Archive for the 'Ryanair' Category
May 20 2008
I think it’s helpful to look to Ryanair to see what new fees those of us in the US can look forward to in the next year: The low cost leader previously had allowed those who had checked in online to go through priority boarding for free. The result? The priority boarding line was often longer than the non-priority boarding line. So they’ve come up with a better solution: It’ll now cost you GBP4 (or 5 Euro, about $8) to get priority boarding. Online check in is still free (for now).
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March 18 2008
I’ve seen a boatload of articles that note similarities between Skybus and Ryanair (their low fares and low frills being the obvious ones), but I thought it was important to mention that they are actually fundamentally different models. And this difference is why one makes money and the other likely will not.
Ryanair’s model has succeeded because their costs are low, of course, but also because they’ve built a network that of holiday and business destinations served by large cities across Europe. Ryanair has gained notoriety for flying to tertiary and generally unserved airports across Europe. But this misses a larger point: that they have built a series of bases across the Continent in large cities, allowing them to serve a large number of smaller cities from that base once or twice a day profitably. Ryanair’s bases include Rome, London, Madrid, Dusseldorf and others.
Skybus has one base in a mid-sized city trying to serve an assortment of primarily tertiary airports in business and holiday destinations. Most of these tertiary cities have neither the bus nor train infrastructure to bring passengers to the city center. Then once in the city, passengers need a car to get around (unlike in Europe, where many cities are well served by public transport).
On the cost front, Skybus has not been able to get costs anywhere near as low as Ryanair, meaning that they are unable to turn a profit when their revenues are also not where they need to be. Certainly, they’re getting hurt by high fuel costs; but so is Ryanair. It is the fundamental business — the single base in a mid-sized city, serving underdesired destinations. Imagine Ryanair with one base in Bologna, Italy. That’s the difference.
But all hope is not lost. Skybus is not a terrible idea; comparing it to Ryanair is a terrible idea. And in a bit of good news, they’ve started to make adjustments away from their original plan to make the airline look a bit more like…well, Allegiant. Allegiant (I’m a shareholder, for full disclosure) serves tertiary cities from Vegas, Tampa, Orlando and a few other leisure destinations. They serve these cities a handful of times a week in most cases, but they face roughly no competition. Even with their high cost aircraft, they’re profitable.
Skybus is going to announce that new flights from Chicopee, MA (serving Hartford-ish) and Richmond to St. Augustine, Florida, with Chicopee getting an additional flight to Punta Gorda, Florida. Skybus has already starting serving Florida from Portsmouth, NH, and Greensboro, NC. These routes have done well. And from these moves, you can see a route structure that looks like Allegiant…in a good way. There are plenty of destinations in Florida that are underserved, and Skybus is already flying to some of these. Taking the Ryanair strategy of flying to every little town in France that has a former Air Force base near it, Skybus can fly from unserved destinations in the northeast and midwest to unserved parts of Florida. The world does not need more flights from the northeast to Fort Lauderdale. But it could use 4-times a week service from Portsmouth to Punta Gorda.
Skybus is starting to move toward this strategy, and I commend them for it. They’ve also been quick to eliminate service when it’s not working (another Allegiant hallmark). There’s plenty of room for Allegiant and Skybus to co-exist. And if they listen to me, I’m pretty sure Skybus will thrive as well. (Note: sometimes it’s not a good idea to listen to me.)
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February 08 2008
Airline reservations systems are notoriously complex — the integration of US Airways’ with America West’s was a major issue when the two carriers merged.
But it’s still a bit of a surprise to read that Ryanair will shut its website for 3 days (Feb 22-25) as they switch to a new booking system. The move will likely cost them about $45 million in missed bookings, as about 98% of their reservations come through their website. Their call center (centre) also will be unavailable for reservations. In addition - and this is important if you have a ticket - you won’t be able to make changes during that period either.
It’s just a matter of time before Michael O’Leary tells customers not to complain about the shutdown because at Ryanair’s fares, you can’t possibly expect to actually be able to book tickets.
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January 30 2008
Just a day after annoying the president of France with an ad poking a bit of fun at him, Ryanair has had another advertising problem: the British Advertising Standards Agency (ASA) said that an ad showing a schoolgirl with the tagline promising the “hottest back to school fares” was “irresponsible and offensive.”
In response, a Ryanair spokesperson said, “We will not be withdrawing this ad and we will not provide the ASA — Absurd Silly Asses — with any of the undertakings they seek.” There ya go.
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January 24 2008
Ryanair announced an increase in the fees it charges for checking luggage to GBP 6 (about $12, $13 if you pay in Euro). The carrier has said that it will keep increasing bag check charges until 50% of passengers only use carry ons. They also increased the fee to check in at the airport to GBP 3.
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October 01 2007
I didn’t see this one coming:
Newsday is reporting that Ryanair is in talks with officials at Long Island-MacArthur Airport in Islip about launching flights to Dublin in the spring. I think this article is a tad premature (an annual conference on new airline routes just wrapped up, and I’m guessing they must’ve met there), as Ryanair’s CEO has already said that Ryanair won’t fly trans-Atlantic flights under the Ryanair name.
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August 09 2007
Say goodbye to Ryanair’s so-called "free" fares: The British government has told 13 airlines that their advertisements and websites must show the full price of a ticket, not the pre-tax fare they’ve been advertising. These carriers have already complied, and you’ll noticed on Ryanair’s site that their claim of GBP 0.01 tickets has disappeared and has been replaced with GBP 10 fares that include all taxes. The US government should step in and do the same here, where the difference between advertised fare and actual price can be more than $300 on many international tickets.
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August 08 2007
47 teenagers were forced into a 22 hour journey from London to Galway (in Ireland, for those of us in the US) after Ryanair staff refused to let them board because they arrived at the departure gate for their flight 2 minutes late. Oh, they were late because their connecting flight on Ryanair from Denmark was 5 hours late.
The airline offered to let the students fly standby for 50 Euro each, but (wisely) the parents with them on the trip didn’t want to do that because it would’ve meant splitting up the group. So, they took a bus to a ferry and 22 hours later arrived home. Because they were 2 minutes late for a flight. A delay caused by the airline. Nice!
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June 27 2007
Probably not. The Irish carrier said that they expect the European Commission to reject its proposal to purchase Aer Lingus over competition concerns. Michael O’Leary, the outspoken CEO of Ryanair, said that the rejection is unlawful, considering the Commission has greenlighted the Air France/KLM and Lufthansa/SWISS mergers, combinations which have far more impact. This won’t be the last we hear from O’Leary on this matter. Meanwhile, Aer Lingus, which didn’t want to be purchased in the first place, is gloating.
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May 11 2007
Ryanair has been bashed repeatedly for being consumer unfriendly, but they announced a very consumer-happy move yesterday: all of their advertised fares will now include taxes. While this seems like a small deal, advertised fares can have upwards of $150 in taxes missing, so that $99 advertised fare to London actually works out to be $375. Quite a difference. US carriers have (obviously) fought including these fees in their fares, but it’s ridiculous that they don’t…
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Ryanair to Charge for Priority Boarding