But serious does somebody have Michael O'Leary's Email ?
Ryanair success stalls, first quarterly loss.
Moderator: Latest news team
Hi all,
I do not want to play a (nice) ping-pong game with Bob or Erwin like they do 8) (I used to play ping-pong before, but that's a long time ago)
I only want to put some discussion topics / questions on the table:
1) The profit which we always are talking about, when speaking about Rynair, where does it come from? Does anyone have figures about the profitability of the different branches of their activities (fying, hotels, financial activities ???!!!). I remember that Swiss made also profit some time before they collapsed. But this was largely due to profit in activities that had almost nothing to do with their key business (hotels, gourmet, financing).
2) My point is that whatever 'business model' you apply, flying cost a lot of money. Does anyone know about a high quality study on this topic regarding Ryanair or other similar 'models'? What I mean is: look at an airplane, look at all people involved to make it fly --- incredible. YOU CAN'T DO THIS FOR FREE !!
3) Linked to that is my biggest problem with the Ryanair model (not with the airline and its wonderfull staff as such of course). Prices for large part of the offer does simple not match the real value of the product anymore! I know someone who flew with the boss of his company to one of the Ryanair destinations almost for free and then they booked a room for each of them at more than 200 EUR/night! Why does everyone think it is normal to pay only 10, 20 EUR for an airline ticket when a stupid bed can cost 200 EUR? - Of course it is very nice for 'normal' people to have cheaper tickets, but companies with revenues (???)
4) If the average price of Ryanair is 45 EUR one way (I am not sure wheather this is correct), so 90 return ticket + taxes, then it means that they have also a lot of very expensive tickets since they give that many tickets for free. Or is this not correct?
5) I sinceraly hope that Ryanair will survive and even grow since it is important for the people working there and a good network throughout Europe is very important as well. - On the other hand I am afraid that the Ryanair model is based on assumption of growth and 'eliminating' other carriers, and that could exactly be their problem - because if it does not happen the way it is foreseen, their model will erode and their profits too.
PS: I will never use Ryanair except for those destinations where I do not find an alternative (e.g. Liverpool, Valladolid). Since time is money and I merely use airplanes for my work, I can not afford it to go to Charleroi or to make long taxi/bus/rail drives from those secundary airports Ryanair is flying to. It is a pitty because I would like to experince them some day.
regards,
Danny
I do not want to play a (nice) ping-pong game with Bob or Erwin like they do 8) (I used to play ping-pong before, but that's a long time ago)
I only want to put some discussion topics / questions on the table:
1) The profit which we always are talking about, when speaking about Rynair, where does it come from? Does anyone have figures about the profitability of the different branches of their activities (fying, hotels, financial activities ???!!!). I remember that Swiss made also profit some time before they collapsed. But this was largely due to profit in activities that had almost nothing to do with their key business (hotels, gourmet, financing).
2) My point is that whatever 'business model' you apply, flying cost a lot of money. Does anyone know about a high quality study on this topic regarding Ryanair or other similar 'models'? What I mean is: look at an airplane, look at all people involved to make it fly --- incredible. YOU CAN'T DO THIS FOR FREE !!
3) Linked to that is my biggest problem with the Ryanair model (not with the airline and its wonderfull staff as such of course). Prices for large part of the offer does simple not match the real value of the product anymore! I know someone who flew with the boss of his company to one of the Ryanair destinations almost for free and then they booked a room for each of them at more than 200 EUR/night! Why does everyone think it is normal to pay only 10, 20 EUR for an airline ticket when a stupid bed can cost 200 EUR? - Of course it is very nice for 'normal' people to have cheaper tickets, but companies with revenues (???)
4) If the average price of Ryanair is 45 EUR one way (I am not sure wheather this is correct), so 90 return ticket + taxes, then it means that they have also a lot of very expensive tickets since they give that many tickets for free. Or is this not correct?
