Ryanair - 6

[anna_list]

Hello h&s,

You make some interesting points there. If you don't mind, I'd like to add a few of my own comments.

- Do I believe FR bull? No, I don't. Fair point - you're quite right, I should have written something like "Ryanair have already acknowledged... ... but take that with an enormous pinch of salt". I'm a born sceptic and tend not to believe anything without proof. The trouble is, that I don't have any proof for the number of bases that are loss making (and if I did, I wouldn't post it here), so in the absence of this information, I will happily bow to your superior knowledge.

- Bournemouth to Scotland. I was a bit surprised when FR announced double daily BOH-EDI alongside the double daily BOH-PIK. In many cases these days, FR's biggest competitor is themselves and they will have to be increasing careful not to destroy their own markets. In November, the average flown LF on BOH-PIK was a woeful 42%, with BOH-EDI managing 51%. Yes, November is a weak month, but even so, that doesn't look too clever. More widely, it will be interesting to see the impact that the EDI base has on PIK because there is some evidence of an overlap. PIK-MRS has taken a pasting (average flown LF down by over 10 percentage points compared to last year) since EDI-MRS opened.

- It's interesting that you mention VLC-SCQ because the flown loads on that route have been very impressive (average of 81% this year), so if this route wasn't making money then something must have gone very wrong. On the other hand, you're quite right to say that VLC had a lot of very weak routes, particularly in that first winter: BLL, BSL, LPL, MST and as you say, OPO and MLA too.

- Fuerteventura is another interesting case because the loads have been very decent (DUB and LPL averaged about 90% this year). FR decided to make their point about lack of support from the local authorities (see above point about bs), but were they really not making money on these routes with planes to FUE on average 85% full over the entire year? If they weren't making money then, again, something has gone very wrong.

- BRE seems to be looking a lot better recently, admittedly after a lot of tinkering of routes. I agree that it was looking like a complete turkey for quite a long time. By comparison, some of the UK regional bases have been looking very poor this autumn and the new domestic routes from REU got off to a very dodgy start.

- MAD is another strange one. I agree that it looks as though they made a bit of a mess of it. They've now dropped most of the routes that the base opened with (SNN, MMX, BOH, FAO, TRF, EMA, GSE, BLL) and have replaced them with the likes of BGY, STN and this recent assault on the domestic market with multiple dailies to SDR, GRO, PMI, VLC, VLC and SCQ. It'll be interesting to see whether this works.

They've certainly made mistakes, but then we're all very wise with the benefit of hindsight (oil hedging anyone?). To call them 'low brain' seems a little bit harsh, but in any case I'm sure they will continue to make mistakes and will continue to amuse us with their press releases. I think I'm right in saying that the Q3 results are due in early Feb, so I'm looking forward to seeing Mystic MOL's outlook and what the cash pile is looking like.