryanair operated the majority of the flights. Ryanair could make these threats because of the mobility of aircraft and their ability to sell new destinations through the internet.

The loss of Ryanair had two effects upon Cardiff Airport. Firstly the nature of the Dublin route changed. It went from being a low cost airline route encouraging visitors to both cities to a regional airline route serving business passengers and encouraging passengers to transfer onto long haul services at Dublin.

Secondly, Ryanair decided to establish routes at Bristol Airport, Cardiff’s closest competitor airport that had already experienced faster growth than Cardiff due to low cost airline, Easyjet. Cardiff Airport was losing a low cost route, at the same time as their main competitor gained another low cost airline.

So why do Ryanair and Cardiff Airport need each other again? It is obvious for Cardiff Airport. Although they have replaced the routes that used to be operated  by bmibaby, they haven’t replaced the passenger numbers. Vueling, the airline that has become the main low cost airline at Cardiff does not have the market penetration achieved by Ryanair.

Ryanair may be Europe’s biggest low cost airline but it still needs to look for new opportunities for its ever expanding fleet. Other low cost airlines such as Easyjet and Vueling want to expand their market share and will offer services that can compete with the legacy carriers to do so.

So they will offer flights that use major airports to get you closer to your destination, allocated seats and the option to alter reservations before the flight.

These carriers are offering what the market wants and suddenly Ryanair, with the attitude of we’ll get you from A to B but sometimes with penalty charges, take it or leave it, looks out of step.

Ryanair has now seen the opportunity of appealing to the business market and this will improve the experience for all passengers.

So, yes, Ryanair is an opportunity if the passenger numbers on the new route convince Ryanair to develop even more new routes. However Ryanair would need to deliver substantial passenger numbers to compensate for the lower charges that will be paid.

It would also be necessary to maintain the existing carriers as competition so that Cardiff doesn’t become an airport totally reliant on a single carrier that is using market power to continuously drive down airport income.

Ryanair confirms new route at Cardiff Airport

http://www.walesonline.co.uk/business/business-opinion/so-can-cardiff-airport-low-cost-7250121

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Cardiff to Anglesey air link continues to get large government subsidy as bus grants are slashed

March 31, 2014

The Welsh Government has defended a big increase in subsidy for the North-South Wales air service while it cuts funding for lifeline bus services. From 2010-11 to 2012-13, subsidy for the flights between Anglesey and Cardiff increased by 37.2%. Subsidy was £184 for each passenger who used the service in 2012-13. Over the same 2-year period, the Welsh government reduced its grant to councils for unprofitable bus services by 29.2%. At least 94 bus routes have been withdrawn since 2011. Other services are under review because subsidy per passenger exceeds £2 or £3. The Welsh Government has been reviewing bus funding since early 2012 – but has not evaluated the air service’s costs and benefits since the global financial problems and major reductions in public-sector budgets. The route from Cardiff to Anglesey has 2 flights each way, each weekday, and there were almost 15,000 passenger journeys in 2008-09, but only 8,406 passenger journeys in 2012-13. Subsidy for the air operator and the civilian air terminal at RAF Valley on Anglesey increased from £1.08m in 2008-09 to £1.55m in 2012-13.     Click here to view full story…

Welsh Economy Minister says Cardiff Airport likely to return to profit only in ‘long-term’

March 21, 2014

The Welsh Economy Minister, Edwina Hart, has said that Cardiff Airport – now in public ownership – is likely to return to profit eventually, but not in the short term. She said its downward spiral is no longer continuing. The airport finally becoming profitable is a “long-term” strategy. She was giving evidence to the National Assembly’s Enterprise and Business Committee on the airport, which was bought by the Welsh Government for £52m at the end of 2012. Ms Hart suggested there wouldn’t be a quick sale of the airport back into the private sector, which the Scottish Government is seeking for the newly-nationalised Prestwick Airport in Ayrshire. Pressed by the Plaid Cymru economy spokesman on when the government expected the taxpayer to recoup its investment. She said the Budget announcement for support for regional airports to set up new routes would apply to Wales and that they would “wait for the detail of it”, but confirmed the Welsh Government is likely to bid in for funding. Chancellor George Osborne announced a £20m annual fund will be used to encourage new routes from regional hubs like Cardiff.

