Barcelona – Well publicized spats with airports and governments over charges and taxes and pessimistic forecasts of a slower than expected return to economic prosperity does not dampen Ryanair’s perspective of route development. And with nearly 50 aircraft due for delivery before June next year the airline’s executives need to find bases and routes for the new aircraft.

Kevin O'Toole, the airline’s director new route development, told the World Low Cost Airlines Congress in Barcelona, the airline has identified key areas for growth in the next 12 months. “There is not a route that cannot be stimulated by low fares and we have demonstrated that time and time again over the past 10 years. So the problems that have been noted do not bother us that much,” he said.

He noted the Dublin-London route 10 years ago carried one million passengers and fares were high. “A day return on one of the flag carriers could easily cost more than £350 for an hours flight each way,” he said. “Now the route carries more than 3.5m and all down to low fares pioneered by Ryanair. Most of the increased passenger levels are incremental drawn away from ferries and coaches. We will continue to seek to develop existing and new markets where cost conditions support this growth. Ryanair has a strategy that is fluid and flexible."

Recent growth has been concentrated in Italy and Spain. Ten new bases have been opened in Italy – the latest two being opened next January in Bari and Brindisi. “These airports saw their services melt away when MyAir’s operating license was suspended and we have been able to move quickly to fill the gap. We will base one aircraft at Bari and Brindisi from January and it is likely we will base further aircraft there during 2010. There is plenty of potential in the Italian market,” said O’Toole.

The Irish-based airline has established an extensive network of domestic services within Italy and this is one area which Ryanair is keen to develop. “Alitalia was high fare and inefficient, they still are. We operate on time and at low fares. With 18 million passengers we would not say we face opposition,” O’Toole added.

Spain is another region, which O’Toole said was underserved with plenty of opportunities, especially away from the Mediterranean Coast. Underserved markets also exist in France, Germany and Belgium. O’Toole said the airline is also looking at airports which have seen considerable downturns in traffic, citing Copenhagen after the collapse of Sterling as well as other airports – Bordeaux, Brussels and Barcelona – that are now creating new facilities for low cost carriers.

O’Toole would not be drawn on local rumors that Ryanair is considering flying the busy Barcelona-Madrid route in competition with flag carrier Iberia and other low cost airlines such as Vueling. But further growth would depend on the level of support offered to the airline by airports and regional authorities. “If we are selling a seat for just one euro we must be supported to meet our operating costs,” he said.

The collapse of airlines present further opportunities for both airlines and airports Ole Wieth Christensen, head of route development at Copenhagen Airport, said. “When we lost the services of Sterling Airways we saw our traffic reduce significantly. We worked with other airlines to replace this traffic and we have seen a new Sterling operation, as Cimber Sterling emerge and new carriers, Transavia and Norwegian Air Shuttle come in as well. By providing new facilities for low cost airlines we hope to encourage more airlines to fly to Copenhagen,” he said.

Ryanair does not fly to the Danish capital and O’Toole said it had been considered. He was critical of airports which offer facilities but which cannot meet the requirements of low cost airlines, which he described as “sensible, simple and efficient facilities.”

“We want them to stop the gold plating and marble cladding and stop seeing airlines as cash cows and give us what we need,” he said. Meanwhile another airline revealed it is responding to an era of change by being “as flexible as it can” and be ready for change.

Tero Taskila presented Air Baltic as a case study to delegates from which low cost airlines can learn for the future. He pointed out his airline has changed its business model three times within the last 15 years. “It was the national carrier from its inception in 1995 to a pure LCC model in 2004,” he said. “In 2008, it major problems due to an economic recession, Air Baltic transformed into an LCC-network model. Within the last year, it changed from 11% connecting passengers to 60%. As yields are coming under more pressure, ancillaries play a growing important role for all airlines.”

Commission based products & a la carte pricing are the two key-aspects of ancillary revenue. Airlines will have to decide if they are a platform for a full range of products or if they prefer to offer particular services only by themselves, Taskila said

“As all airlines try to improve revenue from these products, the main difficulty is to find the right balance. Customers should see the ancillaries as an additional service that they really like to pay for. Airlines have to be aware not to annoy their customers by charging for products people expect them for free,” he added.

Referring to route development he said Air Baltic had an extensive network to former Russian states in the Baltic and north-western region which were not served by any other airline. “We are capitalizing on that network and will introduce further services to meet the demand,” he said.