Ryanair, the world’s biggest airline in terms of international flights, announced its withdrawal from Valencia airport after its owners refused to subsidise its marketing campaigns. Michael Cawley, Ryanair’s deputy chief executive, said the removal of the airline’s two planes from the Spanish airport would cost the regional economy about 750 jobs. “This is a very black day for the airport of Valencia and the city and region which it serves,” said Cawley.
Analysts said Ryanair’s withdrawal from Valencia - its first ever base closure – underlined the pressure on airlines to keep down costs amid faltering consumer demand. Under Ryanair’s business model, it must sell more than eight out 10 seats per flight and relies on low fares to achieve this. However, as the economy weakens, so does consumer demand, resulting in pressure to reduce fares in order to stimulate sales.
“They are clearly pushing very hard on every cost line and demanding cuts in operating costs at airports where they believe there is leverage,” said Andrew Lobbenberg, an analyst at Royal Bank of Scotland.
However, Lobbenberg said Ryanair’s clash with Valencia might be enough to wring concessions from other airport owners. “It is probably useful for Ryanair to cancel a few airports just to lend credibility to their threats to the others,” he said.
The Ryanair chief executive, Michael O’Leary, told the Guardian this month that the airline was braced for a depression lasting up to five years. He admitted that many of Ryanair’s leisure passengers would be deterred from travelling, affecting up to 40% of its customer base, but warned competitors that Ryanair would make up the customer loss by winning passengers from other airlines.
Posted by valenciaapartments 
Posted by valenciaapartments 