5) I sinceraly hope that Ryanair will survive and even grow since it is important for the people working there and a good network throughout Europe is very important as well. - On the other hand I am afraid that the Ryanair model is based on assumption of growth and 'eliminating' other carriers, and that could exactly be their problem - because if it does not happen the way it is foreseen, their model will erode and their profits too.
PS: I will never use Ryanair except for those destinations where I do not find an alternative (e.g. Liverpool, Valladolid). Since time is money and I merely use airplanes for my work, I can not afford it to go to Charleroi or to make long taxi/bus/rail drives from those secundary airports Ryanair is flying to. It is a pitty because I would like to experince them some day.
regards,
Danny
It is nice to see that you ask yourself these questions, so many are blinded by there cheap fares.
You have a few basic questions but who can give you the answers ? only Ryanair.
This company is not transparent, and stops everybody from looking behind the curtain.
"Ryanair is doing great and showed a passenger growth !" , but at the same time they made there first quarterly loss ! There is a big difference between propaganda and facts.
You have a few basic questions but who can give you the answers ? only Ryanair.
This company is not transparent, and stops everybody from looking behind the curtain.
"Ryanair is doing great and showed a passenger growth !" , but at the same time they made there first quarterly loss ! There is a big difference between propaganda and facts.
@Bob,
Very good point on the contact to Ryanair. I would also like very much to know their email address.
@Danny,
It might be a very good idea for O'Leary to create RyanHotels, RyanRent-a-Car, etc. instead of relying on the commissions they get from hotels and Hertz. A little bit like easyJet who owns also easy-a-lot-of things.
Very good point on the contact to Ryanair. I would also like very much to know their email address.
@Danny,
It might be a very good idea for O'Leary to create RyanHotels, RyanRent-a-Car, etc. instead of relying on the commissions they get from hotels and Hertz. A little bit like easyJet who owns also easy-a-lot-of things.
André
ex Sabena #26567
ex Sabena #26567
Hello everybody and thank you for your welcome.
Firstly, let me place my cards on the table - I travel regularly with Ryanair and (other low cost airlines) and also own a few shares in the company. Consequently, my natural inclination is to defend them. I also find that most press releases issued by Ryanair are best taken with a pinch of salt!
To try to answer some of the questions asked by Danny:
1) Ryanair profit figures are published in the investor relations section of their website. In my experience, these figures are no more or no less transparent than figures published by many other leading companies. What they term "ancillary revenue" includes car hire and hotel revenue and accounted for 15.1% of total revenues in the last quarter.
2) True - flying aircraft costs a lot of money. The trick is to make sure that you have more money coming in than you have going out!
3) What is the 'value' of the Ryanair product? They get you from A to B (where A and B are often underused 'secondary' airports) with no frills and no messing about. Surely you get what you pay for?
4) Absolutely - it's called revenue management. If you keep checking the Ryanair website for prices on a particular route on a particular day, you will find that the price fluctuates according to the number of seats that still have to be sold. I've seen prices range from UKP 0.01 to UKP 199 for one sector. RYR may not always be the cheapest on a given day for a given route, but their average fare is the lowest of any major european airline (according to their own figures!)
5) In their defence, RYR would claim that their low fares stimulate additional demand for air travel rather than force other carriers out of business.
It's worth re-iterating that RYR have not yet made their first quarterly loss (full year figures for 2003/4 are reported in June). However, they have acknowledged that yields are falling and so the next year will be a little more difficult for them.
What is for certain is that the next few years will be very interesting for airlines in the European low cost sector. Low-cost airlines have been springing up all over Europe at a rate that surely isn't sustainable.
Personally, I believe that both Easyjet and Ryanair will survive, grow and prosper, but I'm unconvinced as to whether many others will.
In the meantime, the winner is surely the customer - we've never had so much choice and flying in Europe has never been so affordable.
Firstly, let me place my cards on the table - I travel regularly with Ryanair and (other low cost airlines) and also own a few shares in the company. Consequently, my natural inclination is to defend them. I also find that most press releases issued by Ryanair are best taken with a pinch of salt!
