Ryanair joins low-cost rivals with expansion in Germany

FRANKFURT, April 10 Thu Apr 10, 2014 9:34am EDT

FRANKFURT, April 10 (Reuters) - Low cost carrier Ryanair plans to expand at Cologne airport in Germany, joining rivals in boosting services in Europe's largest economy and providing more competition for Lufthansa on its home territory.

Ryanair will base one aircraft and open up five new routes from Cologne, in Germany's most populated federal state of North Rhine-Westphalia, in October, the budget carrier said on Thursday.

The airline therefore joins rivals such as Easyjet and Spain's Vueling, all of which are hoping to take advantage of Germany's strong economy and its citizens' love of foreign holidays.

Low cost carriers have been slow to break into Germany, in the same way as they have taken over in other markets like Britain, France and Spain.

But analysts say low-cost carriers have spotted an opening, especially as Air Berlin, Germany's second largest airline, struggles with its finances.

"Germany is the growth engine of Europe. As an European airline, it would be wrong to leave out Germany," Vueling German manager Ulla Siebken told journalists in Frankfurt last month.

Except for routes that feed into its hubs in Frankfurt and Munich, full-service carrier Lufthansa has now handed over its European short-haul operations to Germanwings, its low-cost unit.

Ryanair said it is investing over $90 million in Cologne. The new routes are to Dublin, London Stansted, Madrid, Riga & Rome Ciampino, reflecting Ryanair's move into larger airports, rather than smaller regional airports.

Vueling plans to increase revenue by 25 percent in Germany this year as it offers 33 percent more capacity, in terms of the seat kilometres it offers.

Easyjet is also expanding, putting in extra planes to Berlin and launching routes to Hamburg.

"Germany for us is good," Easyjet CEO Carolyn McCall told Reuters last month. "We're doing well in Berlin... and we just launched in Hamburg. That will be good for us. All the signals are very good."

(Reporting by Victoria Bryan, Peter Maushagen and Cyril Altmeyer; Editing by Mark Heinrich)

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