O’Leary wants to ‘wipe out’ tour operators
RYANAIR’s ebullient chief executive Michael O’Leary has set his sights on wresting the holidays business run by tour operators TUI (owner of Thomsonfly) and Thomas Cook.
The chief executive of the budget airline giant said that he expects much of the two million passengers the company is hoping to attract via its new routes will come from package tour operators who have traditionally put much of their business through Manchester Airport.
“I think we’ll wipe them out,” he said.
Ryanair yesterday announced that it would begin 17 new routes out of Manchester from October, which will rise to 26 from next summer.
This represents an investment of around £175m by Ryanair, which will employ around 450 people operating four planes based from Manchester by next summer.
The new routes will include popular Iberian destinations for tour operators including Alicante, Faro, Ibiza, Malaga, Palma and Tenerife.
“I would expect next year at Manchester for Ryanair and EasyJet to continue to grow by taking more passengers off the Thomas Cooks and the TUIs. Those big, expensive package models are over. They’ve no future here in Manchester or in the UK.”
Mr O’Leary pointed to a profit warning issued by Thomas Cook yesterday which saw its shares slump by more than 27% and said that package tours only worked on long-haul routes such as the US, Middle East and India as families booked more short-haul breaks directly with low fares operators.
In 2009, Ryanair withdrew eight of the nine routes it operated from Manchester in a dispute with the airport’s former management over passenger landing fees, but it has now signed a 10-year agreement which O’Leary said could eventually be widened to cover 40 routes within two years, with destinations in Spain, Italy and Morocco cited as potential further routes from Manchester.
“There’s a meeting of minds now,” said O’Leary. “They recognise they need us and we recognise we can’t have Manchester for nothing.
“The opportunity to really go and bury the tour operators is one of the reasons we’re paying a little bit more in Manchester.”
The Manchester City-supporting O’Leary also predicted pain for other low-cost operators from the airport.
“It means you’re going to have very low-cost airlines from Manchester. I think Easyjet and Jet2 were hoping that Manchester would keep us out. And we’re really going to stick it to them.”
He predicted that 60% of the traffic on the routes would be in-bound, giving visitors from cities in Europe easier access to the North West. However, he said that he did not envisage any impact on nearby Liverpool John Lennon Airport, adding that it expected to announce more routes through Liverpool next summer.
“It’s terrific news for tourism and the local economy.”
O’Leary said that he expects to take traffic from other low-cost operators on routes from Eastern Europe and on some of the European capital city routes like Madrid and Rome which British Airways abandoned when it retreated from Manchester to its Heathrow hub three years ago.
“They (BA) were pulling out when they were charging £400 or £500 a fare. They said there isn’t much of a market here…well, there isn’t at those fares.”
