Ryanair is stepping up its attack on the Spanish market by opening two more operating bases in the country.
The low-cost carrier, which has established the broadest spread of operations across Europe of any airline with 20 bases in eight countries, is understood to be close to finalising deals to open new bases in Valencia and Alicante.
The expected move will intensify the fierce battle being waged in the Spanish aviation market, which has become the main focus for the expansion of the low-cost carriers in Europe after the UK and Germany.
Ryanair already has a base in Barcelona-Girona with nine aircraft and 49 routes, and in November last year, it opened one in Madrid, which has five aircraft and 15 routes to date.
The total Spanish network was forecast to rise to nine million passengers a year, including the new Madrid base.
EasyJet, the UK low-cost carrier, opened its first base in Spain in February in Madrid, where the airlines are taking advantage of the big increase in capacity at the capital's Barajas airport, which has doubled the number of runways to four and has opened a new fourth terminal.
The ferocity of the competition in the Spanish airline market was underlined on Friday when Vueling, a Spanish start-up low-cost carrier, which began flying three years ago, alarmed investors with the news that its net losses in the first six months from January to June had jumped fivefold from €6.5 million to €33.7 million.
Vueling only floated in December last year and its share price plunged about 30 per cent on Friday, closing €6.89 lower at €15.8. It blamed the scale of the losses on the price war, as its average fares fell a steep 23.4 per cent year-on-year in the second quarter, from April to June, from €51.85 to €39.71.
Vueling said much of the pressure to date on its Barcelona and Madrid bases was coming from Clickair, another low-cost airline launched by Iberia, the Spanish flag carrier, in an effort to fight back against the no-frills incursions into its traditional market, and from Spanair, a subsidiary of SAS Scandinavian Airlines, which is up for sale.
Ryanair said last week that it would ground seven of its 40 aircraft based at London Stansted, its main European base, for four months this winter to reduce the number of loss-making routes and in protest at a doubling of airport charges since April by BAA, the company that operates Stansted. The airline has not taken any action yet, however, to slow the flow of new aircraft it has ordered from Boeing.
- (Financial Times service)
