PPRuNe Forums - View Single Post - Ryanair
Thread: Ryanair
View Single Post
Old 19th Jun 2006, 22:35
  #226 (permalink)  
Sunfish
 
Join Date: Aug 2004
Location: moon
Posts: 3,564
Received 90 Likes on 33 Posts
But the point MM, is not how many are using it, but how many are repeat business. If the bulk of Ryanair's passengers (not punters) only use it a couple of times and then say "Never again", it does not bode well for Ryanair's future.

As for the quantity of travellers, well, If I buy a petrol station and sell petrol for 10p a litre, I'm going to get lots of customers aren't I? Aren't I a genius? Will the Financial Times swoon on my every word about my new business model? I sell my petrol at below cost, but of course my customers then will pay $5 for a newspaper right?

From my reading of their published accounts, the danger for Ryanair is that a very large chunk of their costs are attributable to running an airline, however only a small and declining percentage of their total profit comes from this activity. A large percentage of profit comes from "ancilliary" activities. This in my humble opinion is not very wise, as a change in passenger behaviour could reduce those profits and still leave the airline running costs intact.

I've had competitors in the printing industry once who always had to undercut my prices. It was pathological. Their idea was that they would eventually drive me and other competitors out of business, raise their prices and clean up. Guess who went under? It wasn't me. A lot of printing businesses gave a sigh of relief when this prat finally went bankrupt.
Sunfish is offline