Why Ryanair Holdings plc (ADR)(NASDAQ: RYAAY) stock is going gangbusters today

Ryanair Holdings plc (ADR)(NASDAQ: RYAAY) stock made a gap up opening this morning generating over 4.5% (as 10:59AM EDT on March 16th, 2017; Source: Google finance).

Beginning in October, Ryanair Holdings plc (ADR)(NASDAQ: RYAAY) would be extending its network further east than ever before with flights from Ukraine. The low-cost airline aims to target a market which has huge demand along with high competition with rival Wizz Air Holdings Plc. Wizz currently serves about 20 destinations from Kiev, including London, seven German cities and six in Poland, plus two from Lviv. The services will start with four routes from Kiev to London Stansted, Manchester, Eindhoven and Stockholm and seven to the western city of Lviv. An estimated of 510,000 passengers per year will be attracted to the flights with a fair of 19.99 pounds for October to November.

With this move, the Eastern European country will be protected from a humanitarian crisis thanks to a four-year conflict with Russia. The new Ryanair flights could signal the beginning of a new boom for the country Ukraine which attracts stag and hen dos and football fans. Both the airlines will be benefitted and also it will open up Norwegian’s rapidly expanding US routes to more airports across Europe at a low cost. Also, it guarantees higher priced seats to Ryanair.

Kiev will get five flights a week from London Stansted, Ryanair’s biggest base, together with three each from Stockholm, Manchester in northern England and Eindhoven in the Netherlands. Lviv will have three weekly services from the Polish cities of Krakow and Wroclaw and two apiece from Stansted, Eindhoven, Berlin, Budapest and Memmingen, 80 kilometers (50 miles) east of Munich.

The company chief executive comments that the airline is looking for newer regions as western markets become increasingly saturated. The company said that Kiev has about three airline passengers a year per head of population compared with 15 in Dublin, where the company is based. He further added that there are a pretty large potential and fewer connections than there should be. Meanwhile, Ukraine is also close to obtaining visa-free travel to the European Union for its citizens, with the matter to be discussed by the European Parliament in the first week of April. Thereby, this will lead to the adoption of the new setup by June.

Additionally, passengers will also be able to book trips to America with Ryanair as it teams up with budget rival Norwegian to offer long-distance trips from this summer. Customers will be able to book cheap flights from a range of UK airports to destinations such as Boston, New Jersey, and New York with Norwegian. Allowing customers to book transatlantic flights is a significant development for Ryanair as it tries to attract more customers from upmarket rivals.

 

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