[Anonymous]

[openfly]

The financial sections of todays UK papers are full off a profits warning at Ryanair. Of course Molly is shrugging this off as a blip in July…not his fault, but the passengers for not booking with his airline.

One wonders if the passengers looking for low-cost flights are realising that Ryanair is actually a lot dearer, at the end of the booking process, than was originally thought. Passengers are now looking at traditional airlines such as BA, LH, AF for cheap flights, with hassle free fares and service, with add-ons such as baggage, snacks, boarding cards, seat selection etc always included in a fare…possibly cheaper than Ryanair…and actually arriving at a proper destination airport.

When his millions of passengers start shopping around, which I believe is the reality, poor Molly will have to do some rapid thinking to stop Ryanair sinking.

[HedgeFundFlyer]

I am no plane snob but I wouldn’t be seen dead on a Ryanair flight and I know that increasingly goes for many other people too.

I’d rather pay the extra few quid (if, indeed, it is any more) and fly BA.

[capetonianm]

I too wouldn’t fly on Ryanair, not because I’m a snob but because it is against my principles to give my money to an outfit that treats its customers and staff so badly. Then there is the safety aspect, and whilst they currently have a better safety record than most other airlines, I believe they are a serious incident waiting to happen.

Could they go bust? No, and I wouldn’t wish that on them because of the huge numbers of people who would be left unemployed.

[millionsofmiles]

The high profits shown by Ryanair result partially out of extremely lengthy writeoff and depreciation of assets (planes).
Also, their fixed cost past is high….so even a small loss of revenue will turn a fomer profit into a major loss.
They run a risky biz model….also since they always use their cashflow for expansion. If that doesnt pay off quickly…they have another problem.

[BigDog.]

Of course it could, however the likelihood imo is very unlikely.

Ryanair is very conservative in its financial reporting so I doubt if it is as bad as O’Leary is painting it. Talking up a small panic will result in its contractors/employees keeping their heads down.

O’Leary has already spoken of a range of price cuts to stimulate business.

[flightdeck]

Just another ruse to keep workers toeing the line and just more free advertising. Me fly Ryanair? what a silly question!

[Bucksnet]

Alitalia is on the verge of bankruptcy, not Ryanair.

[capetonianm]

Alitalia has been on the brink of bankruptcy for the last, what …… 30 years ….?

[FormerlyDoS]

Yes Ryanair could go bust.

So could British Airways.

I don’t believe either is likely in the foreseeable future.

[MartynSinclair]

Any company can and will go bust if customers don’t buy!

A financially unsound company can not go into the market and buy the number of new aircraft Ryan are buying.

I wonder what the % downturn in passenger traffic it would take to rattle the banks and for the plug to be pulled.

Where O’Leary has been clever is not relying on the sophisticated business traveller (us lot) to support his company. Nobody seems to want to fly with them, but they are still loading up with somebody!!

[FormerlyDoS]

Martyn

They have made themselves so large and dominant, that often there is no other choice but to use the b*ggers if you need a direct flight, e.g. London to Bremen or Malta to Gothenburg.

I believe that Ryanair’s strategy (low cost focus) allows the company to use pricing elasticity to increase sales in some segments, gouging others where possible.

Some people avoid the airline like the plague, but others either have to use it (like me on some routes) or use it as they believe it to be good value for money – the latter category are not going to expect high grade service.

Ryanair is a great case study of Porter’s Generic Strategies in action.

[NameRemoved-18/12/14]

Hello Martyn and FDoS

I have just booked a return flight from Hahn to Santiago de Compostela for my partner.

Here is the fare breakdown:

Total Fare
63.23 EUR
Taxes, Fees & Charges
23.91 EUR
EU 261 Levy
5.00 EUR
Web Check in
14.00 EUR
ETS
0.50 EUR
Administration Fee
14.00 EUR
Checked Bag(s)
50.00 EUR
Credit Card Fee
3.41 EUR
——————————————————————————-

These flights (189 passengers) are always busy. I dread to think what the fare would be from LUX via Madrid.

[FormerlyDoS]

alexpo1

A good illustration of my view, thanks for sharing.

[first_class_please]

I’m surprised they are allowed to charge an EU261 levy as shown in the breakdown.

That’s forcing passengers to pay an “insurance” to receive EU compensation when applicable.

[Author]

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