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Cardiff Airport shuttle bus from Cardiff centre to attract more traffic averages 4 passengers per journey

February 7, 2014

A shuttle bus to transport passengers from Cardiff centre to the airport has carried on average fewer than 4 passengers a journey since its launch in August 2013. The service is funded by the Welsh government, with the cost suggested to be around half a million ££s. The bus runes every 20 minutes and has so carried an average of 2,778 passengers a week. Last month the Conservatives said the service was “unsustainable”. A review of the service has been carried out by Prof Stuart Cole from the University of South Wales. Cardiff airport was bought by the Welsh government for £52m in March 2013 and the bus service is part of the strategy to reverse a slump in passenger numbers.A local MP said: “At almost half a million (pounds) in Welsh Labour government subsidy, that’s an exceptionally expensive service to support and on current passenger numbers is simply unsustainable.” But a Cardiff Business School transport expert said such services were needed to convince airlines there would be passengers available. “Airlines planning cycles are such that they’re not just going to start routes instantly. It’s going to take [6 – 12] months, to attract routes into the airport and, therefore, it’s a bit like the chicken and egg.”

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Sec of State for Wales says South Wales to Heathrow rail link would provide major economic boost

November 7, 2013

Secretary of State for Wales David Jones has said a £500m direct rail link between Heathrow and South Wales would be a major economic driver for the area. He said better infrastructure would play a crucial role in growth of the Welsh economy. Last year the UK Government outlined its commitment to the Western Rail Access scheme – a new rail link which will cut 30 minutes off the journey times from South Wales. Network Rail is currently looking at options for the proposed spur, including direct services from South Wales on the Great Western Main Line into Heathrow, or providing a separate shuttle service from Reading. And David Jones added the standard speil about “Fast and convenient links to our major airports are crucial as we look to compete in the global race.” What race? Colin Matthews said 8.8% of the 1.3 million people in the UK working for foreign-owned firms that use Heathrow are from Wales.      Click here to view full story…

Cardiff Airport is bought by the Welsh government for £52m (over-priced?)

March 27, 2013    The current owner of Cardiff Airport, Abertis, which bought the airport from local councils in 2005, has now managed to sell it to the Welsh Government for £52 million. That price is well above market value when compared to recent transactions involving UK airports. The airport was valued at about £34 million in 2010. It has been making large losses and losing passengers for many years. The Government is desperate that it gets more passengers and gets back to making a profit. Welsh First Minister Carwyn Jones said it would not be operated by the government and would be managed “at arm’s length” and “on a commercial basis”. Cardiff’s passengers have declined from around 2 million in 2007 to just over 1 million in 2012, as many have chosen Bristol airport instead. Bristol airport is now concerned that Cardiff would now unfairly benefit from state support. Cardiff was hit by the loss of bmibaby in 2011. The airport’s board will try and get in a commercial operator and hopes to attract long haul and transatlantic flights. Only recently there was news that Swiss airline Helvetic will pull out of Cardiff, 2 years after the Welsh government spent £500,000 marketing Wales in Switzerland.    Click here to view full story…

Welsh government buying Cardiff airport from Abertis in £50m cash deal by the end of March

February 21, 2013      The Welsh Government is expected to complete its acquisition of Cardiff Airport by the end of March in a straight cash deal understood to be around £50m with current owner Abertis. A due diligence process is being undertaken on behalf of the Welsh Government. The deal will not see the Welsh Government taking on any debt at the airport – which posted pre-tax losses of just over £300,000 in 2011. In the short to medium term the Welsh Government would need to inject about £6m a year in capital expenditure and airline route development support – including agreeing to underwrite any losses in the first few years accrued by airlines establishing new routes out of Cardiff. ie public subsidy. It is understood that representatives of the Welsh Government have already sounded out a number of low cost airlines over setting up operations, including Ryanair – which was asking too much. Discussions are continuing. It is unlikely that the airport, post deal, would be directly owned by the Welsh Government but by some special purpose vehicle instead.   Click here to view full story…

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