In the vision set out by the European Union (EU) in the late 1990s when the single aviation market was set up, the objective was to create a level playing field across the EU, turning what were historically protected national aviation markets into a competitive single market.  This paved the way for non-domiciled carriers to access domestic markets rather than have them dominated by home based carriers, but in practice there hasn’t been a significant shift until more recently, and there are not many markets in Europe where an away based, or non-domiciled airline, operates more capacity than either the country’s national carrier or those domiciled there.    

Italy Stands Apart

Due to historic challenges with Alitalia, Italy’s national carrier, and now ITA Airways, Italy is the country which has seen the greatest shift in this area.  It has the highest share of capacity in Europe (domestic and international) operated by a non-domiciled carrier.  In 2023, 34% of total capacity in Italy will be operated by Ryanair, over one third of the country’s capacity.   
Looking across the other Top 10 country markets in Europe shows that the country with the next largest share of capacity operated by a non-domiciled carrier is Switzerland, where easyJet operates 22% of capacity. In Spain and Portugal, Ryanair has a similar share (21% and 19% respectively) as the largest non-domiciled carrier.

Turning specifically to look at Europe’s biggest domestic markets, Italy is the only one where more than half of domestic capacity is operated by non-domiciled carriers – in 2023 two thirds of capacity will be operated by foreign carriers – making it the only market where non domiciled carriers are dominant.   The next largest country with a high non-domicile share is in France, where almost one third of capacity is operated by carriers which are domiciled in other countries. 

Is Ryanair Good For Italy? 

Closer to home, looking at the Italian domestic market, in June 2023 Ryanair operated 40% of flights within Italy, up from just 20% in June 2013. capitalising on the turbulent times faced in the last decade by Italy’s national carrier, once known as Alitalia and now operating under a new brand, ITA Airways, since late 2021. ITA Airways has also recently seen Lufthansa acquire a 41% stake and we cover what this might mean for the development of Italy’s long-haul network in a recent blog.

Ryanair operates on average 317 flights per day, on 111 routes across the country, which has to be good news for Italians wishing to travel around internally.  The average frequency per day across Ryanair’s Italian network is 3 flights per day, but 90 of the 111 operate at an even lower frequency which can make it challenging for business travellers who typically want to fly out to and back from their destination in a day. This is not uncommon, as in Spain, where Ryanair operate 21% of capacity, the average frequency is lower than Italy, at two flights per day.  

ITA Airways on the other hand, Italy’s original national carrier, now operates just 25 routes, mostly serving the nation’s biggest cities of Rome, Milan, Naples, Catania and Cagliari.   Frequency across these routes averages 4 flights per day. In terms of route overlap there is very little.  Both carriers operate Catania – Rome, Palermo-Rome, Bari-Rome and Brindisi-Rome. So arguably Ryanair has and continues to offer Italians a far greater choice of domestic routes which in a country where distances between cities at either end of the country are considerable, is still a good thing. 

Whilst Ryanair is undoubtedly important to Italy, the inverse is also true – one in five of Ryanair’s seats in June 2023 operated from an Italian airport.  The next largest market for Ryanair is Spain, which accounted for 18% of their seats in June 2023.  Italy wasn’t always Ryanair’s largest country market however, in 2019 Spain was largest, accounting for 19.2% of Ryanair’s capacity whilst Italy was just behind with 18.2% of seats.    

So, will we see more shift towards non-domiciled carriers becoming dominant? Is Italy the model for the future of Europe’s big domestic markets?  And have LCCs in Europe finished expanding and seeking growth into new markets?  On the former ultimately it will come down to the strength of the national carriers and the markets they serve, and on the latter, of course not – there are many aircraft orders to be received and there will most likely always be appetite for growth when it comes to LCCs.  It seems unlikely that Europe’s large legacy carriers will give up market share in their home markets any time soon, but if limiting air journeys of 2-3 hours or less, as has been happening in France and Germany expands further, then this may well pave the way for legacy carriers across Europe to re-evaluate  network strategies and how to best feed their hubs. Only time will tell. 

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