Airlines seem to have fallen a little out of love with London’s number two airport during COVID. Major long-haul and full-service carriers have either left the airport entirely or seriously pared back services, but that’s left room for something different to move in. Ryanair boss Michael O’Leary sees Gatwick as a low-cost battleground over the coming months and years. But one thing’s clear – he’s not getting involved.
An interesting situation at Gatwick
Throughout the pandemic, airlines have been exiting Gatwick much faster than any other major airport. While it’s a busy, popular hub, it has always stood in the shadow of the more prominent Heathrow. Virgin Atlantic, Norwegian and others have all withdrawn from the airport at one stage or another, worrying airport bosses and airport crews alike.
This movement of traffic away from what was formerly one of Europe’s busiest airports has made space for other airlines to move in. Notably, Eastern European powerhouse Wizz has jumped at the opportunity, opening a base there just last month.
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Ryanair Group’s CEO Michael O’Leary spoke at length about the interesting situation at Gatwick during an interview for World Travel Market this week. He said,
“I think one interesting case that we’re looking at is Gatwick. Wizz is curious to get more slots in Gatwick. I think slots will free up at Gatwick. What’s interesting is, what will IAG do with their Gatwick slots?”
Early in the pandemic, British Airways pulled back from London’s Gatwick Airport. Despite rumors that the base could be closed entirely, the airline returned to operations towards the end of July. Former IAG boss Willie Walsh had always stood by the south London airport, decrying any accusations of an exit by the group.
O’Leary doesn’t think that IAG will let its LGW slots go easily. He forecasts the group even moving them to other operators outside of BA, rather than giving them up to low-cost airlines. He said,
“I would be surprised if IAG gives up its slots in Gatwick. I’ve always had the view that I think they’ll reallocate those slots to Vueling or maybe to Aer Lingus or one of the lower-cost models within the IAG family … I would be very surprised if they were to give up those slots to someone like Wizz or to easyJet.”
If IAG isn’t giving up its Gatwick slots, where can Wizz get more capacity from?
Has Norwegian had its chips?
Long-haul low-cost airline Norwegian was in financial difficulties even before the pandemic. While it’s still creaking along, just about, a recent rejection of funding by its home government has drawn concern over its ability to survive the European winter. Just last month, it was looking at job cuts at Gatwick. O’Leary doesn’t think it will be coming back. He said,
“I think, frankly, God be good to them, the Norwegian slots will become available in Gatwick … I think Wizz will certainly grab a lot of the Norwegian slots, and they’ll get them as a new entrant.”
As things are playing out, Gatwick looks to become a battleground for low-cost airlines, putting Wizz head to head with easyJet at this popular London airport. Such a situation would have been unheard of pre-COVID, but as we’ve seen, anything can happen in 12 months.
O’Leary thinks it will be entertaining to watch from the sidelines as the two low-cost airlines battle it out for market share. He said,
“It will be interesting to see Wizz square up to easyJet in Gatwick. I think part of it is Wizz recognizing that they can undercut easyJet at Gatwick but that they can’t undercut Ryanair at Stansted.”
It’s not the first time the Ryanair boss has accused Wizz Air of high-tailing it out of Ryanair’s way. He says that, as Ryanair has moved into Wizz home territories in places like Romania, Bucharest and Ukraine, Wizz has moved further east and down to Dubai to avoid butting heads. He commented,
“You stay out of Ryanair’s way because you can’t compete with us.”
While I think Joe Varadi would have a few choice words to say about that statement, it does explain why Wizz is so keenly interested in Gatwick. O’Leary believes Wizz will come out of COVID with a lower per-seat cost base than easyJet, so will be capable of successfully drawing traffic away from its competitor in the future.
While Wizz and easyJet play, Ryanair is sewing up Stansted
Regardless of the new opportunities coming to fruition in Gatwick, O’Leary is not interested. He said,
“I think what’s interesting is we are not very interested in Gatwick. Most of my focus is on Stansted. I see huge opportunities for us in Stansted … Frankly Gatwick is an expensive airport with expensive handling, whereas, at Stansted, we have a very low-cost operation.”
Ryanair’s pincer-like grip on London Stansted has forced out the competition. In August, easyJet announced a flurry of base closures around the UK, including their operations at Stansted. For Ryanair, this is a perfect scenario because it means there are more slots up for grab at what is evidently O’Leary’s favorite London airport. He said,
“easyJet is closing the bases at Stansted and Southend, so then I think we would certainly look to take up their slots. We would like to expand in Stansted and, to less of an extent, Southend.”
It’s unusual to hear airlines talking about growth right now, but certainly very welcome. Ryanair has said all along that it is keeping airlines and pilots current, so it is capable of pouncing on every last drop of demand the second it flares up. O’Leary predicts a strong demand next summer and is ready to expand to accommodate that resurgence. He said,
“We would certainly be very focused, and I’d be very keen to return to growth very quickly in Stansted as soon as there’s a vaccine and a reasonable recovery. Stansted would still be my airport of choice for London because of the efficiency of the facility and good management team there.”
It seems that, while Wizz and easyJet lock horns in Gatwick, Ryanair is being left with free rein to reign supreme at Stansted. While that’s good news for the airline, we’ll have to wait and see how it plays out for passengers.
What do you make of the shake-up in the UK’s low-cost London market? Let us know in the comments.