When a company invests overseas, the move is usually accompanied by declarations of enthusiasm about the host nation’s economy.
Not so at Ryanair Holdings Plc. The Irish carrier revealed Wednesday that it will open a 14th U.K. airport base next April, days after the country is due to quit the European Union, while stressing that the plan in no way amounts to a reassessment of its dire warnings about the likely impact of Brexit.
“Don’t confuse this great news as some form of vote of confidence in the future of U.K. aviation,” Chief Commercial Officer David O’Brien said at a briefing in London. It’s a “vote of confidence in Southend airport.”
Ryanair will station three planes at Southend, 45 miles from the U.K. capital, operating flights to 13 cities in eight countries. Chief Executive Officer Michael O’Leary has been one of the most outspoken opponents of Britain leaving the EU, sketching out a doomsday scenario that would leave flights grounded, at least temporarily, forcing people to take the ferry to journey abroad.
“An inevitable question is going to be, didn’t Michael O’Leary say something like, he was pivoting growth away from the U.K. as a result of the Brexit vote?” O’Brien conceded, before quickly adding that the new base “shouldn’t be mistaken as some sort of reversal of opinion. It’s a recognition that demand continues to exist in the U.K. which is underserved.”
O’Brien reiterated earlier warnings that Ryanair’s aircraft fleet comprises a “very mobile asset” that could easily be redeployed according to demand. Other European markets including Germany, Italy and Spain are growing faster than Britain, he added.
Ryanair’s London Stansted base is the company’s biggest and the carrier also operates from nearby Luton. It also serves London Gatwick, but doesn’t station aircraft there.
The move to make Southend a base will boost the airport’s passenger tally by more than 50 percent next year, according to Warwick Brady, CEO of owner Stobart Group Ltd. The terminal pitches itself as a new London entry point, trading on the ease of switching to trains serving the city’s financial district.
O’Brien said the closure of Ryanair’s one-plane base in Glasgow, Scotland — announced earlier this year — will happen at the end of the summer. It has cited factors including falling demand for the move.
©2018 Bloomberg L.P.