Originally Posted by Sunfish
As I have said before, the CEO appears to be following a well worn business strategy that assumes his competitors are idiots, and that he can drive them out of business by supplying product at less then the full cost of production. Once his competitors are out of business, he reasons, he can raise his prices and recoup his losses, then go on to make squillions.
A reading of the accounts suggests that the actual
business of flying people from one place to another doesn't make much money. Its the "extra's" that make the dough.
Unfortunately the "punters" eventually work this out and act accordingly.
MOL has historically made no bones about sometimes making very little from an actual passenger uplift; hence the mid-week one-ways for less than a tenner. The business model looks to get paid for that passenger by other ways, eg. on-board purchases or subsidies/payments from the regional airport to which the punter gets carried. That is: charge 50 quid and have the seat empty, or charge a tenner, fill the seat, cost a bit of marginal fuel but get 20 quid from the airport/local tourism authority for having brought the punter.