04/08/2011 Tirada: 579.249 Categoría: Inf General 4 Difusión: 444.300 Edición: English EL PAÍS, Thursday, August 4, 2011 Audiencia: 2.182.000 Página: 4 FEATURESAREA (cm2): 962,1 OCUPACIÓN: 89,2% V.PUB.: 28.974 BudgetNOTICIAS air travelEXCELTUR Does Ryanair’s business model depend on blackmail? The Irish airline is threatening to pull out of Spain’s provincial airports, saying they are unprofitable without further public money A. MARS / C. DELGADO / EL PAÍS year, after reaching a deal with Ryanair passengers in 2010 the Valencian regional govern- t a time when they ment that saw it receive must implement 643,432 ¤800,000, it began to increase drastic spending Santander flights. In the north of Spain, it A cuts, Spain’s regions 692,662 closed its operations in Foronda, face a tough choice. Santiago 4,615,164 just outside the Basque capital N/A Girona If they want to keep their provin- Lleida of Vitoria-Gasteiz, focusing on cial airports open, and keep the building up its presence in near- tourists and business travelers 740,750 by Santander, where it receives 198,612 370,485 Barcelona coming, they will have to contin- Valladolid official subsidies. Zaragoza 1,004,159 ue paying low-cost airlines and Reus Ryanair is also battling AENA regional carriers to do so. 4,801,246 on a number of fronts: in April it Ryanair has already an- Madrid 1,377,799 threatened to slash flights to Ali- nounced that from October it Valencia 1,611,191 cante by 80 percent this winter will no longer fly to Reus in Cata- Mallorca if AENA does not withdraw a lonia, cutting the airport’s traffic 626,585 ¤2-million increase in fees, Ibiza by half. Talks are underway 3,152,724 which has been imposed for the over whether the regional gov- 1,646,987 173,819 630,525 Alicante use of airbridges. “They think ernment will pay the Irish low- Seville Granada Murcia they have us by the balls. They cost airline to continue servic- are introducing new payments ing Girona airport. 189,156 2,113,374 177,832 — what they forget is that we are Ryanair is not the only com- Jerez Malaga Almeria an opportunistic company and pany that is paid with public we go where we can get the best money to keep provincial air- deals,” said Ryanair CEO Micha- ports operating. Spain’s short- 847,732 el O’Leary in typically robust haul carrier Air Nostrum re- Tenerife 602,040 26.6 million fashion at the time. ceives subsidies from Valencia’s Lanzarote IN TOTAL At first glance it would ap- (2010) regional government, as did 317,508 pear that Ryanair has the whip Vueling, initially, to fly into Llei- 682,457 Fuerteventura hand when negotiating with da. Gran Canaria small regional airports that But Ryanair is the biggest Source: in-house. EL PAÍS have come to depend heavily on player, servicing 23 airports in the low-cost operator. But it Spain alone. Spain, only 11 make a profit. should not be forgotten that Ryanair’s domination of Eu- Which raises a question: does Spain is a very important mar- rope’s low-cost routes dates Spain have too many airports? ket for Ryanair. Of the 73 million back to 1992, when the Europe- Ryanair seemed to be Giro- passengers who traveled with an Union’s deregulation of the na’s salvation when it ap- Ryanair last year, 26.6 million air industry in Europe gave car- proached the city in 2000. The did so to and from Spanish air- riers from one EU country the airport had struggled through- ports. right to operate scheduled ser- out the 1990s, surviving on char- Ryanair would find itself in a vices between other EU states. ter companies bringing tourists very different position if it had Although Ryanair trumpets into the Costa Brava. In 2002, to negotiate collectively with its back-to-basics, low-cost ap- some half-a-million passengers Spain’s airports. This is what proach, its business model is in came through; the following José Luis Zoreda, the vice presi- fact based on subsidies from Eu- year it saw a 173-percent in- dent of Exceltur, the lobby that ropean regions. crease in traffic. represents Spain’s main tourism Spain, which embarked on By 2008, Ryanair had 11 air- companies and airlines, believes an ambitious program of airport craft based in Girona, carrying should be the approach from construction at the same time, some 5.5 million passengers now on. has provided the perfect market from the airport throughout Eu- Ryanair CEO Michael O’Leary. “If Michael O’Leary had to sit for Ryanair’s expansion: it cur- rope, and more importantly for down in front of representatives rently serves 23 