[craigwatson]

there is no fuel surcharge at Ryanair, as well on ALOT of the flights they waive the taxes as well (not sure how they do this, they must cover the cost themselves), plus again on about 50% of flights they waive the booking fee plus the mandatory “online check in ” fee. If you are flexible on dates it is quite easy to get a cheap fare. as i said earlier i booked and the cost was £8 per adult return (so yes £4 each way) and surprisingly my daughter was £20 each way ( flat rate infant fare no matter the route) no other charges other than a £5 booking fee which would have been waived had i stayed 2 more nights. didnt want to so paid the extra £5. we have no checked bags and arent interested in preassigned seats as they are all the same anyways, and with an infant we get free priority boarding (and we get 30 kg of carry on baggage free.. 10 kg per person. more than enough)

[craigwatson]

forgot to say they do try to sell add ons along the way.. insurance, cars, hotel, transfers. seats. food. priority boarding, but it is all optional, just click “no thanks” and thats all there is to it, i have no problem with them trying to sell optional extras as long as its not forced on you.

[MartynSinclair]

Ryanair are picking up the tax bill???

Thats a novel way to get publicity – it must mean that the airline is selling seats at a loss in the hope that pax buy the added benefit.

How do the revenue look upon a company paying a tax on behalf of a customer. Surely that must be considered as some sort of taxable benefit for the passenger as it is a personal tax. How does a company get away with paying these taxes on befalf of a pax, if indeed they are.

What this thread is beginning to show is that there is no clear formula for the added payments. If a company like Ryanair can sell tickets without a fuel surcharge, then surely it questions why the other bigger airlines are still making this charge unless it is a clear case of they do because they can!

[TominScotland]

However they do it, Ryanair have consistently had by far the best profits record of any of the LCAs so they must bve doing something right …… or wrong if you look at their employment record but that is another story….

[MartynSinclair]

Tom, i dont doubt your post, but it just doesnt make any sense at all.

Ryanair sells a ticket for £1 and then picks up the tax bill which can be as much as £35 per sector so each seat is costing the airline a negative £34.

Either I need a lesson in business, which I am sure someone will give me or all is not as it seems.

I dont quite agree though with the comment about Ryanair having “best profits”.

[DisgustedofSwieqi]

MartynSinclair

It’s a loss leader marketing ploy, makes perfect sense and this gambit be seen in retail parks and the high street every day.

One obviously tightly controls the amount of inventor sold at a loss and ensures that the whole inventory is sold at a profit.

[MartynSinclair]

Thanks DS, I understand that part, but if Ryanair are picking up everyones tax bill and not charging a fuel surcharge how on earth is the whole inventory (preumably a singular flight or route) sold at a profit. If margiins are that tight, a company should in theory not be able to survive financially under those circumstances.

[DisgustedofSwieqi]

They do not pick up very many people’s tax bills, in the bigger scheme of things.

They also have very careful yield management.

I’m not in the aviation sector (I am a consultant), but I use Ryanair as an example of a company who (a) understand their marketing position clealry, (b) ruthlessly pursue media/PR oppos, (c) promote skillfully and (d) are ruthless on cost control.

[MartynSinclair]

Thanks DS, I still dont get how Ryanair are able to not pass on the charges that most of the other airlines charge, irrespective how ruthless they are on cost control. Ultimately, if the accoutants are that ruthless, it must compromise safety.

Bottom line, fly Ryanair, the pax doesnt pay tax and doesnt pay the fuel surcharge.

It may be saturday night but I still dont get the economics. The airline has a terrible reputation, so it is not riding high on PR. Cost control is tight, (pilots have been known to sleep in their cars overnight) – something somewhere, does not make sense, except of course, its cheap!!!

[DisgustedofSwieqi]

Martyn

Try reading these links, these will give you a feel. The marketing position relies on subsidies to replace certain revenues that you mention.

http://www.whichbudget.com/blog/market-analysis/49-airlines/559-ryanair-business-model-under-a-new-light

http://econsultancy.com/uk/blog/6195-ryanair-marketing-genius-or-reputation-madness
http://alan.blog-city.com/ryanair.htm

Ryanair are a strange outfit, but I can’t help thinking that their CEO’s vision is way stronger than most and that he could run rings around most of his contemporaries.

[LuganoPirate]

I think this can be partly answered by the fact BA for example hedged their fuel purchases in 2008 two years forward at the fuel equivalent of $98 a barrel. When oil passed $100 everyone thought how clever they were, but that did not last long. Ryanair did not hedge but I believe they did so mid 2009 at the equivalent of $55 a barrel.

This was very clever of Ryanair and means their fuel price is now about half that of BA.

[MartynSinclair]

Interesting that one hand the airline accepts subsidies (quite legally) yet on the other hand it fails to collect tax from its passengers instead, covering the tax themselves (apparently).

Their cheap tickets seem nothing more than a sham.

[LuganoPirate]

I think we may be diverting from the original subject but it is an interesting thread.

Martyn, you mention subsidies, but guess how they finance all those planes? US taxpayers, that’s how! Their financing comes in the form of loans from the US ExIm bank. These are often subsidized in order to promote export trade and support US industry. They also use financial derivatives on their debt.

Have a look at the following. It is the company’s report forwarded to the US SEC. They have to disclose a lot more to the cousins than they would in Europe. It’s very illuminating and will answer a lot of your questions and probably cause us to ask a lot more!

http://www.ryanair.com/doc/investor/2010/20F_2010.pdf

[TominScotland]

Hi again

Maybe Martyn and any other users of this site who have not already done so should experience the business model Ryanair offers firsthand. Go to Ryanair.com and select your nearest Ryanair departure airport and book a day trip to anywhere – Paris Beauvais, Frankfurt Hahn, Oslo Torp etc (just don’t expect to be close to those cities) and choose dates with very low fares. Just see how they operate because that is the future of short-haul travel in Europe. Experience the sell, sell, sell from door closure to landing – soon the pilots will get involved, I am sure. Also experience the on-time arrival clarion call!! Already, many of the mainline airlines have had to alter or cut their services in response to LCA (particularly Ryanair) competition and more will follow – just think about the BA discussion relating to CE service on this site and why they are forced to downgrade theior offering. Given that what we do here usually follows what happens in the US, remember that by far the largest US domestic carrier and the most profitable by a mile is South West – the model for Ryanair.

Ryanair stats make interesting reading. By far the lowest costs per pax carried, the fewest employees per 1,000 pax, the highest proportion of airborne staff, the highest onboard sales on short-haul in Europe. That is how they do it. Of course they use the subsidies available but then all airlines do but they also focus on cost in way that few carriers are able to do.

So, do try out the experience, just as an education………

[DisgustedofSwieqi]

Martyn

You are missing something. The ‘free tickets’ are only a very small percentage of the total and the tax is collected in the vast majority of cases, i.e. these few tickets are loss leaders, but generate very good publicity – e.g. why are we discussing this here?

‘Sham’ means ‘pretence, bogus or false.’ These tickets are no more a sham than are vouchers used by many businesses for promotional purposes , for example on this site http://www.myvouchercodes.co.uk/?_$ja=cgid:1991966206|tsid:16878|cid:32478796|lid:119680355|mt:Phrase|nw:search|crid:6871275286|bku:1&gclid=CLuP7uqw2aQCFUKT3wod0yLK5w

Ryanair no doubt calculate very carefully how many euros they are prepared to burn on these promotions, just in the same way as the companies at the site above.

The genius of this gambit is that everyone loves a real freebie and talks about it QED!

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