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Interview with Ryanair-CMO Kenny Jacobs

«We just call it 737»

Chief Marketing Officer Kenny Jacobs explains what Ryanair will call the 737 Max, why he thinks his airline is green, if there will be more base closures and for how long he will keep up the price war in Vienna.

Ryanair

Kenny Jacobs: «There could be more base closings or there could just be reductions»

Boeing has just announced that the 737 Max won’t be up in the air before this summer. So what is your latest guesstimate: When will Ryanair get its first plane?
It looks like it is going to be autumn at the moment. We originally reported that we would get our first plane this summer, but now Boeing has moved it back by a couple of months. So now we think it is going to be September or October until we get the first one. Airlines that already got some 737 Max – like Tui, Norwegian or Lot – will get theirs first.

Ryanair had already announced some base closures because of the grounding. Will there be more?
We will need to make changes to the schedule that we planned for this summer. We are now in the process of going through everything and making those changes. We originally wanted to get 58 737 Max this year, then had to reduce it to ten and now we will have to see how many we’ll get. So there will be an impact. There could be more base closings or there could just be reductions.

So what will it most likely be?
We will look at the schedules and see if we need to close a base or if we just reduce multiple frequencies. We prefer doing the latter because it protects jobs.

Can you say how much the grounding has cost you so far?
That I cannot say yet. It is an ongoing conversation with Boeing. But it is foremost about getting the 737 Max to fly again and after that we’ll talk about compensation. You can see some amounts being published though, for example Southwest Airlines has got 800 Million dollars.

By the time it is back in the air it will be the world’s most tested aircraft.

Are you still confident about the aircraft?
Yes! By the time it is back in the air it will be the world’s most tested aircraft. It will have been engineered twice. You have the American regulators, the European regulators, the Canadians – everybody is all over it. It is being put though the full test programme again and again.

How do pilots feel about it?
I have spoken to some of our pilots who have been in the simulator and the really like it as an aircraft.

Even if it will be the safest aircraft – customers don’t feel that comfortable.
Some might be nervous. But I think it will actually be ok. If you put a Max beside a Boeing 737-800, most consumers won’t be able to tell the difference.

But they’ll see it when they book their flight.
No, most of them wont. It will not be on the website and it will not say Max everywhere. The planes will start to come into our fleet in small numbers and then people will slowly adapt and get over it. The same has happened with other aircraft that had issues.

We call all our aircraft 737.

So you will not tell customers which aircraft type they’re flying on?
We don’t do that at the moment and we don’t plan on doing it. Only very few customers will actually know the specific variant.

How are you calling the 737 Max?
We just call it 737. We call all our aircraft 737.

Boeing has talked to customers about how airlines staff can help scared passengers. Are you planning any special training in that area?
No, I don’t think we will do anything like that.

One reason why Ryanair is keen on the Max are its lower emissions. It is one of the reasons you call yourself «Europe’s greenest airline». How do you measure that?
Our base for that is the measure that every airline should use and that has been used in the automotive industry for years: Grams of CO2 per passenger kilometer. In that way you can compare airlines with each other, but also compare them to train travel and cars.

So what do you do exactly to keep emissions low?
First of all we don’t have empty seats. Empty seats are a waste. And we almost never have empty seats with a load factor of 96 percent. The second thing is: You need to have younger aircraft. The younger the aircraft and the engine the more efficient it is, and the less fuel it uses.

We already have a good percentage of customers offsetting their carbon emissions on our website.

But don’t you think especially on shorter routes – where it is doable – people will more often prefer to take trains in the future?
No. The demand for air travel has been growing – even out of Germany or Sweden. But I do think some of our norms might be challenged.

What do you mean by that?
If you fly transatlantic, things might change. For example someone flying from Munich to New York in Business Class is creating eight times the carbon of someone flying economy.

So you’re saying there should be no more business class?
Well at least I think if you’re paying for it, you should be paying a lot more. And I think these are the things we’ll see in the next generations.

Your biggest competitor Easyjet has announced to compensate all flights. Is that something that Ryanair could do?
We already have a good percentage of customers offsetting their carbon on our website. Nearly three percent, and we expect that to grow a lot more. And if I just take German customers, it even is much higher than those 3 percent – that’s a lot more than Carsten Spohr has indicated for Lufthansa when he said he could shake all their hands. They reach about 1 percent of customers.

Any of our airlines could come to Vienna.

Lufthansa Group and Ryanair are currently involved in a price war in Vienna…
Yes! Vienna is the best place to be in Europe at the moment!

I suppose you mean, as a customer – airlines are not making any money there at the moment.
Yes, as a customer. The prices are so low there at the moment. And the price war will go on. For us the fleet  based in Vienna is small. So it is manageable. We can sustain the price war and that is what you will see.

Losses of two million Euros per week at your subsidiary Lauda are not that small.
The losses are a bit higher than we planned. And that will probably continue for a little longer. But we at the same time we raised our guidance for our profit to 950 to 1050 million euros. Lauda is small in the scheme of things. We will be the ones to keep fighting.

You hinted that your Polish subsidiary Buzz could be used in Vienna because it has a much lower cost base. Is that still the case?
It is still an option, although now it is primarily focused on the CEE-Region. But any of our airlines could come to Vienna.

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