Bloomberg News

Ryanair Plans Swedish Domestic Flights Next Year in Push North

October 04, 2011

Oct. 4 (Bloomberg) -- Ryanair Holdings Plc may start domestic flights in Sweden next year, challenging SAS Group, as Europe’s biggest discount airline targets growth in the north of the region, Chief Executive Officer Michael O’Leary said today.

Ryanair is also talking with seven new airports in Sweden about commencing services, O’Leary said in an interview in Stockholm. While he declined to identify the terminals, they’re located mainly in the center and north of the country, he said.

“We’ve been focusing for the last two, three years on the big southern European markets, Italy and Spain, but our focus in the next two or three is more likely to be in Scandinavia and central Europe,” the CEO said. “It just depends which airports come up with the best package of costs.”

The expansion in Scandinavia could squeeze SAS Group, the No. 1 Nordic carrier that’s been unprofitable for four years amid competition from discount rivals including Norwegian Air Shuttle ASA. Dublin-based Ryanair already has a base at Stockholm Skavsta with flights to about 45 European cities, and operates to six other Swedish airports from overseas.

Ryanair said it’s meanwhile holding off on any talks about selling its shares of Aer Lingus Group Plc until Ireland divests a 25 percent holding. The government has said it may auction the state’s stake next year to pay down debt, while O’Leary has said

his company’s 29 percent of stock may be sold after it was blocked by regulators in successive attempts at a full takeover.

Price Gap

“We’re not going to talk to someone who hasn’t bought the government stake,” the executive said today. “Go and buy the government stake first, then we’ll talk to you. Otherwise we’ll just talk to loads of bottom fishers and all the rest.”

O’Leary also said there’s “no doubt” that the economic slowdown will cause aircraft prices to drop. While Ryanair is continuing talks with Boeing Co. and Commercial Aircraft Corp. of China about potentially buying planes, it hasn’t yet been offered “prices that make sense to us,” the CEO said.

While Ryanair is currently an all-Boeing operator, with a fleet of 787-800s, the Irish carrier said in June it’s exploring a requirement for at least 200 single-aisle planes with Comac after signing an accord to help develop the company’s C919 jet.

--Editor: Chris Jasper.

To contact the reporter on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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