Air Transport World

An Anglo-Saxon lead: The European no-frills, low-fare invasion is dominated by British Isles-based carriers; why is the mainland limping behind? (Competition).

When Ryanair launched its first continental base in April 2001 at Charleroi Airport, a smallish aerodrome in a remote part of Belgium some 45 km from Brussels, many observers--admittedly mostly in Belgium--doubted the Irish carrier would succeed. After all, the experiment had been tried before without success by EuroBelgian Airlines in the early 1990s. Even since Virgin Group acquired that failing airline in 1996 and rechristened it Virgin Express, results have been mixed.

Nevertheless, Ryanair proved the doubters wrong, declaring after a year of operations that Charleroi had been a "huge winner" with 1 million passengers carried. Beginner's luck? Maybe, but how then to explain Ryanair's strong performance at even-more-remote Frankfurt Hahn, a good 100 km from the city, which became its second continental base last February. The result "has even surprised ourselves," says CEO Michael O'Leary.

Ryanair's success, and that of easyJet and Go, which is being acquired by easyJet, point out an interesting fact of life in Europe: Successful low-fare carriers come out of the UK and Ireland and are exported to the continent. Analysts with whom ATW spoke offer a number of reasons, citing economics, geography, work ethic and even "cultural" factors.

"In many European countries, especially in central and northern Europe, staff costs are significantly higher than in the UK or Ireland, partly because basic airline wages are higher but more especially because social security payments and taxes are much greater," says Rigas Doganis, head of Rigas Doganis and Associates and a visiting professor at Cranfield College of Aeronautics. "In Belgium, employers must pay social and insurance costs which may be equivalent to 31% of an employee's salary, increasing staff costs by one-third. …

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