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Ryanair Reports Last Quarter Loss...  
User currently offlineBeaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25
Posted (6 years 4 months 3 weeks 5 days 1 hour ago) and read 5071 times:

figures a bit unusual comming from Europe's biggest Low Cost- fuel price has cought up with Ryanair as well..
And one you have reached the limit of salable add-ons and so called "services",it gets down to the basics.
http://www.iht.com/articles/2008/06/03/business/03ryanair.php


Please respect animals - don't eat them...
27 replies: All unread, showing first 25:
 
User currently offlineElite From Hong Kong, joined Jun 2006, 2872 posts, RR: 10
Reply 1, posted (6 years 4 months 3 weeks 5 days 1 hour ago) and read 5033 times:

In the short term, they seem relatively confident about fuel prices and how well they will do.

http://news.bbc.co.uk/2/hi/business/7432731.stm


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2515 posts, RR: 1
Reply 2, posted (6 years 4 months 3 weeks 5 days ago) and read 4602 times:

From the BBC article :

He told the BBC that it appeared the airline was going to be able to absorb the current fuel increases, and he accused BA of driving up airline fares up in Europe through its fuel surcharges.

MOL, is a big liar... HE increases passenger charges here and there (Checked baggage, Credit Card, Priority Boarding, Check-IN) to offset high fuel prices and accuses BA of increasing its fuel surcharge and driving up fares in Europe. Well at least BA have decreased their fuel surcharge when fuel prices went down at some point. So from the 2, BA is the more transparent one. I think that people who are used to fly BA, will not desert it even if fuel surcharges are added whereas people flying FR will get up of surcharges piling up to their basic fares...



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineSketty222 From United Kingdom, joined Mar 2006, 1778 posts, RR: 3
Reply 3, posted (6 years 4 months 3 weeks 5 days ago) and read 4588 times:

The bbc states that Ryanair hope to break-even next year if fuel prices stay at around $130 a barrel. Now it has been reported both in the media and also here on A.net that fuel could rise upto £200 a barrel within the next 12 months. Where will this leave FR?

O'Leary also had his expected jab at BA by saying they are driving up the prices of European fares because of their fuel surcharge.
He then goes on to say that if people want addtional services like checking in bags and paying by credit card then they have to pay for this.
I know that these extra payments have been discussed in a previous thread so Im not debating the ethics of them but when it all adds up, these extra costs could be around the same as the fuel surcharges, could they not?

Lee



There's flying and then there's flying
User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 4, posted (6 years 4 months 3 weeks 5 days ago) and read 4588 times:

RYANAIR REPORTS RECORD PROFITS OF €481M UP 20%

"Delivering record profits and traffic during a year of much higher costs, is a testimony to the strength of the Ryanair lowest fare model. The principal highlights of the past year included:

After tax profit growth of 20% to €481m.
Traffic growth of 20% to 51m.
Added 30 new aircraft (year end fleet of 163 Boeing 737-800 jets).
Opened 3 new bases at Bournemouth, Edinburgh and Belfast and 201 new routes.
Improved punctuality and customer service figures at guaranteed lowest prices.
Increased stake in Aer Lingus plc to 29.2%.
Completed a €300m share buy back while still retaining €2.2bn in cash.

http://www.ryanair.com/site/EN/news....r=08&month=jun&story=reg-en-030608


User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 5, posted (6 years 4 months 3 weeks 5 days ago) and read 4562 times:

Quoting Sketty222 (Reply 4):
know that these extra payments have been discussed in a previous thread so Im not debating the ethics of them but when it all adds up, these extra costs could be around the same as the fuel surcharges, could they not?

The vast majority of those extra charges are optional - if you don't choose them, you don't pay for them. And when I fly FR I never choose them; indeed, I also don't pay by credit card to save extra money. However, you could argue that the extra charges, even though the vast majority of them are optional, unoffically constitute a fuel surcharge, although you must remember that they existed before extra high fuel, but, yes, they have been tweaked upwards in the past few months.

[Edited 2008-06-03 02:07:56]

User currently offlineDiesel1 From UK - Wales, joined Mar 2001, 1638 posts, RR: 11
Reply 6, posted (6 years 4 months 3 weeks 4 days 23 hours ago) and read 4407 times:



Quoting Beaucaire (Thread starter):



Quoting Sketty222 (Reply 4):
The bbc states that Ryanair hope to break-even next year if fuel prices stay at around $130 a barrel. Now it has been reported both in the media and also here on A.net that fuel could rise upto £200 a barrel within the next 12 months. Where will this leave FR?

That's the big question. Not just Ryanair, the whole industry.....



