Ryanair - 6
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off topic but I thought you guys might know.
A Spanish media source,Canarias7,is reporting tonight that Ryanair are about to pull the plug on sevices to Fuerteventura from September next.Here´s the piece roughly translated....
"The Assosiation blames the cabildo for the loss of Ryanair flights.
The Cámera de Comercio (Trade Association) has described as "a horrifying step back" in the promotion of tourism the decision of Ryanair to cancel the aerial links with Fuerteventura from September. Gregorío Pérez blames the President of the Cabildo, Mario Cabrera, for breaking agreements with the businessmen.
Even though Ryanair have not yet officially announced the step the Cámera de Comercio assures that the low cost flight's company is going to cancel links with Fuerteventura from September and it has laid the blame with the President of the Cabildo, for having broken agreements with the businesses over the appearance of hire car companies and hotels on the official Ryanair website.
The Association is talking about the disappearance of Ryanair routes between Fuerteventura and various European cities, among them Girona and Dublin as a result of it being impossible to buy any tickets online from the 28th September.
The president of the busnessman's collective, Gregorío Pérez, warns that "One cannot hold the businesses responsible for the elimination of the routes". The low cost airline companies have contributed to the increase in the number of tourists arriving by something like 175%, according to the associations numbers, and what the halting of the routes means for for Fuerteventura "not only the extinction of a format of tourism which diversifies the spending in all sectors of the economy, but rather the total absence/lack of means to regenerate the stagnation of economic activity."
Gregorío Pérez added that the halting of the routes "darkens" the island's economic outlook, "and with bring with it another turn of the screw as the low cost airline tourists
spend the money on a large variety of services."
People are a bit anxious here at the minute and I was wondering whether anyone had heard something?
"The Assosiation blames the cabildo for the loss of Ryanair flights.
The Cámera de Comercio (Trade Association) has described as "a horrifying step back" in the promotion of tourism the decision of Ryanair to cancel the aerial links with Fuerteventura from September. Gregorío Pérez blames the President of the Cabildo, Mario Cabrera, for breaking agreements with the businessmen.
Even though Ryanair have not yet officially announced the step the Cámera de Comercio assures that the low cost flight's company is going to cancel links with Fuerteventura from September and it has laid the blame with the President of the Cabildo, for having broken agreements with the businesses over the appearance of hire car companies and hotels on the official Ryanair website.
The Association is talking about the disappearance of Ryanair routes between Fuerteventura and various European cities, among them Girona and Dublin as a result of it being impossible to buy any tickets online from the 28th September.
The president of the busnessman's collective, Gregorío Pérez, warns that "One cannot hold the businesses responsible for the elimination of the routes". The low cost airline companies have contributed to the increase in the number of tourists arriving by something like 175%, according to the associations numbers, and what the halting of the routes means for for Fuerteventura "not only the extinction of a format of tourism which diversifies the spending in all sectors of the economy, but rather the total absence/lack of means to regenerate the stagnation of economic activity."
Gregorío Pérez added that the halting of the routes "darkens" the island's economic outlook, "and with bring with it another turn of the screw as the low cost airline tourists
spend the money on a large variety of services."
People are a bit anxious here at the minute and I was wondering whether anyone had heard something?
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Maybe we (including myself) are too critical in our assessment of FR's results. Let's see it in this context (from the news today):
It would mean Ryanair could try to keep its fares as they are. The most important thing, however, would be to achieve better load factors without those "free flights". Change your booking system, be more friendly to people, find new passengers by means of "safe-only" connecting flights... okay, try it just with hand-luggage passengers, but think of it! It could pay!
British Airways profits have fallen by nearly 90 per cent and its boss admits the airline industry is in crisis.
"We are in the worst trading environment the industry has ever faced," said BA chief executive Willie Walsh.
Carriers are suffering far more badly than in the airline recession that followed the 9/11 terrorist attacks of 2001 in which BA bosses admitted they were within weeks of going bust. For April, May and June, the traditionally strong trading quarter for BA, profits plunged to £37 million from £298millionlast year, a fall of 88 per cent.
"The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first-quarter profits," said Mr Walsh.
The figures strongly indicate the airline could plunge into the red over the full year as it needs to make big profits in the summer to offset the traditionally poor winter trading.
BA's fuel bill will be £1 billion up on last year, more than enough to wipe out last year's record profits of £825 million. But rather than join budget-airline Ryanair in a price war to keep passengers flying, BA says it will charge its customers more.
