Originally Posted by
bigdaviet
I presume the “20% cuts” are just bluster and in fact are the normal cuts you would expect in winter. But if they really do scale back significantly due to strike action it just paved the wAy for the “rivals circling” to poach more FR pilots and expand their own operations.
Exactly
Let's also not forget that a very fundamental aspect of the Lo-Co model is maximizing utilization of capital assets i.e. keeping planes in the air as much as possible.
A plane sat on the ground earns nothing in fares and ancillary revenue (in flight sales) but still has depreciation/finance costs, plus storage and scheduled maintenance costs. Grounding planes in winter can make financial sense, but only if the same assets are fully utilized during the busier summer months.
So it doesn't matter if FR decide to relocate planes to Timbuktu - if they don't have enough crews to keep them in the air
at the same or better level of utilization this will not only diminish revenues, but also increase the cost base relative to the remaining revenue. Ryanair's profitability is fragile, precisely because it is built on maximised efficiency; any loss of efficiency has a bigger impact compared to other airlines.
New bases and routes take some time to build traffic and load factor etc (this by FR own admission) so there can be no
business sense at all in relocating assets from a mature market with close to maximum utilization (Ireland) into the unknown (Poland). It can therefore only be seen as bluster or an act of desperation.