The announcement that Ryanair is to cut further routes and jobs in Dublin due to ongoing cost cutting is the most recent in long line of airlines doing similar across Europe as they struggle to cope with the economic downturn. Ryanair is, of course, exceedingly profitable, which is most unusual in the airline industry, it is one of very few airlines that make any money. Most, in fact, lose huge amounts every year – even in the good times.
This latest move by Ryanair, however, highlights a problem that has been faced in the past, and will be faced in the future by a significant number of overseas buyers. How do you get to your property if the flight route on which you were dependent is suddenly discontinued or the airline providing the flights goes to the wall.
It is easy to gloss over how much of a problem this could be in the coming years because, as a nation with a burgeoning wealth in the early part of this decade, Ireland saw exponential growth in the availability of flight routes from all Irish airports. We were inclined to take for granted that these new routes, which literally popped up weekly, would stay forever. However, very little credence was given to the fact that the vast bulk of these new routes were being provided by a single company…Ryanair. It is an ironic situation – unless you can’t fly to your chosen destination – that the airline that likes to take on the authorities and the monopolies, in fact, essentially operates a monopoly in the low fares sector of the Irish market. In case you think this is a case of being wise in hindsight, my first article on this issue was written on April 22nd 2007. It is an issue that has been in gestation for some time.
You need not pay much heed to Mr. O’Leary’s indications that his latest round of cuts in Dublin is to do with the contentious ‘departure tax’. It is no such thing, it simply suits him to have a broadside at the Irish government when he is, in fact, moving his planes to airports with larger surrounding populations. Ireland is, and always was, too small for Ryanair’s expansion plans. It is, essentially, carrying out its growth plan as it always intended to – by moving planes to airports where they can maximise their profit.
The maverick airline is, of course, the darling of the aviation industry. It has taken chances which have paid off at every turn and has taken the concept of the ‘budget airline’ into a new realm. It has also embarked on an expansionist policy of launching new routes which has never before been seen in the history of European aviation. Ryanair boss Michael O’Leary’s comments on the issue of routes being cut will, however, not fill overseas property owners with much cheer. “We don’t have any obligation to second home owners that we are always going to carry you there for ever and a day. Please don’t ask me to feel sorry for rich people with second homes in France.”
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