Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Ryanair? How Does It Make A Profit?  
User currently offlineScotspanGSM From United Kingdom, joined Nov 2005, 51 posts, RR: 0
Posted (8 years 4 months 3 days 13 hours ago) and read 4783 times:

Its funny how everytime i take a ryanair flight its always half full, everyflight ! every 10-12 rows at the front and back rows are blocked off !. does anybody else think the 738 is 2 large 4 the airlines needs? how about the 737-600 or 700, , would that not suit its needs better. I have flown with them 25 times in the past 6 months and its the same, !!!!!! , half full or less ...

8 replies: All unread, jump to last
 
User currently offlinePlanesarecool From United Kingdom, joined Nov 2001, 4119 posts, RR: 11
Reply 1, posted (8 years 4 months 3 days 12 hours ago) and read 4721 times:

Depends what route you fly, and when. I flew Gatwick to Cork (which isn't really going to be a majorly popular route) on a saturday, two days after it was launched, and there were 125 seats taken, and 64 empty, which is pretty good really for a 3 day old route and on a saturday. And many flights are completely sold out for the days leading up to and after christmas.

User currently offlineDw9115 From United States of America, joined Dec 2005, 449 posts, RR: 2
Reply 2, posted (8 years 4 months 3 days 11 hours ago) and read 4694 times:

When I was in school at Embry-Riddle I did a report about Ryanair for a microeconomics class and what I found was that the flying billboards they had made them enough money to break even without any passengers on the flight. Now that was just one way they made cash the other and what I found to be the most important was that they have huge sales always and even give seats away a lot and all the passenger does is pay the taxes ,fees and a fuel surcharge. By doing that they are able to fill the plane easier and then they can make money by charging for a soda and some chips and maybe a beer or two. They also tried coping Southwest and have done a very good job of it and have created the Southwest effect (actual DOT and FAA term) at every single airport they fly into. Now they haven't been able to make the profit margins Southwest has achieved, but has come the closest to it by any airline. They also do fuel hedging and buying aircraft in bulk even if they do not need them so they can get a better deal and if they don't need them they can always sell them for a profit.

User currently offlineFJWH From Netherlands, joined May 2004, 968 posts, RR: 4
Reply 3, posted (8 years 4 months 3 days 9 hours ago) and read 4614 times:

I have flown STN - PGF - STN on FR 4 times now and every flight was almost full. (like 10 seats left)


FlightS in the next 3 months: MSP, PHX, MEM, NCE, TFS, BCN. All round trips from AMS
User currently offlineDazeflight From Germany, joined Jun 1999, 578 posts, RR: 2
Reply 4, posted (8 years 4 months 3 days 3 hours ago) and read 4451 times:

Quoting Dw9115 (Reply 2):
They also tried coping Southwest and have done a very good job of it and have created the Southwest effect (actual DOT and FAA term) at every single airport they fly into

b/s


User currently offlineSevenair From United Kingdom, joined Feb 2001, 1728 posts, RR: 0
Reply 5, posted (8 years 4 months 3 days 3 hours ago) and read 4425 times:

Not to metion the high price busses that FR run in conjunction with local companies such as the Charlroi to BRU City Centre, was a lot of money. The also sell bus tickets onboard for ordinary services. Then there is the wine club, the CONSTANT pushing of products; duty free (or whatever), drinks, snacks, scratchcards, creditcards, gift vouchers, phonecards-have I forgot anything ? I think the busses are a nice little earner, as are the billboards. As well as adding a few quid on to the 'taxes and charges'. Also, getting pilots and cabin crew to pay their own training.

And, if you book last minute, you can pay silly moey, for example, I once prices a single from NCL-DUB, it was 169.99 + tax, so if you have one or two pax payin this price, coupled with the lower yield tickets (which were booked in advance; therefore you have been earning interest on this money), and the inflight sales, then you make a profit Smile


User currently offlinePtrjong From Netherlands, joined Mar 2005, 3884 posts, RR: 19
Reply 6, posted (8 years 4 months 3 days 3 hours ago) and read 4382 times:

Quoting Dw9115 (Reply 2):
the flying billboards they had made them enough money to break even without any passengers on the flight

It seems to me that the number of potential customers who get a good look at your 'flying' billboard, either at the airport or in the air, is relatively small. Therefore I find it hard to believe that revenue out of this is so high.
Anybody know how much you have to pay Ryanair for your ad on their plane?