To try to answer some of the questions asked by Danny:
1) Ryanair profit figures are published in the investor relations section of their website. In my experience, these figures are no more or no less transparent than figures published by many other leading companies. What they term "ancillary revenue" includes car hire and hotel revenue and accounted for 15.1% of total revenues in the last quarter.
2) True - flying aircraft costs a lot of money. The trick is to make sure that you have more money coming in than you have going out!
3) What is the 'value' of the Ryanair product? They get you from A to B (where A and B are often underused 'secondary' airports) with no frills and no messing about. Surely you get what you pay for?
4) Absolutely - it's called revenue management. If you keep checking the Ryanair website for prices on a particular route on a particular day, you will find that the price fluctuates according to the number of seats that still have to be sold. I've seen prices range from UKP 0.01 to UKP 199 for one sector. RYR may not always be the cheapest on a given day for a given route, but their average fare is the lowest of any major european airline (according to their own figures!)
5) In their defence, RYR would claim that their low fares stimulate additional demand for air travel rather than force other carriers out of business.
It's worth re-iterating that RYR have not yet made their first quarterly loss (full year figures for 2003/4 are reported in June). However, they have acknowledged that yields are falling and so the next year will be a little more difficult for them.
What is for certain is that the next few years will be very interesting for airlines in the European low cost sector. Low-cost airlines have been springing up all over Europe at a rate that surely isn't sustainable.
Personally, I believe that both Easyjet and Ryanair will survive, grow and prosper, but I'm unconvinced as to whether many others will.
In the meantime, the winner is surely the customer - we've never had so much choice and flying in Europe has never been so affordable.
CEO Michael O'Leary says the commission's ending of incentives from public airports will wind up raising fares.
Q: How does this decision affect your strategy?
A: The EC ruling will have two effects: It will increase costs at publicly owned airports throughout Europe, and this in turn will lead to higher fares. The EC itself said they expect fares to rise between 6 to 8 euros ($7.50 to $10) per passenger. I think it will be more than that. Now that these airports will have to impose the communist "everyone pays the same price rules," it's inevitable that we will pull some routes at these state-funded airports, and fares there may rise.
Q: Still other European airlines, including your main rival discount airline EasyJet, say they aren't worried.
A: Well, the reason why high-fare airlines including EasyJet welcome this decision is because it will increase airfares, which ultimately reduces the pressure on them. It's only in communist Europe where the commission can't even run its own bloody budget would they dream of telling ordinary people to pay higher fares so we can have some mythical level playing field.
Just look at what is happening with Virgin USA where a handful of cities are fighting one another, offering all sorts of incentives to get Virgin to set up its headquarters in their city. In contrast, the EC [says] that kind of competition is now illegal in Europe.
Q: What about fares and routes at privately run European airports?
A: We'll cut them. There's a fare war going on in Europe, and we will win it by reducing fares in the same way Southwest (LUV ) did in the 1990s. During the first calendar quarter of 2004 our fares will be 25% to 30% lower than in the comparable quarter of 2003. About 25% of that drop will be because of the weakness of sterling against the euro.
Q: The EC says it's trying to balance the goals of regional economic development in areas such as Chareleroi with the need to level the playing field and protect competition law.
A: The EC's decision is applying the economics of North Korea. What's bizarre about this decision is that they're about to screw publicly owned airports that will no longer be able to compete with private ones. So publicly owned airports like Charleroi, even if it's empty, must charge higher prices.
Why should a Wal-Mart located outside a city center, for example, pay the same rent as those in city-center locations?
In every marketplace, even the state-aid rules allow an underused asset to discount its prices in order to build utilization. Before we showed up, Charleroi had no passengers, no income, and no money. Today they have all three. I've been told that the Walloonian authority that runs the airport has received 13 different offers from the private sector to buy it. What the EC should have done if they wanted a level playing field is tell all the complainers [other airlines and airports that protested the incentives Ryanair receives from airports] to go to Charleroi and get the same offer.
Q: Will you appeal the EC decision?
A: Yes, as soon as the EC publishes their decision, which we expect will be in the next few weeks. Yesterday three other airlines told me they plan to appeal as well.
