Big carriers will concede short-haul, says former Ryanair finance chief

Big carriers will concede short-haul, says former Ryanair finance chiefNo start-up budget carrier can repeat Ryanair’s performance of driving passenger numbers up from one million passengers a year to 90 million, according to former finance chief Howard Millar.

“That (low-cost) train left the station a long time ago and I think it will be increasingly difficult for start-ups to gain any traction,” he told Reuters at an annual aviation finance gathering in Dublin.

Millar, who stepped down last month as chief financial officer after nearly 23 years at the Irish airline, said he cannot see either the continent’s established giants or a newcomer having the opportunities Ryanair had when he joined.

Instead the sector will be dominated by a handful of all-powerful carriers, with Lufthansa, Air France-KLM and British Airways owner IAG focusing on long-haul, conceding the short-haul market to Ryanair and rival easyJet.

A new player would struggle to get financing or aircraft as cheaply as Ryanair and would have difficulty competing with its huge economies of scale and market presence, Millar said.

And the so-called legacy carriers will ultimately have to concede that they cannot retroactively transform their cost base and will therefore have to focus on lower volume, higher margin businesses.

“These guys are in such a straitjacket that they don’t have that opportunity. They have tried all kinds of things … but none have made any money or reduced their cost base,” Millar said.

Sourced from Travel Weekly

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