"We are in the worst trading environment the industry has ever faced," said BA chief executive Willie Walsh.
Carriers are suffering far more badly than in the airline recession that followed the 9/11 terrorist attacks of 2001 in which BA bosses admitted they were within weeks of going bust. For April, May and June, the traditionally strong trading quarter for BA, profits plunged to £37 million from £298millionlast year, a fall of 88 per cent.
"The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first-quarter profits," said Mr Walsh.
The figures strongly indicate the airline could plunge into the red over the full year as it needs to make big profits in the summer to offset the traditionally poor winter trading.
BA's fuel bill will be £1 billion up on last year, more than enough to wipe out last year's record profits of £825 million. But rather than join budget-airline Ryanair in a price war to keep passengers flying, BA says it will charge its customers more.
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Ryanair reducing it's capacity in HHN by 15%
Ryanair dünnt Flugplan am Flughafen Hahn aus - business-wissen.de
Ryanair dünnt Flugplan am Flughafen Hahn aus - business-wissen.de
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Booking system: the signs of revival?
After a few gloomy months, some encouraging changes did happen in the functionality of the booking system last night (after a lenghty off-line period). Still being unable to perform parallel price searches for different travel dates, it does, however, react on users' demands swiftly now, even displaying taxes... Is that big faux pas and an embarrassing nightmare finally fixed?
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You can connect if you want simply book 2 seperate flights.
I know it means collecting luggage and re check in, but I have done it and know many others who have. More importantly MOL knows people do it and it saves him the problem of baggage transfer, which he would probably charge for, but doubt it will happen.
I know it means collecting luggage and re check in, but I have done it and know many others who have. More importantly MOL knows people do it and it saves him the problem of baggage transfer, which he would probably charge for, but doubt it will happen.
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I know it means collecting luggage and re check in, but I have done it and know many others who have.
From the MOL's point of view... Well, he knows very well which routes could be connected with virtually no risks. When the demand weakens, maybe he should haggle with himself over his own rules (point-to-point only), if it pays.
By the way, I was probably over-optimistic about the booking system functionality, possible stood up too early. Now one can read again:
An error condition exists which is preventing you from continuing. You may wish to start over and try again.
Additional details about the error:
[10004: OpenDatabaseConnection] An error has occurred. Please try again.
Message: The connection failed for Server = 'FRRZPHEDQ502\REZOLPRD01,52900', Database = 'REZFROL01'
Message: Cannot open database "REZFROL01" requested by the login. The login failed. Login failed for user 'REZ\FRprod_SVC'.
Additional details about the error:
[10004: OpenDatabaseConnection] An error has occurred. Please try again.
Message: The connection failed for Server = 'FRRZPHEDQ502\REZOLPRD01,52900', Database = 'REZFROL01'
Message: Cannot open database "REZFROL01" requested by the login. The login failed. Login failed for user 'REZ\FRprod_SVC'.
Actually, the M$ database is displaying us some 'secret' directories. What next? Passwords and credit cards' data for everybody to make use of?
Last edited by eu01; 2nd Aug 2008 at 11:04.
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This is what I (aerospace) said in... January:
"it shows that the company is currently in a bad shape and quiet "vulnerable" with all their new crap bases (MAD, MRS, BRE, BHD, BOH)"
or in May:
"Poor new bases + lower LF + higher fuel cost not hedged = bad performances. I think their 2008 results will be not as bad as some could expect, but 2009 will be very very difficult"
Few guys replied that I didn't know of what i was talking about, it was non sense etc
Well, if shareholders believed me, they would have saved a lots of money!!
About BOH, I was saying that a double daily service on this route was non sense and I still remember a guy that told me that PIKBOH was an excelent route, where they were doing a lots of money with usual prices at 200 GBP ow! lol
For next week-end, which is one of the busiest of the year, so very expansive, prices from fridays evening to sunday evening (usually most expansive flights), are 9.99 GBP both ways without taxes, 70 GBP return all exclusive
On current situation, I agree with some posts such as Eu01 or StygerTim (i didn't know the PFP segment!) and just would like to add few points:
- all the promos confirm what I said few months ago: contrary to what they said in their AR FY07, their new bases such as BOH (non sense), BRE (disaster), VLC (suspended!), ALC or BHD (loosing millions of €) are terrible
- their decisions related to hedge is unbelievable! When fuel prices hugely increased, they said that they don't think it will go above 100$ and didn't hedge anything, whereas it reached 145$!!! Few weeks ago they said they expect the price to drop, but in the same time hedge 90% of their fuel at 129$ whereas current price is now below! They are always "playing" against the trend (if prices goes up, they don't hedge, if price goes down, they hedge), this is a very risky tactic isn't it?