The big difficulty with this case is that we haven't been able to submit anything to the EC because it's the Belgian authorities who are the defendants, not Ryanair. So part of the problem is that this was a case of one half of Belgium [the one that owns Brussels Zaventem, the city's main airport] suing the other bit that owns Charleroi. The Belgians handled it ineptly. The Belgian commissioner didn't know whether he was coming or going.
Q: You think you have a chance?
A: It's a certainty. In our appeal, the EC will have to justify why they're refusing to allow Charleroi to comply with the private market investor principle -- that's to deal on the same basis as privately owned airports. And secondly, the commission suggested yesterday that no private investor would do these deals. That was a downright lie because they know these deals are being done at privately owned airports all across Europe.
Q: You had your first profit warning in 14 years, seriously spooking investors. Have you expanded too fast?
A: Our rate of expansion this year is almost exactly the same as last year, and last year profits grew 59%. This year profits will decline by a possible 10%. But in both years operating costs were reduced by 8%, to 10%. The only difference is that last year average yields declined by 6%. This year, average yields have declined by 15%. This is not due to overcapacity. It's the result of the ongoing fare wars under way across Europe, and we're winning them.
It's like Southwest in the U.S. When they first went into California, their stock price fell by 40% to 50% due to fare wars with the likes of the United [Airlines] (UAL ) shuttle and other California carriers. Ten years later, Southwest owned California. Any share price jumps up and down, and ours is no exception. But as long as the basic business model is sound and you're executing it properly, nothing will stop you -- certainly not a bunch of EU commissioners who think everyone should pay higher fares
Q: How does this decision affect your strategy?
A: The EC ruling will have two effects: It will increase costs at publicly owned airports throughout Europe, and this in turn will lead to higher fares. The EC itself said they expect fares to rise between 6 to 8 euros ($7.50 to $10) per passenger. I think it will be more than that. Now that these airports will have to impose the communist "everyone pays the same price rules," it's inevitable that we will pull some routes at these state-funded airports, and fares there may rise.
Q: Still other European airlines, including your main rival discount airline EasyJet, say they aren't worried.
A: Well, the reason why high-fare airlines including EasyJet welcome this decision is because it will increase airfares, which ultimately reduces the pressure on them. It's only in communist Europe where the commission can't even run its own bloody budget would they dream of telling ordinary people to pay higher fares so we can have some mythical level playing field.
Just look at what is happening with Virgin USA where a handful of cities are fighting one another, offering all sorts of incentives to get Virgin to set up its headquarters in their city. In contrast, the EC [says] that kind of competition is now illegal in Europe.
Q: What about fares and routes at privately run European airports?
A: We'll cut them. There's a fare war going on in Europe, and we will win it by reducing fares in the same way Southwest (LUV ) did in the 1990s. During the first calendar quarter of 2004 our fares will be 25% to 30% lower than in the comparable quarter of 2003. About 25% of that drop will be because of the weakness of sterling against the euro.
Q: The EC says it's trying to balance the goals of regional economic development in areas such as Chareleroi with the need to level the playing field and protect competition law.
A: The EC's decision is applying the economics of North Korea. What's bizarre about this decision is that they're about to screw publicly owned airports that will no longer be able to compete with private ones. So publicly owned airports like Charleroi, even if it's empty, must charge higher prices.
Why should a Wal-Mart located outside a city center, for example, pay the same rent as those in city-center locations?
In every marketplace, even the state-aid rules allow an underused asset to discount its prices in order to build utilization. Before we showed up, Charleroi had no passengers, no income, and no money. Today they have all three. I've been told that the Walloonian authority that runs the airport has received 13 different offers from the private sector to buy it. What the EC should have done if they wanted a level playing field is tell all the complainers [other airlines and airports that protested the incentives Ryanair receives from airports] to go to Charleroi and get the same offer.
Q: Will you appeal the EC decision?
A: Yes, as soon as the EC publishes their decision, which we expect will be in the next few weeks. Yesterday three other airlines told me they plan to appeal as well.
