Ryanair demands incentives to become Slovakia's "national carrier"

By bne IntelliNews April 11, 2013

bne -

Irish budget airline Ryanair could become Slovakia's de facto national air carrier as it mulls establishing a base in the country from which to boost its Central European operations. However, similar to other investors in the country, the airline says it intends to pump Bratislava for incentives.

Europe's biggest discount airline hopes to boost passenger numbers on routes to Bratislava - which it advertises as also serving Vienna - and is in talks about basing planes in Slovakia, CEO Michael O'Leary told reporters on April 10. "We plan to set up a base in Bratislava next year or in 2015 that will enable us to raise passenger numbers from more than 875,000 last year to up to 2.5m," O'Leary said, according to AFP.

Ryanair recently ordered 175 Boeing 737-800 planes in a major fleet expansion that will bring its total number of aircraft to 400 as it targets expansion in CEE. The company was quick out of the blocks when Hungarian flag carrier Malev was grounded in February 2012, filling some of the empty slots at Budapest Airport that the bankruptcy opened up.

Ryanair serves Bratislava from 16 locations, among them London and Rome, and ranks as the top carrier to the city after starting operations in 2005. The main Slovak airport's capacity jumped to 5m passengers a year from 2m after a recent upgrade, but it recorded its fourth consecutive drop in passenger numbers, to 1.4m, in 2012.

A major plank in Ryanair's ambition to expand Slovak operations is that it claims the Bratislava route also serves the Austrian capital, which sits around 60 kilometres down the road. Meanwhile, Slovakia has no airlines based in the country. It has had no flag carrier since Slovak Airlines - created in the wake of the break-up of Czechoslovakia in 1993 - ceased flying in 2007, while other budget airline start-ups have come and gone in recent years.

"Other low-cost carriers are looking for markets where they don't need to compete with Ryanair," O'Leary claimed, when asked about the recent move by peers to expand outside EU markets. "Once you go outside the European Union it's a regulated market - you need to get permission from some Middle Eastern government. We don't want to grow in the Middle East; we want to grow in Europe."

"We'd like to see some of these airplanes based in Bratislava," he said of the fleet additions, adding that any final deal on a base in Slovakia would depend on the level of incentives on offer from Bratislava.

Ryanair joins a growing line of potential and existing investors calling for incentives, and a challenge to a government struggling to raise the tax revenues needed to meet ambitious fiscal targets. With Slovakia's economic development over the last decade or so almost entirely dependent on attracting foreign investment, Bratislava is now facing demands from several to top up incentives or risk losing them. That has seen the left-leaning Prime Minister Robert Fico forced to haggle with large international companies over how much the struggling Slovak budget can afford to offer.

Last month, the PM announced that he had finally thrashed out a deal to persuade US Steel not to sell its Kosice plant - the country's biggest employer. On April 9, German tyre maker Continental announced Slovakia has beaten off regional competition to attract a €250m investment in a new plant. Neither the company, nor Fico, were willing to discuss the potential level of incentives on offer.

Related Articles

BOOK REVIEW: “Europe’s Orphan” – how the euro became a scapegoat for policy ills

Kit Gillet in Bucharest - The euro, conceived as part of a grand and unifying vision for Europe, has, over the last few years, become tainted and often even blamed for the calamities that have ... more

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss