By Shane McGinley
Low-cost carrier plans to use Cyprus as a base to launch flights to Egypt, Jordan, Lebanon and beyond
Irish low-cost carrier Ryanair has made an offer to invest in loss-making carrier Cyprus Airways and is considering using the Mediterranean island as a base to expand into the Middle East, its CEO said.
The no-frills airline, which this week reported at 152 percent surge in first quarter profits to $264.7 million, is looking to expand outside its main European network.
Outspoken CEO Michael O’Leary said the Dublin-based airline had lodged an expression of interest in Cyprus Airways and was planning to apply for a license to offer low-cost flights from Cyprus to Tel Aviv, Beirut and the wider Middle East.
“We have submitted an expression of interest principally because the Cyprus government asked us to submit it. We are not particularly interested in Cyprus Airways, which has huge legacy issues and historic losses. We would however be interested in growing our business in Cyprus and we would be very keen to base additional aircraft there,” O’Leary was quoted as saying by The Telegraph newspaper.
“If we are going to put aircraft in Cyprus, we would need to have a Cypriot air operator’s certificate (AOC) so we could go from Cyprus into some of the Middle Eastern destinations.
“The problem for us is that once you go out of the EU we can only fly from Ireland because we go back to being an Irish airline with an Irish AOC. But there are other places where it would make sense to have some flights; from say Cyprus to places like Israel, the Lebanon, Egypt, Russia. So we’re looking at a Cypriot AOC.”
Rival low-cost carrier EasyJet already offers flights from the UK to Turkey, Egypt and Israel.
In July 2012, authorities in Lebanon told Arabian Business they were in talks with low cost carriers including easyJet and Ryanair about starting operations to the country in a bid to boost tourism levels.
Saj Ahmad, an aviation analyst at London-based Strategic Aero Research said the move was inevitable but he believed the Irish carrier would face stiff competition from existing low cost carriers in the region.
“Ryanair knows that the growth trajectory in Europe will hit the buffers within a decade and it makes sense that they'd look to open up new bases further south of the EU and tap into a cash-rich Middle East region where demand for low cost flights is exploding in growth all the time.
“Coupled with the fact that Ryanair will, by the end of the year, order anywhere up to 200 new Boeing 737MAX jets which have a greater range capability, launching flights from a base in Cyprus, Crete, Greece or even Turkey would allow them to penetrate traffic right in the heart of the GCC where the likes of flydubai and Air Arabia currently dominate proceedings.
“The real issue though for me is timing - this is not something Ryanair will start in the next couple of years. I suspect they wouldn't embark on this plan until the end of the decade. Easyjet will be the one that suffers most because it won't be able to compete with Ryanair if they sit back and do nothing. On the flip side, the relentless and furious growth at flydubai means that Ryanair, if it makes a move into their back yard, will not sit still either and they have the critical mass to ensure that Ryanair's Middle East foray will not be an easy one,” he said.
Earlier this year, Flydubai CEO Ghaith Al Ghaith rejected the idea of an ultra cheap no-frills carrier being set up in the Gulf, saying the diverse customer base in the region meant such a move was not viable.
It is not know whether Ryanair plans to offer flights to Dubai or the wider Gulf region and a Ryanair spokesperson declined to comment further when contacted by Arabian Business.
Ryanair already has some links to the Gulf as both it and Abu Dhabi’s Etihad Airways are shareholders in Irish government-backed carrier Aer Lingus. Ryanair owns 29.8 percent of Aer Lingus, while Etihad currently owns a 4.9 percent stake, having increased its share twice in the last six months.