To put it in another way, if you can fly a gas-guzzling airliner around and cover the costs just by selling it as advertising space, the world has really gone mad.

Peter



The only difference between me and a madman is that I am not mad (Salvador Dali)
User currently offlineDw9115 From United States of America, joined Dec 2005, 449 posts, RR: 2
Reply 7, posted (8 years 4 months 3 days 1 hour ago) and read 4290 times:

Quoting Dazeflight (Reply 4):
b/s

Are you saying that what I said (They also tried coping Southwest and have done a very good job of it and have created the Southwest effect (actual DOT and FAA term) at every single airport they fly into) is bull shit well if you do not believe the term you can look it up at the FAA or department of Transportation website. Also Ryanair has created the Southwesr effect at every airport it flies into. If you still do not understand what the Southwest effect is I will explain it to you I hope you will be able to understand. If you do not believe Ryanair is coping Southwest well here is a little history for you as well. In 1990 Michael O'Leary visited Dallas and Southwest Airlines and liked what he saw and later that year and after copying the Southwest Airlines low fares model the airline is re-launched under new management as Europe’s first low fares airline. Ryanair now offers the lowest fares in every market, high frequency flights, moving to a single aircraft fleet type, scrapping free drinks and expensive meals on board but reducing the lowest fares from £99 to just £59 return and on. He was later appointed Chief Executive on January 1, 1994.

The Southwest Effect

The U.S. Department of Transportation (DOT) has determined that when Southwest Airlines begins serving a new city, a phenomenon occurs. This consistent phenomenon was termed the "Southwest Effect" by DOT officials in a 1993 study. The most noted aspect of the "Southwest Effect" is that the average fare decreases and the number of passengers dramatically increases.

The traffic increases are not all attributable to passengers traveling on Southwest Airlines, however. Airports enjoy significant increases in overall traffic after Southwest "comes to town."

For example, one year after Southwest Airlines opened service between Providence and Baltimore/Washington, average fares between the two cities dropped by 73 percent and passenger traffic soared by 782 percent, with more than a half million people flying this route. In fact, Rhode Island's T.F. Green Airport became the fastest growing airport in 1997 after Southwest started service. Overall airport traffic leaped 88 % during Southwest's first year of service. The growth was so rapid the airport rushed to add 1,000 additional parking spaces a year ahead of schedule.

A recent study completed by the Office of Aviation and International Affairs found that the Southwest Effect still holds true today, despite the post September 11, 2001 decline in air travel. The study, focusing on Southwest's arrival in Philadelphia, proved that not only did fares fall in the majority of shorthaul, mediumhaul, and longhaul markets, but also that the passenger traffic significantly increased in markets served by Southwest. Fares between Philadelphia and both Manchester and Providence fell by more than 80% and ten times more passengers boarded these flights than ever before. Passenger traffic on flights to Los Angeles increased by 69% and the fares were decreased by 36%. Air travelers in Philadelphia paid fares that were 20% above the national before the arrival of Southwest Airlines. Now, those same travelers, less than a year after Southwest entered their market, enjoy fares that fall below the national average.

Other examples of Southwest's positive impact on overall airport traffic:

Albany International Airport - Boardings at Albany International Airport soared to a record 1.44 million in 2000, up 22.5% over 1999. Southwest began service at the airport in May 2000.


Bradley International Airport - Since Southwest began service in 1999 at Bradley, the airport set a new single-month passenger record in March at over 600,000 passengers, up 20.8% March 1999. Bradley reported a record 7.3 million passengers in 2000.


Long Island MacArthur Airport - Overall traffic rose 107% in 1999 to almost 160,000 passengers from just over 77,000 passengers. In 1999, the number of passengers traveling from MacArthur rose 133% over 1998.
Southwest also has an incredible effect on the number of travelers between destinations the airline serves. Before Southwest Airlines began service to Hartford, Connecticut, very few people traveled between Hartford and Baltimore. In fact, in the third quarter of 1999, only 19,030 people paid an average one-way fare of $146 to travel from Hartford to Baltimore. Southwest Airlines started service between those two cities on Oct. 31, 1999. By the end of the second quarter of 2000, the number of passengers traveling from Hartford to Baltimore had increased to 91,890, and they were paying an average of $55 each way. Incredibly, that city pair went from being the 1,063th busiest city pair in the nation to being the 248th busiest city pair in the nation.

