Ryanair Set To Make Hahn Cuts

Ryanair announced that it is set to cut a number of flights from Frankfurt Hahn. The Hub investigates this decision.

Ryanair has attributed its decision to discontinue a number of routes from Frankfurt's secondary airport to the introduction of the Government tourist tax of 8 Euros. The introduction of this tax means that Ryanair will discontinue the following nine routes from March 27^th 2011; Agadir, Berlin, Gdansk, Gothenburg, Klagenfurt,Prague, Santiago de Compostella, Seville and Wroclaw whilst 15 other routes will see capacity reductions.

Europe's largest low-cost carrier is the dominant carrier at Frankfurt Hahn with a 96% share of all scheduled traffic (Flightbase 14-20 October 2010); the only other scheduled operator at Frankfurt Hahn being Wizz Air, with services to Budapest, Katowice and Sofia. Therefore Ryanair, like at many of its airports, is in a strong position to negotiate.

The proposed Ryanair cuts will mean that the number of based B737-800 units will decrease to eight, with currently 11 aircraft stationed at Frankfurt Hahn leading potentially to a loss of up to 1 million annual passengers.

Currently serving a total of 52 destinations, the decision to cut nine routes will come as a blow to the airport. However with Ryanair operating on tight margins at Hahn, where the is not the price elasticity of a London Gatwick, the tourist tax means that the Dublin based operator will more than likely deploy these aircraft elsewhere.

Hahn is currently Ryanair's largest base in Germany and is the seventh largest base in the Ryanair system as the table below demonstrates:

Source Flightbase 14-20 October 2010

The move by Ryanair is symptomatic of the carrier that is quick to punish airports and stakeholders with whom they have a dispute. Whilst the tourism aviation tax is no doubt an important reason for the cancellation of services, the tax may well mask underlying issues facing these routes.

It is rare that Ryanair will discontinue routes that are performing well and given that the impact of the tax will not yet have affected services, the decision to axe and reduce a number of services, could be more concerned with redeploying underperforming routes. With Ryanair having a significant presence at Dusseldorf Weeze there may well be an overlap in catchment areas for the ultra-low fare product, particularly as 38 routes are served from both Frankfurt Hahn and Dusseldorf Weeze according to October Flightbase data.

The introduction of a tourism tax, may well lead to a dampening in passenger demand for low-cost services. As seen with full-service passengers opting to travel on low-cost flights, low cost passengers will simply stop flying if the price is not right. However large increases in ancillary charges by Ryanair do not appear to have had an impact on passenger demand, so it has yet to be seen what the impact of the tourism tax will be.