Hedging is a question of risk management, but Ryanair over the past weeks only increased the risk of loosing money!
- they have zero strategic view: one day they will increase fare by 5%, 5 days later they will reduce it of...5%. One day they create a base in VLC, few months later they suspend all their operations at the same airport etc
- their Aer Lingus strategy is non sense: youou MOL, you are not allowed to merge with Aer Lingus, did you get the info??? That's a fact: the merge is prohibited by the european commision, so why continuing to buy shares??? Now that they reach the maximum of share they could buy, what's next? That's a very curious (stupid) situation: Ryanair and Aer Lingus are very fierce competitor. Every decisions of one could damage the other. So when Ryanair opend a base at BHD, obviously Aer Lingus performance at BEL is worst than expected, and so obviously Ryanair loose money as the share value of AL is diluting. Ryanair investment is a big paradoxal financial burden for Ryanair and a 100% "loose-loose situation"...
- their war with easyJet is non sense: Ryanair since few years invaded the uk and start a price war on many airports where they were in competition with EZY. Last one was EDI, and more and more head to head routes exist. This is silly as the GB is probably the most competitive market in europe currently, and very under pressure witht he economic dowturn. Btw, it appears to me that they even losting many battle against EZY, for example at BSL or STN where they suspended many flights...
- they are loosing plenty of people (in communication, marketing, yield etc). Ryanair experiments a huge turnover and it's not good for its performance. They lost plenty of marketing directors as they obliged them to swith their locations from STN to DUB, lost also the head of communication, of marketing, of scheduled revenue (this is actually the only good news for them) etc I would say that 80% of HQ people are not happy to work for Ryanair. Even more when they see their shares dropping...
I could talked also about their rubbish yield management (cheapest fares available one month before departure), the rubbish website, their rubbish customer service etc etc
Two little reflexions to conclude:
- who will suffer the most in current crisis? nobody knows, but I thing Ryanair will suffer a lot! I don't think lots of busines travellers will switch from majors to Ryanair, because of the obvious reasons that ryanair have very few business routes (a part from their DUB-UK services). At the end, they would lost plenty of leisure travellers and will win very few busines travellers. On the other side, I believe easyJet will be the biggest winner, as THEY serve main airports and yes, they will loose some leisure travellers as well, but it will be a lots compensated by the gain of business travellers on their key markets such as LON, ORY, GVA, MXP, SXF etc
This is by the way confirmed by their latest release: Ryanair saw a drop of LF (leisure) and of yield (no extra business) whereas easyJet experiences flat LF (loose of leisure compensate by busines) and an increase of their yield (more business travellers). Currently, easyJet is winning the war...
If you tell me that Ryanair get stronger during the past crisis such as 09/11, I think environments are completely different. The biggest difference is that majors are now a lot more competitive in terms of prices. Aer lingus or BA now offer very good deals. If in 2001, business man swithched from Aer lingus to Ryanair, I don't think that would be the case this year because aer lingus could be very cheap as well.
- I saw a sentence before such as "they don't have stupid people at Ryanair". I have the opposite opinion, even if it could look a bit arrogant.
Everybody working at Ryanair HQ will tell you that they are managed by ignorant guys. They have been succesful by copying an existing model, by benefiting of ideal conditions (deregulations, explosion of tourism etc), by exploiting economically the weakest players (ie. small airports and employees) and by receiving plenty of subsidies (whereas they present theirselves as the champions of liberalism...). There is nothing genious in that...
In current situation, where they have to use their brains for the first time, they are not capable to do so and goes from errors to errors. They only panicate and push pressure but finally upset airports (FUE, KRK, BSL, french ones etc). Hard to forecast when and how they will recover, if they will...
"it shows that the company is currently in a bad shape and quiet "vulnerable" with all their new crap bases (MAD, MRS, BRE, BHD, BOH)"
or in May:
"Poor new bases + lower LF + higher fuel cost not hedged = bad performances. I think their 2008 results will be not as bad as some could expect, but 2009 will be very very difficult"
Few guys replied that I didn't know of what i was talking about, it was non sense etc
Well, if shareholders believed me, they would have saved a lots of money!!
