Originally Posted by
dh dragon
I agree, raise the fares. (...) NO TAXES. NO CHARGES (...) It seems crazy.
Let's face it. At the moment, Ryanair is in a kind of deadlock. Michael O'Leary, the great pioneer of low-cost airlines (yes, he deserves this title) who has proved to be a master in driving the costs of flying down, has come to the point where it's virtually impossible to lower his airline's lowest prices any more (unless he actually wanted to pay the passengers for flying). The hard-working staff is pretty efficient and brave, the potential is there, most of the flights arriving on time, very few cancellations, a reliable carrier, you could say. And in fact, they are. Yet their load factors are slowly but steadily falling, so are the yields. What is the MOL's answer to that situation?
O'Leary said Ryanair's 2008 fuel bill would rise by about 400 mln eur, and confirmed the airline needs to cut costs by the same amount. He added that significant cost cuts were also needed in many areas, and did not rule out withdrawing Ryanair flights from certain airports.
He said airports which were not able to reduce costs could find themselves losing Ryanair flights, while those who did make significant reductions could well be rewarded with more flights.
"We are working intensively on other cost reductions, including focusing on airport costs and handling costs, staff costs and other operating expenses, as we expand Ryanair while lowering fares but absorbing much higher oil costs," O'Leary said.
No, no, no. I know, they are very good at that, lowering costs, true. But lowering these costs and lowering prices is just one side of the business. It will not do the trick, it won't be enough. My thesis is: you need to revise your policy in a broader sense.
A point-to-point flight system is a mainstay of a present LCC model and it probably should stay so, in most cases. But let's consider not only a dweller of London or Dublin. Let's try so see it from the perspective of someone living in, say, Friedrichshafen, Germany or Trieste, Italy. You want them as customers? So what can you offer them? London, Liverpool or Dublin for someone living in Baden-Württemberg or just London and Birmingham for people from Trieste. Okay. People will visit London once, maybe twice and... that's it. They could be interested in flying with Ryanair to Madrid or Stockholm or to hundreds of other destinations, but they can't. Similarly, Lake Constance could be a fascinating destination not only for Londoners or Dublinians, but for Danish or Portuguese as well. Italians from Trieste might wish to visit Paris and vice versa. So in a longer run the point2point system does not generate as much traffic as it could because of the LACK of DIVERSIFICATION.
What I'm trying to say is that simply bored by flying to just a few destinations, people start searching the alternatives (and alternative carriers), is it strange? To keep these customers, they do not need to chop and change all the present system. It's good. It works. But if Ryanair want to fill their planes better with better PAYING passengers (not the free-flight amateurs only) they really should consider just some means of diversification. Attracting the passengers not only by cheaper and cheaper fares (it's good only to some degree), but also by providing them with more interesting travelling options throughout the network, by making flying with Ryanair simply more attractive.
How to achieve that? Well, it's possible in many ways. By introducing new flight patterns (like the "triangles" mentioned in one of my earlier posts), by "joining the dots" in the network in a more flexible way (they have enough bases to make much more combinations as in the present), by faciliating the group bookings (I think the goup tour organizers prefer anybody else than FR due to the necessity of submitting the complete passenger list at the moment of booking). By being faster in grabbing some opportunities (as one of our members said: why don't you notice Finns wanting to pay for the sunshine during the winter)? By being more friendly to the customers in the vast realm of the customer relations. And finally, by trying some limited
connecting flights.
I do agree, it's impossible to start offering connecting flights all over the network, by doing so the system might be brought down in a matter of days, no doubt about it. However, why don't they try to designate JUST ONE centrally located airport (e.g. HHN) as a hub to concentrate on precisely that: linking selected flights. With some extra capacity if something went wrong. And FR could win thousands of new passengers due to them being lured by new interesting destinations.
Well, it's up to MOL and his planning team. I just disagree that the (too) low fares are the only way to fill the planes, the issue is much more complicated than that. Why not try something else?