I don't like signatures...
User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 7, posted (6 years 4 months 3 weeks 4 days 23 hours ago) and read 4357 times:

It is naive to think that Ryanair would not increase prices to reflect higher fuel prices. That's like basic business.

What Ryanair mentions correctly is that it will never add a flat surcharge to the main ticket price to reflect high fuel costs. They will, logically, increase other fares (average flight fare, additional charges) to offset higher fuel costs.

Ryanair (and also easyJet) can easily say that they will never add a (flat) fuel surcharge: they don't have to. For one simple reason: they can just raise prices if they want.

Traditional carriers that participate in IATA pricing programs need to publish fares that are valid for the next season. These fares cannot be changed to reflect higher (fuel) costs; the only thing they can do is add a (fuel) surcharge to reflect the higher cost price.

As Ryanair (and easyJet, and some other LCCs) do not publish IATA fares, they can do with the fare whatever they want so they have no reason to call it a fuel surcharge.

For airlines that do charge fuel surcharges, it is quite uncomfortable, actually. It is economically better to increase prices and retain full control about these prices, instead of adding a fixed amount of money to every ticket. But due to the (ancient) publish fare rules, they just can't.

It is easy for Ryanair to shout about it, because (as long as they don't join IATA published fares programs) they will never have a reason to tag a price increase as fuel surcharge.

Next, Ryanair made the choice to rather increase the price of optional items than to increase the fare itself. Personally, I like this choice as it gives freedom of choice to the customers. And don't forget more and more carriers start charging for extra's.

The only "semi-optional" thing are the payment method surcharges. The only free card is Visa Electron, but this is not available in all countries (for example, it is not distributed in the Netherlands).


User currently offlineLinco22 From United Kingdom, joined Jun 2005, 1380 posts, RR: 15
Reply 8, posted (6 years 4 months 3 weeks 4 days 23 hours ago) and read 4357 times:

Without knowing a lot about the running costs of an airline, I think the aviation industry is set for a huge fall. Fuel costs will continue to rise and people simply wont be able to either afford to buy a ticket if fares are increased, or from airlines going bust and route not being flown.

It's all rather grim ahead.


User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 9, posted (6 years 4 months 3 weeks 4 days 23 hours ago) and read 4296 times:



Quoting Sketty222 (Reply 4):
The bbc states that Ryanair hope to break-even next year if fuel prices stay at around $130 a barrel. Now it has been reported both in the media and also here on A.net that fuel could rise upto £200 a barrel within the next 12 months. Where will this leave FR?

IMO, it is not as bad as it seems. When the US$ keeps on falling, the oil price will keep on rising, but this will not affect Euro-carriers as much as it will US-carriers, as Euro carriers will just get more Dollars for their Euros.

For European carriers, I think the risk of the US$ becoming stronger is more eminent.

With respect to Ryanair: they are in a good position. Their cost base is very low, their fleet is efficient, they won't be affected by rising fuel prices as much as others. Look at all European carriers still flying 737 classics and MD-80s, they hurt more.

Besides that, Ryanair can shrink (to reflect dropping demand) easy by selling 738s to airlines that currently fly 737 classics and MD-80s. Also, they can likely fire employees easier than traditional flag carriers.

With the newest routes, you can already see that Ryanair is "playing safe" by opening more domestic routes (demand on domestic routes fluctuates less than on holiday routes), like MRS-BRS, MRS-LIL, LBC-HHN, REU-SVQ, etc.


User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 10, posted (6 years 4 months 3 weeks 4 days 23 hours ago) and read 4124 times:



Quoting Joost (Reply 10):
cost base is very low, their fleet is efficient, they won't be affected by rising fuel prices as much as others.

FR's cost base already is very low, but it has recently sought to reduce costs still further by around €400m. Fortunately FR is a very focused airline, and focus is, I believe, a fundamental characteristic.


User currently offlineJWMD123 From Ireland, joined May 2006, 867 posts, RR: 0
Reply 11, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3961 times:



Quoting Costastic (Reply 6):
The vast majority of those extra charges are optional - if you don't choose them, you don't pay for them. And when I fly FR I never choose them; indeed, I also don't pay by credit card to save extra money.

Wish we had the luxury here in Ireland of not paying CC fees. FR do not take bookings using the local debit system (laser) and so all Irish customers have to pay mcard or visa so charges


User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 12, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3949 times:



Quoting Costastic (Reply 11):
FR's cost base already is very low, but it has recently sought to reduce costs still further by around €400m. Fortunately FR is a very focused airline, and focus is, I believe, a fundamental characteristic.

That's absolutely true and it is true for any industry.

For the coming years, I expect them mostly to cut salaries of the pilots. With the current state of the industry, the demand for pilots will reduce with every capacity reduction so FR will have a better negotiation position.


