The facts on Ryanair revenues and costs are in the public domain. Check out their investor relations material.
http://www.ryanair.com/site/about/in...rter1_2009.pdf
Here you will see that actually the average revenue per passenger is low, but nevertheless and very importantly revenue is significantly higher than their costs per passenger. Ancillary revenue is also very important.
Certainly some flights are given away, but some too are sold at (very) high prices. The undeniable net result is still a very profitable airline. So the free flight debate is moot, what really matters is the total revenue and the total cost. If individual routes don't work they get chopped.
Yes the data in the pdf is several months old, but you will only have to wait until the first week of November to see the Summer figures (to Sep 30)
I for one will bet that the November report will show the airline is still in the black, and that the company will say that things were not quite as bad as expected because of the heroic measures that were taken through the summer.... but that the winter will be very tough... so no time to be complacent (and cancel unpaid leave for example).
And as for the winter, the airline is now several aircraft light of plan because of the Boeing strike, hence improved utilisation (than plan) and hence lower unit costs for the fleet that is in service.. I wonder too what compensation Boeing will pay...(more heroics)
In the end the Ryanair model works, although I'd be the first to agree that I dont understand why on some routes...
The industry needs successful business - RYR consistently demonstrates its credentials in that regard - free flights included.
FF