RYANAIR Europe’s New King of the Skies

The rapidly expanding Irish budget airline has cruised ahead of struggling Lufthansa to become Europe’s largest airline in terms of passenger numbers, confirming previous reports.
Lufthansa has been left behind by its arch rival.

It’s now official. Ryanair has won Europe’s battle for the skies, surpassing the establishment giant Lufthansa as the continent’s largest airline in terms of passengers served in 2016.

The fiercely competitive Irish budget airline served 117 million passengers in 2016, a 15 percent increase over the previous year.

Lufthansa and its subsidiaries – Eurowings, Swiss and Austrian – served 109.7 million passengers, an increase of just 1.8 percent over 2015, according to figures released Tuesday. The German airline, however, remains Europe’s largest airline by revenue.

Ryanair, with its spartan business philosophy and lean corporate structure, has been able to outmaneuver Lufthansa.

Handelsblatt reported earlier in the month that Ryanair was on its way to beating Lufthansa, but at that point, the German airline's passenger numbers for December had not yet come in.

Ryanair, with its spartan business philosophy and lean corporate structure, has been able to outmaneuver Lufthansa, which has become bogged down by its complex web of subsidiaries that span Europe. Those complexities are only likely to get worse if Germany's flagship carrier follows through with a proposal to take over the troubled Air Berlin, the country's second-largest airline.

Lufthansa CEO Carsten Spohr alluded to those complications on the sidelines of an airline conference in Frankfurt Tuesday, saying he sees a series of problems standing in the way of any Air Berlin takeover, ranging from high labor costs to high debts and possible anti-trust concerns. While the German government is reportedly pushing for the deal, which would avoid a possible Air Berlin bankruptcy if its Middle Eastern stakeholder Etihad decides to pull out, Mr. Spohr said their were anti-trust authorities, also in Europe, could still stand in the way.

Meanwhile, the cut-throat budget carrier Ryanair is also threatening Lufthansa on its home turf, Frankfurt Airport. Ryanair plans to start flying from Frankfurt Airport this summer instead of the remote Frankfurt-Hahn regional airport in Hunsrück.

Lufthansa has tried to beat Ryanair at its own game, shifting many services to the budget subsidiary Eurowings. But this strategy has triggered crippling strikes by Lufthansa pilots, who fear wage and benefit cuts. Thousands of Lufthansa flights have been cancelled in recent years due to the intermittent walkouts.

 

Spencer Kimball is an editor with Handelsblatt Global. Jens Koenen of Handelsblatt contributed to this story. To contact the author: s.kimball@extern.vhb.de.

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