User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 13, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3864 times:



Quoting Joost (Reply 13):
For the coming years, I expect them mostly to cut salaries of the pilots. With the current state of the industry, the demand for pilots will reduce with every capacity reduction so FR will have a better negotiation position.

According to an FR training captain I have been talking to, FR captains normally get paid a lot of money. He said: "The money, as a Capt anyway, is vast."


User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 14, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3704 times:

Ryanair's pilot salaries are public:

Quote:

Senior pilots in Ryanair have excellent remuneration packages as follows:

Captains
UK: Up to £100,000 +
Eurozone: Up to €130,000 +

First Officers (1,500 hrs)
UK: Up to £70,000 +
Eurozone: Up to €80,000 +

At Ryanair there are no seniority lists and there are no complicated salary scales, you can expect to reach these amounts in 3 – 5 years. Senior captains who take on a training role can earn up to €160,000 in the Eurozone and £120,000 in the UK.

Source: http://www.ryanair.com/site/EN/about...=Jobs&sec=careers&ref=app_benefits

Seems quite okay  Wink


User currently offlineAl2637 From Ireland, joined Oct 2006, 407 posts, RR: 3
Reply 15, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3679 times:



Quoting Joost (Reply 7):
Traditional carriers that participate in IATA pricing programs need to publish fares that are valid for the next season. These fares cannot be changed to reflect higher (fuel) costs; the only thing they can do is add a (fuel) surcharge to reflect the higher cost price.

As Ryanair (and easyJet, and some other LCCs) do not publish IATA fares, they can do with the fare whatever they want so they have no reason to call it a fuel surcharge.

For airlines that do charge fuel surcharges, it is quite uncomfortable, actually. It is economically better to increase prices and retain full control about these prices, instead of adding a fixed amount of money to every ticket. But due to the (ancient) publish fare rules, they just can't.

It is easy for Ryanair to shout about it, because (as long as they don't join IATA published fares programs) they will never have a reason to tag a price increase as fuel surcharge.

I disagree with this argument. Airlines can modify their prices as much as they want without having to worry about IATA. They simply do it by opening and closing booking classes. In addition an airline can modify it's own fares as much as it wants, it's only the fares that are part of IATA distrubution that have restrcitions. Given the vast majority of fares are booked directly these days, it's not so much of a problem.

Also, I believe (and am open to correction), that an airline can ammend it's officially published IATA fares at anytime these days.


User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 16, posted (6 years 4 months 3 weeks 4 days 22 hours ago) and read 3669 times:



Quoting Joost (Reply 14):
Seems quite okay

More than quite, I think. But then you probably think the same.  Wink


User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 17, posted (6 years 4 months 3 weeks 4 days 21 hours ago) and read 3626 times:



Quoting Al2637 (Reply 15):

Of course what you're saying is true, for most of the fares the airlines can just modify them without any problem. I have been thinking about the "why" of the fuel surcharges. But AFAIK, there are a few routes that still have fixed price agreements (and therefore, they are subject to fuel surcharges) and that airlines choose to have a uniform policy. For example, it would be strange if flight A is be subject to a fuel surchage, and flight B is not (because it's a tarif-free destinations).


User currently offlineGreenjet From Ireland, joined Aug 2001, 959 posts, RR: 1
Reply 18, posted (6 years 4 months 3 weeks 4 days 14 hours ago) and read 2966 times:



Quoting JWMD123 (Reply 11):
Wish we had the luxury here in Ireland of not paying CC fees. FR do not take bookings using the local debit system (laser) and so all Irish customers have to pay mcard or visa so charges

Yep, had to pay €16 in credit card fees for a recent trip to the UK with the missus. Nice little earner for O'Leary. I'm tempted to ask for a wheelchair any time I fly that airline just so I can finally get some return on the "wheelchair levy".


User currently offlineScottB From United States of America, joined Jul 2000, 6795 posts, RR: 32
Reply 19, posted (6 years 4 months 3 weeks 4 days 9 hours ago) and read 2820 times:



Quoting Sketty222 (Reply 3):
The bbc states that Ryanair hope to break-even next year if fuel prices stay at around $130 a barrel. Now it has been reported both in the media and also here on A.net that fuel could rise upto £200 a barrel within the next 12 months. Where will this leave FR?

If oil truly does rise to £200 a barrel, there will be major disruptions across the entire industry. I wouldn't be surprised to see global capacity slashed by 50%, simply due to the unaffordability of air travel for many people.

Quoting Joost (Reply 9):
Besides that, Ryanair can shrink (to reflect dropping demand) easy by selling 738s to airlines that currently fly 737 classics and MD-80s. Also, they can likely fire employees easier than traditional flag carriers.

