On the flipside, I can almost guarantee that there will be three or four people who book the same flight as you the night before and pay upwards of £150 plus for the privilege. It is these last minute customers who make Ryanair profitable.
Why do Ryanair do this? To have as high a load factor as possible (load factor is the percentage of seats filled on any given flight). It costs a huge amount of money to put a plane in the air but once its in the sky, the direct cost of carrying extra passengers is negligible. Ryanair make almost 20% of their profits from auxiliary income- baggage, credit card fees, food and drink onboard, the list goes on. The more people on a flight, the more opportunity they have to exploit these revenue streams.
Airline pricing is a hugely complex thing but from what I can gather, most promotional fares are for seats that the airline predicts will go unsold, hence most special offers are for midweek flights or in your case, out of season an a holiday route. As you state in your post, the main expense is APD/airport taxes (Spain was €8 a few years ago). If they break even on your £20 fare, anything that you or anyone in your party buys from Ryanair is pure profit generated from a seat that would have been unoccupied.
It's also worth noting that Ryanair have agreements with the local authorities in some regions where they are actually paid for bringing passengers in as they boost tourist revenues. Not sure if that is the case for Murcia but I'm sure someone else out there might know...
Last edited by Anansis; 11th Nov 2009 at 19:38.
Reason: typo