The big difficulty with this case is that we haven't been able to submit anything to the EC because it's the Belgian authorities who are the defendants, not Ryanair. So part of the problem is that this was a case of one half of Belgium [the one that owns Brussels Zaventem, the city's main airport] suing the other bit that owns Charleroi. The Belgians handled it ineptly. The Belgian commissioner didn't know whether he was coming or going.
Q: You think you have a chance?
A: It's a certainty. In our appeal, the EC will have to justify why they're refusing to allow Charleroi to comply with the private market investor principle -- that's to deal on the same basis as privately owned airports. And secondly, the commission suggested yesterday that no private investor would do these deals. That was a downright lie because they know these deals are being done at privately owned airports all across Europe.
Q: You had your first profit warning in 14 years, seriously spooking investors. Have you expanded too fast?
A: Our rate of expansion this year is almost exactly the same as last year, and last year profits grew 59%. This year profits will decline by a possible 10%. But in both years operating costs were reduced by 8%, to 10%. The only difference is that last year average yields declined by 6%. This year, average yields have declined by 15%. This is not due to overcapacity. It's the result of the ongoing fare wars under way across Europe, and we're winning them.
It's like Southwest in the U.S. When they first went into California, their stock price fell by 40% to 50% due to fare wars with the likes of the United [Airlines] (UAL ) shuttle and other California carriers. Ten years later, Southwest owned California. Any share price jumps up and down, and ours is no exception. But as long as the basic business model is sound and you're executing it properly, nothing will stop you -- certainly not a bunch of EU commissioners who think everyone should pay higher fares
Good interview Bob and sorry but he is making a point, especially when he compares his business with a Wall-Mart outside the citycenter. He is flying to B locations and in that case he is right to have lower costs. Also what happend in the 90's with Southwest is indeed comparable with their situation now. Hmmmmm I am very curious who are the other 3 carriers that will go to appeal also. I am going to follow this closely to see what is coming out of it.
Greetz,
Erwin
Greetz,
Erwin
A Whole Different Animal
I can't find where I have read it anymore, but easyJet loses money in the calm wintermonths (at least last year). They just make up for it in the summer.
So what's so important about Ryanair's quarterly loss? I haven't seen any "Easyjet quarterly loss"-topic in the past here, and nobody is suggesting they will collapse...
I do think the fact that they can't be reached online is their biggest problem, but let's hope it will change in the future... The just started to allow online-changes to your bookings (for less €€), let's hope this is the next step...
It does fit in their strategy, because you would have to hire a lot of people to check the mail, and that would drive up ticket prices...
to sn26567:
easyJet doesn't own the easy-hotel/car/cinema/cruises/... (there are more to come)
It's the other way around: the founder of easyJet, mr Stelios, owns them.
easyJet will get revenues from the passengers it delivers to them, I suppose, just like Ryanair...
So what's so important about Ryanair's quarterly loss? I haven't seen any "Easyjet quarterly loss"-topic in the past here, and nobody is suggesting they will collapse...
I do think the fact that they can't be reached online is their biggest problem, but let's hope it will change in the future... The just started to allow online-changes to your bookings (for less €€), let's hope this is the next step...
It does fit in their strategy, because you would have to hire a lot of people to check the mail, and that would drive up ticket prices...
to sn26567:
easyJet doesn't own the easy-hotel/car/cinema/cruises/... (there are more to come)
It's the other way around: the founder of easyJet, mr Stelios, owns them.
easyJet will get revenues from the passengers it delivers to them, I suppose, just like Ryanair...
I have Ryanair's contact information (E-Mail) I just send them something very interesting, now I have to wait and see if they answer 8) .
And NO Ben I didn't ask for your new B738 with nice leather seats, for your next flight !!!
It is unbelievable how often Luchtzak appears when you search for something on-line, woooaaaw
I just send them something very interesting, now I have to wait and see if they answer 8) . And NO Ben I didn't ask for your new B738 with nice leather seats, for your next flight !!!
