The headlines in one of the local Budapest newspapers, which roughly translates to “Airport Hit Below the Belt” in reaction to Ryanair’s decision to cancel approximately 40% of its flying at Budapest. The photo of the airport worker with hands that almost appear in a defensive position for a kick to the groin emphasizes how some folks in Hungary have reacted to that decision, after welcoming Ryanair as the replacement for Malév, the now defunct Hungarian national carrier. While Ryanair has publicly castigated Hochtief, operator of Budapest Ference Listz (formerly Ferihegy) airport on fees, if one digs beneath the surface, a different story emerges.
If an objective observer took a good look at passenger traffic at BUD, the real reason for the Ryanair pullout becomes apparent. Ryanair was not achieving its target load factors on those routes, and as it normally does, quickly adjusts its route network when a route is underperforming. Funny how it always seems to be the fault of the airport, or regulators, rather than a lack of effective route development by the airline when it comes to Ryanair. Yes, they have been successful with their “take no prisoners” approach to competition, but are now finding route development to be more difficult with increased competition in Europe and folks who would prefer to travel to major, rather than secondary airports at key locations that aren’t an hour or more from where they want to go.
Ryanair cancelled 10 routes, on which only one had direct competition, Malaga with Wizz Air operating less frequent services. On four routes, Hamburg, Dusseldorf, Munich and Oslo, Ryanair used secondary airports (Lübeck, Weeze, Memingen, and Rygge, respectively) as opposed to the main airports. Lufthansa and Norwegian are stepping in with service to the major airports, which Malév formerly served. That leaves five routes in which Ryanair was without competition, and still couldn’t achieve its target 84% average load factor from Budapest. In the peak travel season in August, only Birmingham rose over that level, and then dropped back in September. Traffic to Karlsrue-Baded, Memingen, Weeze, Krakow, Thessaloniki, Bologna and Lübeck only generated load factors well below average and lower than Ryanair’s threshold for profitability, which is the real reason they were cancelled. But of course, ego prohibits Ryanair from ever admitting failure, so it blames airports, regulators, and anyone else it can find, except itself. Perhaps Hungarians don’t like to travel on crowded, uncomfortable aircraft?
In the interim, other carriers continue to fill the gap at Budapest, with Wizz Air offering new services to Tel Aviv, Geneva, and Kiev, SAS offering new service to Copenhagen and Oslo, and Transavia to Rotterdam being added to the schedule, and Lufthansa adding extensive services to Germany. Even with a reduced presence from Ryanair, Budapest has survived the “kick to the groin” and will do just fine, with or without Ryanair.
© 2012, Ernest S. Arvai. All rights reserved.