This phenomenon is not new. Before Southwest began service between Baltimore and Chicago's Midway Airport in September 1993, only 3,530 passengers paid $121 one-way to travel the route in the first quarter of 1993. By the end of the fourth quarter of 1997, the number of passengers had increased to 100,390, and the one-way fare had dropped to an average of $79. That market went from being the 240th busiest city pair in terms of number of passengers to being the 43rd busiest market in the United States.

Quoting Ptrjong (Reply 6):
It seems to me that the number of potential customers who get a good look at your 'flying' billboard, either at the airport or in the air, is relatively small. Therefore I find it hard to believe that revenue out of this is so high.
Anybody know how much you have to pay Ryanair for your ad on their plane?

To put it in another way, if you can fly a gas-guzzling airliner around and cover the costs just by selling it as advertising space, the world has really gone mad.

That's how Hooters Air makes it's money it is paid a fee from the Hooters restaurant's every month for using it's aircraft as ads. Hooters on the other hand does not have to tell how much they get because they are a private company however Ryanair is not and has to tell in it's quaterly and yearly filling because it is a publicly traded company however they only list the total amout for all planes that are flying as billboards and depending on the client it varies. You can simply do the math they usually have 10 planes in billboards and the amount they are paid is on their web site so divide that by ten then get the other numbers from the Boeing website and break it down and you got it or you could just do what I did and call them directly and wait about a month and get 2000 pages of stuff and sort through it and you got in. You do have to realize when I did this it was in 2002 and gas has went up a lot sense then so it may not pay as much it once did.


User currently offlineStarGoldLHR From Heard and McDonald Islands, joined Feb 2004, 1529 posts, RR: 1
Reply 8, posted (8 years 4 months 3 days 1 hour ago) and read 4273 times:

I thought Ryanair used to get subsidies to fly to certain regional airports to encourage people to fly to their towns,

Then they do the same again at the other end, and hence you have a route paid for at both ends.

I think the EU put a stop to direct incentives where Ryanair used Local Government owned airports, but where the Airport is privately managed this is not the case and a local government is allowed to encourage new business growth in the area by incentives.

A friend of mine recently told me Ryanair approached Krakow City, in Poland about setting up a hub here with eventually upto 10 planes and 200 jobs. In return Ryanair wanted free landing, airport facilities and taxfree status to use Krakow as a base, buildings, plus a profit share of transport to the city and subsidized advertising.

The government didnt respond and for the time being Ryanair has decieded not to continue with a "Polish" hub.
I heard Wizzair may have had a part to play here.



So far in 2008 45 flights and Gold already. JFK, IAD, LGA, SIN, HKG, NRT, AKL, PPT, LAX still to book ! Home Airport LCY
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Star Alliance Silver/ How Does It Work On Partners posted Sun Dec 10 2006 21:38:07 by HAMAD
Circular Runway At ONZ, How Does It Work? posted Mon Sep 11 2006 18:14:07 by Falstaff
Does It Make Sense To Add A Runway To EWR? posted Thu Aug 3 2006 01:29:01 by JEdward
WN Assigned Seating Out Of SAN. How Does It Work? posted Mon Jul 31 2006 21:10:29 by FutureSDPDcop
IG From VRN: How Does It Perform? posted Mon Jan 23 2006 15:01:04 by Pe@rson
Atis - How Does It Work? posted Tue Jan 3 2006 01:19:30 by Jorge1812
Air Bosna A.k.a. B&H Airlines How Does It Go? posted Wed Oct 12 2005 16:26:19 by JMJAirways
Staff Tickets,standby,ID90s Etc:How Does It Work? posted Wed Jun 15 2005 00:00:35 by Fbgdavidson
Orders PR At Airshows - How Does It Work? posted Tue May 31 2005 13:42:38 by Art
US To PTY On February, Does It Make Sense? posted Fri Jan 14 2005 15:26:59 by CM767