Flying High: Ryanair in Spain

Which airline takes more passengers to Spain than any other? It isn't Iberia, it isn't Vueling, it wasn't Spanair. It is Ryanair. The Irish airline doesn't simply carry more passengers than other airlines, it does so by a staggering margin of five million over its closest rival (Iberia). Over 17 million travellers used Ryanair in 2011. And the airline still manages to get it in the neck.

To the let's-give-O'Leary-a-lashing tedium that emanates from the UK now comes a strain of Spanish xenophobia. O'Leary, and it is as well, possesses a thick skin. He seems not to give a toss, and nor should he. Take away the passengers that Ryanair carries, and there would soon be howls of complaint way more vocal than any directed at the Irish airline.

There are all sorts of reasons why Ryanair is reviled and they boil down to an impression (if not always a reality) of playing fast and loose with rules, be they to do with subsidies, charges or industrial relations. Whatever the truth of the accusations that are constantly levelled at the airline, the fact is that it works, and works well. And it's this that many people can't stomach.

Former Spanair workers who gave O'Leary a hostile reception in Bilbao, one which, in true O'Leary fashion, he turned to his advantage, were protesting at a perception that their loss of employment is all down to Ryanair. It is a perception that has been whipped up from various sources, not just Spanish, but the whiff of xenophobia is unmistakable, and O'Leary's triumphalism hardly did anything to make it go away.

Attempts to somehow implicate Ryanair in Spanair's collapse are fallacious. Yes, it represented competition that Spanair found difficult to counter, but Spanair's fall was, as I have said before, the consequence of weak financing. It was also a consequence of having failed to apply an adequate strategy to take on Ryanair, unlike Vueling, which has. O'Leary didn't need to do anything, other than just wait in the wings for Spanair to go belly-up and then come to the rescue by adding ever more wings of his own flying around Spanish air space.

Spanair's demise was indicative of two issues which go wider than the airline industry, as they are indicative of Spain as a whole. One was industrial relations and the role of the unions; the other, a lack of competitiveness.

Ryanair has not exactly won a lot of friends with its fiercely anti-union stance. It is known, of course, that there is discontent among some Ryanair personnel, but the fact is that the airline has not been diverted by industrial action, which is more than can be said for some Spanish airlines.

There is uncertainty surrounding at least two of these airlines. Air Europa has been caught up in strikes. It would like to shift to a low-cost operation, but it is struggling to do so. Air Nostrum, taken head-on by Ryanair on some routes, simply can't compete on price. And then there's Iberia, which has had its share of unrest, brought about by what will be the launch of the low-cost Iberia Express at the end of March and by another hint of xenophobia directed at a supposed devil from the Emerald Isle, Willie Walsh, the boss of IAG, Iberia and British Airways' parent company.

The Spanish air industry needs more of a shake-up. O'Leary's comments about Spanair not deserving to survive because its prices were too high again didn't go down too well with some, but he was not wrong. As he has also not been wrong in pointing the finger, along with other airlines, at AENA's airport charges. It is encouraging, therefore, that Ryanair is in discussion with the Balearic Government and Palma airport over charges in winter and what actually constitutes the winter.

Whether this would result in more UK flights in winter is anybody's guess. For now, Ryanair, together with Vueling, are gobbling up what was left over from Spanair.

But with Spanair's disappearance comes the possibility of new players whose business models will be more attuned to the low-cost era. They will have to be in order to compete, and there is one existing airline which in 2011 flew under a third the number of passengers to Spain than Ryanair that might make a move and grow its traffic. And that's Easyjet. If it does though, watch out for a few more outbursts of xenophobia - the Spanish air industry is becoming less and less Spanish, which may be no bad thing.


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