Everything thats goes around........

[touch&go]

From the BBC News Site tonight

Empty seats weigh on Ryanair


Could Ryanair be losing its touch?
Shares in no-frills airline Ryanair have fallen steeply after it revealed a drop in the average number of occupied seats on its flights last month.
The airline said it had filled 79% of its seats in June, down from 88% during the same period last year.

The decline comes as a blow to the low fares carrier, which needs to keep its so-called 'load factor' - the number of seats filled - high in order to sustain its recent record of strong profits growth.

"With the company also cutting fares, this implies that (profit margins) are coming down", said Nick van den Brul, airline analyst at BNP Paribas.

In the City, Ryanair shares lost altitude, falling more than 7% at 400p by the close of trading on Thursday.

Losing the magic?

Ryanair helped pioneer no-frills flying in Europe, luring passengers away from full-service carriers through rock-bottom fares achieved by shaving costs to the bone.

The company, which bought up rival low-cost carrier Buzz in January, said last month it was on course to overtake BA and Lufthansa as Europe's largest international airline within three years.

But the increase in the proportion of empty seats on Ryanair flights has stirred fears that the low-cost formula may have lost its magic.

News of Ryanair's woes coincided with figures from BA and Dutch national carrier KLM, which suggested that the full service airlines may be on the road to better health after fears over terrorism and the SARS virus slashed passenger numbers earlier this year.

KLM said its Asian routes were showing signs of recovery, while its load factor rose to 77.9% in June from 60.2% in May.

BA also reported higher passenger numbers and an improved load factor, although it warned that the outlook remained uncertain.

[eng123]

Ryanair's load factor was still higher than that quoted for KLM.Still making a fortune,still paying me a good wage.What's the problem? :D

[Joyce Tick]

Head in the sand while wearing rose-couloured specs - maybe?

[Mouser]

Both Ryanair & Easyjet relay on the Southeast pax to much, while the rest of the us are pooly served by low-cost, that said things are slowly improving.

[dontdoit]

"And now, the end is near" etc etc.....even the boss knows it:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2003/07/04/cneasy04.xml&menuId=242&sSheet=/money/2003/07/04/ixcity.html

Mind you, don't just take the Torygraph's word for it, British Airways has been named as the best low cost airline in a survey of more than 24,000 Guardian readers last weekend, beating off the likes of Ryanair and Easyjet to the win the title. (Guardian Travel section p14 - Saturday June 28, 2003).

[Golf Charlie Charlie]

A piece in today's Financial Times Lex column gives a brief comment on the comparative state of the airlines today. As any reader of pprune knows, all airlines have their problems, whatever part of the market they are in - largely due to the fact that seat yields remain too low across the board.


"""The airline sector has witnessed a rare reversal of fortunes. Budget airline Ryanair, now Europe's most valuable airline, confirmed that rapid growth is taking a toll on load factors. Two buffeted flag carriers, meanwhile, offered glimmers of hope. British Airways and KLM are slowly clawing their way back from the dark days of the Iraq war and the Sars virus earlier this year. But investors still lack firm evidence to underpin the 35 per cent rally in the European airline sector since March.

KLM's traffic and load factor on Asia Pacific routes remain weaker than a year ago, but, at 77.9 per cent, the load factor is well above May's 60.2 per cent. In recent weeks, daily load factors on Asian routes have exceeded 2002 levels. But this is on 20 per cent less capacity, and pushing through price rises is still impossible. British Airways' traffic rose 5.8 per cent in June, while passenger load factors also rose by two percentage points to 76.8 per cent. It is promising a marginally positive first quarter operating result. But yields remain weak, and therefore revenue in the first quarter is expected to be below the year earlier.

And as aircraft fill up, the willingness of staff to bow to necessary cost cutting measures is likely to dissipate rapidly.

While passengers are returning, as expected, international business and consumer confidence remain shaky. The prospect of airlines regaining pricing power - crucial for a strong recovery - still looks some way off. Achieving that could affect volumes, and the ability to raise prices could easily be hampered by capacity returning to the skies in anticipation of a broader upswing. Without evidence of stronger yields, the European airline rally looks premature."""

[Jack The Lad]

Haha Joyce; well, we all know you wear 'orange' coated specs!

Axe to grind?

[carbootking]

it seems every one wants ryanair to fail wot would happen then all the big boys will put up prices . all i know working at stansted all i ever see is long ques its worse than last year may be at some of their new routes and bases abroad their not doing so well all i know rynair bring a lot of business to every one without them and easyjet i and lots like me wouldnt have a job. im not a rynair worker but i admire oleary and people like him branson at least they got off their arses and did something instead of winge saying i could do this better if u can do it but most of u r all talk and jelous.

[niknak]

and I'd give you good odds that the vast majority of passengers who use the low cost airlines (me included), couldn't give a stuff.

I don't know what the break even factor is on a low cost B737 operation, but 79% seems pretty healthy to me, especially when we all know that only a small %age of those passengers will have actually paid the bottom rate low cost price.

On the many journeys I've had with Ryanair, Easyjet and the others, they've never let me or my family down, we know extactly what we're in for when we buy the tickets, and in many cases the service has been more helpful than with some of the mainline carriers.

I'm not so naieve as to expect the low cost services to always be there, but I were an airline share holder, I'd be more concerned with the performance of the likes of B.A. , who if they carry on in the present manner, won't be able to get credit for a pencil sharpener, never mind a B777.

[HZ123]

We are concerned about things and are addressing some of the issues with an effort to reduce more staff and introduce greater productivity. BA must continue to reduce costs and the downturn for the LC's is surely the reflection of the ressession which despite up beat comments from the government is starting to bite. In the SEast it is noticable by the many unsold properties for sale and the trend for houses to be auctioned.

BA and credit is not such a big issue as the a/c manufacturers are that desparate they virtually give the a/c away at this time with several hundred aircraft without a market.