Ryanair returns to the UK domestic market

Over the past few weeks, a number of Ryanair UK routes have been added from London Stansted and Manchester across Europe and North Africa. And now, the airline is re-entering the UK domestic market, with Ryanair launching flights between Manchester and City of Derry from 1 December 2021.

Ryanair vacated the UK domestic market due to the UK Civil Aviation Authority due to regulatory changes post Brexit (1). This has meant UK registered aircraft are required for domestic and non-EU routes. This was a blow for many airports - especially City of Derry, where Ryanair had flights to Edinburgh and Liverpool. Loganair stepped in and replaced Ryanair at City of Derry, adding a Liverpool route and increasing its existing Glasgow flights, whilst Aer Lingus Regional and easyJet provided links between city pairs which have lost their Ryanair services.

Ryanair now have 2 UK bases with UK registered planes - London Stansted and Manchester. With a Public Service Obligation between City of Derry and London Stansted in place (operated by Loganair), it leaves Manchester as the only viable route for Ryanair UK to launch from City of Derry.

Manchester has previously had direct flights to City of Derry with Loganair in 2019, however, the route faced competition from Ryanair operating more seats and flights at the time between the larger City of Derry to Liverpool market. With Loganair operating daily flights between City of Derry and Liverpool, Ryanair are now trying to reconnect North West England with North West Northern Ireland, with a link from one of the UK's major economic centres.

Ryanair argue that the UK Air Passenger Duty (APD) holds back their UK domestic ambitions. The UK APD is currently £13 for short haul economy passengers and is placed on all departing passengers. Therefore, for a return journey, the UK domestic market would be £26 in APD whereas UK - Europe would be just £13. This high APD fare discourages low cost operators due to lack of viability and being able to be more profitable operating UK - Europe flights. However, in March 2021, the UK Government announced a review on the ADP. It is unclear if this is an early sign of this being removed or because Ryanair regret the decision to leave the market in the first place.

The lack of UK registered aircraft and the high air passenger duty fee are key barriers to Ryanair's lack of UK domestic flights, however, if they were to return, some lucrative markets remain underserved. Additionally, easyJet are very dominant on the main "trunk routes" of UK domestic routes, Ryanair may not be the consumers first choice in this market. Increased competition would be good news for passengers, however, existing carriers may struggle to compete with Ryanair's pricing - especially on low demand routes. There is a lot for Ryanair to contemplate for the return of domestic flying and time will tell if they want to return to the market.

Source:

(1) - UK CAA Bureaucracy Leads To A Closure Of 12 Uk Domestic And International Routes | Ryanair's Corporate Website
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