of the country’s the city and outlying areas: tour- from all of Spain’s regions at the by allegedly illegal public subsi- almost 50 airports, carrying ists from Europe to fill its hotels, Ryanair’s domination same time, this whole subsidies dies. more than 26 million passen- bars and restaurants. But there auction would come to an end,” “The Irish airline purports to gers a year. But now that it has was a hidden cost: subsidies of Europe’s low-cost he says. be the Robin Hood airline, which found a foothold in the country’s paid by the regional government routes dates back to For the moment though, offers unbeatably low prices, two main airports, Madrid and in the form of “tourist promo- each of Spain’s regional govern- compared to the inflated prices Barcelona, it is no longer that tion” to the tune of ¤7 million a the year 1992 ments must continue to negoti- of national carriers,” a senior Air interested in flying to the coun- year. Investment to increase the ate with Ryanair alone. Mean- France official said this week. try’s more remote destinations. capacity of Girona airport must while, its Catalan honeymoon “In fact, Ryanair is only flying Meanwhile, the larger players, be added to that figure. The Once established in seems over, now that it is ex- thanks to taxpayer money.” which were unable to match Ry- same model was soon applied to Spain, Ryanair put panding its presence in Barcelo- Ryanair dismissed the suit, anair’s low-cost offer, are unable nearby Reus airport, even closer na at the expense of the provin- which was brought under EU to step in. to the Costa Brava resorts, and pressure on regional cial airports. rules guaranteeing free and fair AENA, the Spanish airports then rolled out to the rest of the governments There are no global figures competition. “We pay no atten- authority, and the Public Works country. on the amount of money that tion to false claims from high- Ministry say they are no longer Once it had established itself Ryanair has received over the fares, fuel-surcharging airlines prepared to allow the payment in Spain, Ryanair began to put Ryanair. The company makes no last decade and a half from Eu- like Air France,” said the Ry- of subsidies to Ryanair. the pressure on regional govern- bones about its strategy: “There rope’s regions. In March of last anair spokesman Stephen Mc- “AENA provides the infra- ments to increase subsidies. are a lot of airports in Europe, year, Air France filed a com- Namara. “Ryanair is investing structure to all companies and Last year it announced that it but there is only one airline in a plaint with the European Com- millions in regional French air- charges the same amount to all,” intended to raise the number of position to operate out of Giro- mission in December, claiming ports, whereas Air France ig- says AENA. This is a model that flights into Girona and Reus, but na: us,” he added. The same ap- that Ryanair now receives ¤660 nores them.” works for the soon-to-be priva- then in July of this year the com- plies to Alicante, the Canary Is- million in public funds from lo- Ryanair has survived previ- tized entity: the subsidies are pany announced that it would lands and Zaragoza, to name but cal authorities in Europe each ous EU challenges to the “contri- paid by regional governments, stop flights to Reus and would three regional airports in Spain. year, including ¤35 million in butions” that it demands from but it receives revenue from Ry- cut the number of flights into Gi- The method has worked in France. Far from making a prof- local or regional councils for fly- anair for using its facilities. In rona by half. some cases. In 2008, Ryanair it in 2008, and a small loss last ing to regional airports. Air the case of Girona, it earned “We have failed to reach a drastically cut back its flights at year, Air France insists that Ry- France claims it has pieced to- more than ¤10 million last year. deal with the regional govern- Valencia airport, with the con- anair made a whacking de fac- gether the true extent of these Of the 48 public airports in ment,” said the deputy CEO of comitant drop in arrivals. Last to loss in both years, disguised “subsidies” by trawling through 04/08/2011 Tirada: 579.249 Categoría: Inf General Difusión: 444.300 Edición: English EL PAÍS, Thursday, August 4, 2011 Audiencia: 2.182.000 Página: 5 5 AREA (cm2): 873,0 OCUPACIÓN: 80,9% V.PUB.: 25.949 NOTICIAS EXCELTUR Budget air travel FEATURES Ryanair is threatening to cancel half of its flights to Girona airport (left).