INTERVIEW: Ryanair lands in Hungary to much fanfare

By bne IntelliNews April 17, 2012

Kester Eddy in Budapest -

Just hours after news broke on February 3 that Malev, the former Hungarian flag, had flown its last, the fast-moving Celts of Ryanair had ramped up earlier plans to reopen a base in the Hungarian capital, adding 26 new routes to the five already in the pipeline, and were being hailed in the media as a vital player in the recovery of the Hungary's air transport and tourism industry.

After a whirlwind weekend of planning - a case study if ever there was one of how to pick low-hanging fruit on the run - the Irish low-cost carrier was interviewing former Malev cabin crew and maintenance staff to man the expanded operations. As of early April, "something over 100" former Malev pilots were on the Ryanair books, Michael O'Leary, the carrier's outspoken chief executive, tells bne in an interview.

But if the Hungarian cabin crew thought the new jobs meant "business as usual," they were in for a shock. For a start, most will not initially be flying from Budapest. "This is a new base, and people at our new bases have to have been with the company for at least 12 months. It's an operational thing. The Malev pilots will be mixed across the fleet," O'Leary says.

And, "even if they come in with 5,000 flying hours" experience, all new recruits fly with training pilots for their first month. "Our flying is very tightly controlled. We have Formula 1 data telemetry on all our aircraft. We track around 60 [parameters], heights, track deviations, turbulence - everybody has to fly by the book. We don't need fellahs who fancy themselves as jet jockeys, breaking land speed records," says O'Leary.

Ryanair is not alone in employing Operational Flight Data Monitoring (OFDM), the system which tracks the vast array of flight data; but according to O'Leary, at most airlines these all-revealing records are controlled by pilots' unions - a total anathema to the Dublin-based carrier, which evaluates the downloaded flight data every night, and debriefs crews over any infractions the next morning. All part and parcel of "flying the Ryanair way," says the former accountant.

Wooden bench-mark

So, just over six weeks since the inaugural flight in February, how is this "wooden bench" (to use the Hungarian term for no-frills) operation panning out? Budapest is "probably the most successful start-up ever for Ryanair, with load factors in March at 76%, and 82-83% in April," O'Leary declares.

Sure, some destinations such as Palma had "crap" advance bookings, but "we chopped and changed about four routes" to adjust to the travel realities. "Funnily enough, Thessaloniki is our best performer, it has the highest advance bookings. Perhaps Hungarians go to Greece traditionally?" he enquires.

The launch has been far from plain sailing, though - not all Magyars, nor all Magyar institutions, are used to doing things "the Ryanair way." In particular, for several weeks Hungarian border controls insisted that incoming cabin crews disembark for passport checks, making the critical 25-minute aircraft turnaround time - a cornerstone of Ryanair's business model - impossible to achieve and exasperating the carrier's management. "These were Budapest-based crews. They have been cleared going out in the morning. They are not even technically entering the country. It makes no sense. We don't have to do this at any of the other 170 airports we fly to in Europe!" says an incredulous O'Leary, adding that after a meeting "with the minister," this issue has at least been "temporarily" resolved.

The carrier is now in negotiations with Budapest Airport to station two more aircraft and add more routes, possibly from the next winter timetable, but to do that O'Leary expects a better deal from the airport operator. "Budapest is out most expensive airport in Central Europe. There was not a lot of time for negotiating discounts because of the Malev collapse. We are talking to the airport about more growth, but for that we have to get a bigger discount, otherwise they won't get it," he says, bluntly.

That may not be so easy, given that the Hungarian parliament has just voted on re-assessing the land tax at the airport - more than tripling the tax bill for the foreign-owner Budapest Airport from €2.4m in 2011 to €7.9m this year. For an airport struggling to cope with the loss of it's biggest customer, that is some kick in the teeth. And it's the first O'Leary has heard of it. "That's stupid, it's a bit like the British introducing the APD [Airport Departure Tax] and raising it this year. It's making the UK uncompetitive," he says.

Yet while dealing with Hungary has been difficult - "I find them very strange; they are all supportive, but nothing gets done, it's all meetings" - the Irish carrier is at least flying to Budapest, unlike neighbouring Bucharest. "We talk to them, but it's a complete bloody mess. They have not really established what their airport policy is. They are closing Baneasa [to budget airlines], so everyone has to fly to Otopeni, and they won't give any discounts. So if we don't get a discount, we have no interest. It will come in time, but it's not a market of any interest to us at the moment."

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