It is unbelievable how often Luchtzak appears when you search for something on-line, woooaaaw
Bob, did you send them your CV?BobClaes wrote:I have Ryanair's contact information (E-Mail)
And NO Ben I didn't ask for your new B738 with nice leather seats, for your next flight !!!
A bit to take over Ryanair and turn it into Bobair?
By the way, there is no need to forward my request to Ryanair since Big Brother is watching us... and it has already done the trick with Luxair... so why not with the Irish carrier?
Regards
BeN
BobClaes,
You should have mentioned that the interview of O'lEary appeared in Business Week online.
Is that asking too much?
Yes, I know, Belgium has more important priorities: the rights of asylum seekers or the vote of foreigners
You should have mentioned that the interview of O'lEary appeared in Business Week online.
This is unfortunatley true. Belgium does not have a consistent aviation policy. The federal government should bring all the regional governments together, get them to agree on a national aviation policy that includes night fligts, expansion plans, etc., and follow the agreement with a good public relations campaign to promote Belgian aviation as a whole.Michael O'Leary wrote:The big difficulty with this case is that we haven't been able to submit anything to the EC because it's the Belgian authorities who are the defendants, not Ryanair. So part of the problem is that this was a case of one half of Belgium [the one that owns Brussels Zaventem, the city's main airport] suing the other bit that owns Charleroi. The Belgians handled it ineptly. The Belgian commissioner didn't know whether he was coming or going.
Is that asking too much?
Yes, I know, Belgium has more important priorities: the rights of asylum seekers or the vote of foreigners
Last edited by sn26567 on 12 Feb 2004, 17:09, edited 1 time in total.
André
ex Sabena #26567
ex Sabena #26567
This week in BIZZ magazine :
Ryanair's secret how to make money
www.bizzmagazine.be/NL/default.asp
I dont have time to go to a shop.... To bad!!!
@Ben - I didnt send my resume, RYR has it already.
@A318 - You can have there email, but first I like to see if I get an anwer.
Ryanair's secret how to make money
www.bizzmagazine.be/NL/default.asp
I dont have time to go to a shop.... To bad!!!
@Ben - I didnt send my resume, RYR has it already.
@A318 - You can have there email, but first I like to see if I get an anwer.
So, if you did not send them your CV since it has already been done, it must be a bid to take over RyanairBobClaes wrote:I dont have time to go to a shop.... To bad!!!
@Ben - I didnt send my resume, RYR has it already.
@A318 - You can have there email, but first I like to see if I get an anwer.
As a result, we all understand that buying an airline must be a time-consuming activity
If you are the new owner, we will not need their e-mail since we'll forward our requests, suggestions, wise advice directly to you!
Regard and keep up the job... to improve it
BEN
Yeah, JetBob sounds good.
But anyway, my interview with Ryanair was some time ago. RYR work's with selection agency's so you never really get to meet the people running this bus company.
So after some time when it gets serious, you meet the RYR HR people and thats where I started to get disappointed. I have no problem talking about it but thats a total different subject. But to keep it short, I walked away from it without any hard feelings.
So you don't have to think that I talk bad about RYR because what happened in the past, I would use a false name if that was the case, why would I expose myself ?. It is a company with a great future but I cant stand Michael O'Leary, his decisions are the reason why workers are unhappy, and customers see that....every day !.
fftopic: but now you know....
Did somebody get BIZZ, the magazine... like to know what its saying about RYR.
But anyway, my interview with Ryanair was some time ago. RYR work's with selection agency's so you never really get to meet the people running this bus company.
So after some time when it gets serious, you meet the RYR HR people and thats where I started to get disappointed. I have no problem talking about it but thats a total different subject. But to keep it short, I walked away from it without any hard feelings.
So you don't have to think that I talk bad about RYR because what happened in the past, I would use a false name if that was the case, why would I expose myself ?. It is a company with a great future but I cant stand Michael O'Leary, his decisions are the reason why workers are unhappy, and customers see that....every day !.
fftopic: but now you know....Did somebody get BIZZ, the magazine... like to know what its saying about RYR.