If fuel trebles from its current levels, I doubt that Ryanair would find many takers for its planes simply because so many airlines would be parking large fractions of their fleets.


User currently offlineRFields5421 From United States of America, joined Jul 2007, 7607 posts, RR: 32
Reply 20, posted (6 years 4 months 3 weeks 4 days 8 hours ago) and read 2745 times:



Quoting Sketty222 (Reply 3):
£200 a barrel within the next 12 months. Where will this leave FR?

They will be up a creek without a paddle, along with every other airline.

Fuel prices that high will have multiple effects which will cut passenger loads and revenue of all airlines. Most are already seeing such cuts.

People, and most significantly companies, will have less money to fly because their basic cost of living will increase.

Ticket prices or revenue in some other form must increase for the airlines to stay ahead of their cash flow.

That said, personally I think fuel prices will stabilize about 20-25% lower than today's levels this fall. The next price increase round will not come for three or five years - but prices of consumer goods will rise over that period as the fuel prices work into the system.

Airlines are actually luckier than retail and many other industries - people can understand why ticket prices go up 20% due to higher fuel costs.

They don't understand why the price of groceries goes up 20% due to the cost of fuel for transportation of product and energy for the store.


User currently offlineJoost From Netherlands, joined Apr 2005, 3171 posts, RR: 4
Reply 21, posted (6 years 4 months 3 weeks 3 days 23 hours ago) and read 2654 times:



Quoting RFields5421 (Reply 20):
Airlines are actually luckier than retail and many other industries - people can understand why ticket prices go up 20% due to higher fuel costs.

They don't understand why the price of groceries goes up 20% due to the cost of fuel for transportation of product and energy for the store.

Marketing-wise they are luckier, yes. But people will still buy food, even when it's more expensive, but they will travel less. Food for flights, so to say  Wink


User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1411 posts, RR: 1
Reply 22, posted (6 years 4 months 3 weeks 3 days 23 hours ago) and read 2614 times:

I'm not sure that there is much value added by saying that "airline X will suffer pain from fuel costs and have to cut back routes" as that will be true for all airlines.

The question is more "who will come out on top after the dust settles" and if you admire Ryanair's ruthless business efficiency, its focus and ability to control costs (and, as a businessman, I do - whether or not I choose to fly on them) then my guess is that they will still be around and many of their competitors won't be.

Whatever way you want to view it:

Quoting Costastic (Reply 4):
After tax profit growth of 20% to €481m.

is a pretty good performance in today's airline market.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,A388,BA11,BU31,B190, B461,B462,(..51 types..),VC10,WESX
User currently offlineCostastic From , joined Dec 1969, posts, RR:
Reply 23, posted (6 years 4 months 3 weeks 3 days 22 hours ago) and read 2559 times:

MOL said: "The airlines who will survive this period of higher oil prices and industry downturn are those with new cheaper fuel efficient aircraft, lower costs, substantial cash balances, low net debt and management who are ready to exploit downturns to drive costs lower and increase efficiency. No airline is better placed in Europe than Ryanair to trade through this downturn. We will therefore continue to grow, by lowering fares, taking market share from competitors, and expanding in markets where competitors either withdraw capacity or go bust. We believe that our earnings will rebound strongly when oil prices settle down, as we believe they will, and in the interim we will take the tough decisions necessary to lower our costs in this difficult period."*

Makes complete sense. However, MOL has contradicted himself: he has said on a few occasions that average fares will rise by 5%, yet he'll lower fares. I think this is explainable by the fact that there will continue to be regular sales - indeed, in May FR had two specials without taxes, which is peerless in one month - to help stimulate demand and to keep people flying. But outside sales fares will increase by around 5%.

* From http://www.uk-airport-news.info/stansted-airport-news-030608a.htm


User currently offlineBennett123 From United Kingdom, joined Aug 2004, 7701 posts, RR: 3
Reply 24, posted (6 years 4 months 3 weeks 3 days 14 hours ago) and read 2423 times:

He was also predicting the failure of Flybe and jet2.

I think that with mostly TP, Flybe is OK, but not sure about Jet2.


25 StarGoldLHR : If you play by Ryanairs rules.. they are very good.. Ive flown to Krakow from STN a number of times, one occasion was £0.00 + Taxes = £9.97. I took
26 Mhodgson : They are a bit of an unknown - I believe the group overall is in profit, though there is more to the group than just the airline. They do have advant
27 Joost : For these kind of airlines (part of a larger company), I'd not be too surprised if the owner (i.e. Dart Group) will just decide to cease the Jet2-ope
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