About BOH, I was saying that a double daily service on this route was non sense and I still remember a guy that told me that PIKBOH was an excelent route, where they were doing a lots of money with usual prices at 200 GBP ow! lol
For next week-end, which is one of the busiest of the year, so very expansive, prices from fridays evening to sunday evening (usually most expansive flights), are 9.99 GBP both ways without taxes, 70 GBP return all exclusive
On current situation, I agree with some posts such as Eu01 or StygerTim (i didn't know the PFP segment!) and just would like to add few points:
- all the promos confirm what I said few months ago: contrary to what they said in their AR FY07, their new bases such as BOH (non sense), BRE (disaster), VLC (suspended!), ALC or BHD (loosing millions of €) are terrible
- their decisions related to hedge is unbelievable! When fuel prices hugely increased, they said that they don't think it will go above 100$ and didn't hedge anything, whereas it reached 145$!!! Few weeks ago they said they expect the price to drop, but in the same time hedge 90% of their fuel at 129$ whereas current price is now below! They are always "playing" against the trend (if prices goes up, they don't hedge, if price goes down, they hedge), this is a very risky tactic isn't it?
Hedging is a question of risk management, but Ryanair over the past weeks only increased the risk of loosing money!
- they have zero strategic view: one day they will increase fare by 5%, 5 days later they will reduce it of...5%. One day they create a base in VLC, few months later they suspend all their operations at the same airport etc
- their Aer Lingus strategy is non sense: youou MOL, you are not allowed to merge with Aer Lingus, did you get the info??? That's a fact: the merge is prohibited by the european commision, so why continuing to buy shares??? Now that they reach the maximum of share they could buy, what's next? That's a very curious (stupid) situation: Ryanair and Aer Lingus are very fierce competitor. Every decisions of one could damage the other. So when Ryanair opend a base at BHD, obviously Aer Lingus performance at BEL is worst than expected, and so obviously Ryanair loose money as the share value of AL is diluting. Ryanair investment is a big paradoxal financial burden for Ryanair and a 100% "loose-loose situation"...
- their war with easyJet is non sense: Ryanair since few years invaded the uk and start a price war on many airports where they were in competition with EZY. Last one was EDI, and more and more head to head routes exist. This is silly as the GB is probably the most competitive market in europe currently, and very under pressure witht he economic dowturn. Btw, it appears to me that they even losting many battle against EZY, for example at BSL or STN where they suspended many flights...
- they are loosing plenty of people (in communication, marketing, yield etc). Ryanair experiments a huge turnover and it's not good for its performance. They lost plenty of marketing directors as they obliged them to swith their locations from STN to DUB, lost also the head of communication, of marketing, of scheduled revenue (this is actually the only good news for them) etc I would say that 80% of HQ people are not happy to work for Ryanair. Even more when they see their shares dropping...
I could talked also about their rubbish yield management (cheapest fares available one month before departure), the rubbish website, their rubbish customer service etc etc
Two little reflexions to conclude:
- who will suffer the most in current crisis? nobody knows, but I thing Ryanair will suffer a lot! I don't think lots of busines travellers will switch from majors to Ryanair, because of the obvious reasons that ryanair have very few business routes (a part from their DUB-UK services). At the end, they would lost plenty of leisure travellers and will win very few busines travellers. On the other side, I believe easyJet will be the biggest winner, as THEY serve main airports and yes, they will loose some leisure travellers as well, but it will be a lots compensated by the gain of business travellers on their key markets such as LON, ORY, GVA, MXP, SXF etc
This is by the way confirmed by their latest release: Ryanair saw a drop of LF (leisure) and of yield (no extra business) whereas easyJet experiences flat LF (loose of leisure compensate by busines) and an increase of their yield (more business travellers). Currently, easyJet is winning the war...
If you tell me that Ryanair get stronger during the past crisis such as 09/11, I think environments are completely different. The biggest difference is that majors are now a lot more competitive in terms of prices. Aer lingus or BA now offer very good deals. If in 2001, business man swithched from Aer lingus to Ryanair, I don't think that would be the case this year because aer lingus could be very cheap as well.
- I saw a sentence before such as "they don't have stupid people at Ryanair". I have the opposite opinion, even if it could look a bit arrogant.
