Air transport Domestic flights: the RAM /Ryanair match-up

The Irish low-cost airline Ryanair is nurturing strong ambitions in domestic air transport (inter-city and inter-regional) in Morocco. The Irish behemoth launched its first domestic flights at the beginning of April. In all, Ryanair has been approved to operate to some ten cities, including Marrakech, Essaouira, Fez, Ouarzazate, Oujda, Tangier, Tetouan, and Errachidia…

A schedule of progressive launches has been announced by the low-cost airline. Of course, the challenge of opening up the region by air will benefit all Moroccans and tourists, who will be able to travel quickly and cheaply. This will democratize access to air transport for all social classes. At the same time, the arrival of an international low-cost behemoth will strengthen the air transport network and open up the region in the run-up to the 1st full-scale test of the AFCON 2025 (African Cup of Nations) and the World Cup 2030. This should contribute to strengthening the attractiveness of destinations and promoting tourism (internal and external). But at the same time, Ryanair’s offensive on domestic flights at rock-bottom prices. The low-cost airlines’ fare structure is unbeatable. Witness the fares advertised on the Ryanair website, which range from 160 to 500 Dirhams (US 16 and 50 !), which will put pressure on both Royal Air Maroc (RAM) and Air Arabia.

What’s more, RAM’s cost and expense structures are not the same as those of Ryanair. These are two diametrically opposed business models (scheduled vs. low-cost). This argues in favor of the Irish behemoth, whose agility and flexibility, as well as the responsiveness and flexibility of its fleet, have proved their worth everywhere.  On paper, the competition between RAM and Ryanair looks disproportionate.

That said, the national airline will face stiff competition in its own fiefdom. What’s more, Ryanair will benefit from subsidies from the Moroccan government, either directly or through the ONMT (Moroccan National Tourism Board) – in other words, taxpayers’ money – in order to amortize costs and make domestic flights in Morocco more profitable.  But how will RAM counter this commercial offensive in its own strongholds?                               

According to Abdelhamid Addou (CEO of RAM), the national airline has put in place a whole development plan for domestic flights, “ with radial connection systems to the cities of Laâyoune, Dakhla, Oujda, Tangiers, and Rabat… We have presented our system to the Government; it is a global and radial project” , adding that  “We’re going to roll out our domestic development plan as initially planned, so as to open up the network, which is so important for the whole of Morocco. Of course, we intend to make a few adjustments in view of the new openings announced by the competition”. In other words, RAM’s thinly veiled counter-offensive is getting organized.

A.R.