h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Plus, the choice of airports: Ryanair have deliberately gone after the regional airports instead of trying to buy into the enormously expensive slots in the major hubs such as Heathrow and DeGaulle. So, even though passengers may complain about being sent to Charleroi, Stansted, Prestwick or Hahn, the landing charges from these regional locations are far, far smaller and Ryanair has significant leverage over these airports.

...and they make a lot of money from excess bagage charges - the allowance is very small (15kg?) and anything above that is pricey.

I've been told by an economist friend that the average pecentage for empty seats with normal fares is around 30% and that's what the low budget airlines calculate on, offering those seats at a range of very very cheap to cheap prices.

As already said, everything then paid's a bonus. Except the fuel cost for the extra passenger weight - how long before Ryanair introduce weight allowances and excess weight charges to go along with the baggage charges ?

Though their baggage allowance is only 5kg smaller than standard European Shorthaul for airlines like Lufthansa and BA.

Don't Ryanair get sponsorship from some of towns they fly to? I vaguely remember something either about them pulling out or the sponsorship being withdrawn for one of their out of town destiations.

I do have to say, cheap shorthaul flights is a great service for people who live in the regions. I am better served for airports in West Yorkshire (Leeds Bradford / Manchester) than I was in Gloucesterhire.

B

There was an issue with the airport in Charleroi. The EU ruled that Charleroi could not provide subsidies to Ryanair, and as far as I know Ryanair are trying to appeal that decision. They originally threatened to move all their business out of Charleroi when the decision was announced.

The company has a history of playing hardball with national governments. It regularly takes out full page ads in Ireland, slagging off our government because they are not doing enough to reduce landing fees and building private (low-cost) terminals. As a direct result of their actions, the government recently broke-up the Irish airport authority, so now the regional airports are in direct competition with each other. When you have the kind of traffic that Ryanair has, their threats are taken seriously.

That's right - it was a state aid decision. Normally, governments are not supposed to subsidise businesses in the EU except in special circumstances.

Charleroi is government owned, so it was effectively Belgian taxpayer money flowing into Ryanair's coffers.

The public airports argue that this puts them at a disadvantage with private airports - I personally don't think that bribing airlines to fly out of one airport rather than other is particularly sustainable in the long run.

sprout

The point being that Ryanair has income other than ticket sales, and it is intelligent about what it does not spend money on.

Is it publicly quoted? I am getting curious about its finances now...

B

It's on the NASDAQ. RYAAY.

Yes it is publicly quoted. It seems that another way it reduces its expenditures is that it hedges its fuel buying. I am not sure how that works exactly, but my guess is that it is buying fuel on the futures market in such a way that it is protected from price increases in avgas. This is something that other airlines can do of course, and I assume that they do.

The point I'm making really, is that there is more going on financially than "Customers pay £1 to fly to Pisa / Airline flies customer to Pisa".

B

quote - There was an issue with the airport in Charleroi. The EU ruled that Charleroi could not provide subsidies to Ryanair, and as far as I know Ryanair are trying to appeal that decision. They originally threatened to move all their business out of Charleroi when the decision was announced.

Can anyone please tell me why - on any level - it is moral to allow an airline to pressure an airport (any airport) to offer subsidies?

Is this not bullying of the highest order?

It's business. What does morality have to do with it? The 800 lb gorilla is always able to extract better discounts, more concessions, subsidies where available, relaxed conditions of labour and even getting the suppliers to do their work on occasion if they have enough pulling power. If there's no law against it, then if you don't do it, someone else surely will.

Ryanair certainly behaves like a bully, there is no doubting that, but it also plays in a market of cut-throat competition and in such sectors, these are often the accepted rules of the game by all participants.

Same goes with supermarkets, software, shipping, clothing, etc etc etc.

Also, maybe Charleroi *wanted* to offer subsidies? Did you ever hear of Charleroi before Ryanair came visiting? I didn't (which probably says more about my appalling knowledge of Belgian geography than anything else), and I doubt if the Ryanair story has been totally bad for Charleroi or its surrounding area. In fact, I would expect the opposite.

Ryanair issues threats of this nature quite often. Most of it is bluster and normally it's directed at politicians and not directly at the airports.

Charleroi does want to offer subsidies, no doubt about it.

Hardly anybody who flies into that airport goes to Charleroi (a depressed former coal and steel town, where the English hooligans were watercannoned by the police at Euro 2000) hence the marketing of the airport as Brussels south . All I'm saying is, don't take a taxi to the Manneken Pis...

But they get airport jobs and some tourism to the Ardennes (very pretty in parts, honest).

The problem is that it is public money, and as we don't want a return to the bad old days where governments threw money into failing businesses to keep them alive, state aid needs careful control, including for public airports.

sprout

Just thought I'd post some comments after my flight with Ryanair this weekend.

Both outward bound and return flights took off on time, and landed ahead of schedule.

There were no difficulties with our luggage, and a cumulative total on the weight was made, rather then being applied to each individual bag.

Passports were checked at check-in and at passport control and again a 3rd time at boarding - where they were definitely looked at - my daughter had her headphones in and had to be asked 3 times by the staff to open her passport properly so they could see her photo. Boarding cards were also checked thoroughly here (there was a passenger who was boarding the wrong flight, which they picked up on) and again on entering the aircraft.

I'd assumed that since my children are now 12 and 14 we'd no longer be "passengers travelling with small children", but the staff saw us in the crowd and ushered us forward.

OK you can't extrapolate from one person's experience, but I'll happily continue to use them when the price comparison with alternative routes is significant.

I could not be happier that they are behaving like a proper airline at last.

I bodes well for the future, so long as the spotlight on the whole no frills airline operation keeps up.