The Observer quotes MOL saying: "Ryanair must move away from low fares". In the
article we can read among else:
O'Leary indicated that an average fare of €40 (£33) is unsustainable. The airline is facing pressure on costs as it moves into major airports closer to city centres in a quest for more passengers and will also be under pressure to improve levels of service. "We have to move away over the next number of years from being obsessed with having the lowest fares in the market," O'Leary said.He added that Ryanair will have to become a more sophisticated operation as the business reaches maturity: "Growth rates start to slow down significantly and it becomes more about the brand game, telling all the lies that you need to tell to get the fares up."
In a departure from his usual business philosophy, O'Leary said Ryanair would need to trumpet attributes other than cheap fares – such as its young aircraft fleet and "terrific" in-flight service. Comparing Ryanair with retail giants Tesco and Lidl, O'Leary said the Dublin-based carrier would have to move beyond the "cheap and naff" labels that were attached to Tesco before it overtook Sainsbury's in the 1990s. "At the moment we just pile it high and sell it cheap. Lidl started off cheap and cheerful but now it is very sophisticated – it is no longer perceived to be cheap and cheerful."
"It becomes more about the brand game". Oh indeed? I'll quote my own post from 2008:
Ryanair will HAVE TO improve the profitability, e.g. by rising the load factors (what will be difficult in winter) AND by rising prices (even more difficult). Obviously they should have taken care of how people associate Ryanair brand name a little bit earlier...
And of course, the recent "pee-fee-style" propaganda didn't help the brand either.
Let's wait a year or two and we'll hear about the connecting flights (the issue of such necessity in selected hubs I've been rising for years). For all skeptics: it must happen to improve the demand, the aircraft usage (LF's) and yields. If that conception does not fit the FR business model, this model has to change, other options are scarce. Moving away from low fares can be achieved only partially. FR has educated people to associate "Ryanair means flying cheap", hence the fare level can be risen just in a very limited way. One of the solutions: giving pax flying from smallish end-destination more choices. Not only, say, Hahn, CRL and Barcelona for these guys, but also a few more connections via one of these bases.
MOL is smart to reduce the aircraft usage in winter in order to reduce possible losses. Even smarter, he could have tried a few indirect routes. Just to test them in practice.