Everybody working at Ryanair HQ will tell you that they are managed by ignorant guys. They have been succesful by copying an existing model, by benefiting of ideal conditions (deregulations, explosion of tourism etc), by exploiting economically the weakest players (ie. small airports and employees) and by receiving plenty of subsidies (whereas they present theirselves as the champions of liberalism...). There is nothing genious in that...
In current situation, where they have to use their brains for the first time, they are not capable to do so and goes from errors to errors. They only panicate and push pressure but finally upset airports (FUE, KRK, BSL, french ones etc). Hard to forecast when and how they will recover, if they will...
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H & S. You say RYR has lost many top level people. You say there are too many people left who are copying an old model. Doesn't sound too good.
10 years ago RYR had a model and only 20a/c. They now have 165 a/c going on 300. Is there anybody in DUB who has any idea of how to run such a large airline? It would be a disaster if they try to use a model suitable for 2 bases and 20 a/c when they have 20 bases and 165 ever increasing a/c. It is said they are now the world's largest airline in terms of pax carried over borders. If that is true it therefore means operating in many different cultures, local regulations, differing pax preferences, crews and a/c spread over wide areas etc. etc. If their model is still based on that of a small flying club, and there is no-one at the top with any experience or idea of how to develop and nurture such a hungry beast, then the future is very uncertain. The world around RYR has changed significantly in the past 6 years. Has their approach to it adjusted sufficiently?
10 years ago RYR had a model and only 20a/c. They now have 165 a/c going on 300. Is there anybody in DUB who has any idea of how to run such a large airline? It would be a disaster if they try to use a model suitable for 2 bases and 20 a/c when they have 20 bases and 165 ever increasing a/c. It is said they are now the world's largest airline in terms of pax carried over borders. If that is true it therefore means operating in many different cultures, local regulations, differing pax preferences, crews and a/c spread over wide areas etc. etc. If their model is still based on that of a small flying club, and there is no-one at the top with any experience or idea of how to develop and nurture such a hungry beast, then the future is very uncertain. The world around RYR has changed significantly in the past 6 years. Has their approach to it adjusted sufficiently?
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@ H&S
One of the few FR-bashing replies I have read with some substance in...
Despite myself being a big FR-fan I will admit you have some ideas..
What you write about hedging is very true, but backtrading is so simple.
Regarding the competetion with Easyjet I think you analyze it quite well.
On the other hand I think that FR can pull it off using their economies of scale..
One of the few FR-bashing replies I have read with some substance in...
Despite myself being a big FR-fan I will admit you have some ideas..
What you write about hedging is very true, but backtrading is so simple.
Regarding the competetion with Easyjet I think you analyze it quite well.
On the other hand I think that FR can pull it off using their economies of scale..
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bashing or trying to improve?
Almost perfect in saving measures, MOL has undoubtedly created the airline that can offer the unbeatably low-prices and by selling cheap flights is stimulating some additional demand. That's why I'm backing up the whole idea of low-cost air travelling. People spend less money for their flight tickets and spend more in the destination (helping local businesses and stimulating their growth). People should travel; it's fun, it's educating, it gives people some tonic, and due to the very existance of low-cost carriers for the same amount of money they can travel more. Regardless of the environmental issues, the air travel as a public transport should be preferred over the long-distance car travel. I would reserve some scanty oil resources in the world for all kind of public transport, including leasure flying, and I'd limit at the same time the too-intensive usage of private cars (if you asked me).
FR-bashing, as you call it, has indeed its good reasons too. One should try to influence the ways of doing the business. Flying cheap should not be associated with a cattle transport as many people still think. Unfortunately, FR does very little to change this picture. FR is not as crappy as the opinion of some critics expresses it. Maybe it's not crappy at all, being at least very efficient and punctual as well. But its CEO's rubbish talking (involving his people too), some unnecessary fights with the competition, local institutions and politicians, also the "bull****" opinions to the press make rather harm, not helping anyway to improve this image. MOL recalls me sometimes a boy having his toy soldiers and playing with them, planning wars. Look at all these routes commenced just to harm the competition. It's also a place where big amounts of money just burn. Do they have to dominate everything everywhere [especially on the Isles]? What for?
MOL is smart as an economical opportunist who was able to struck some good deals with giants like Boeing at the first place and others as well, including some airports, local communities, tourist industry and alikes. He is talented while negotiating with weaker ones or where he can pretend to be a strongman. But no matter how that kind of negotiating attitude can be percieved by others, he was able to make use of it and he did create a prosperious airline. There is an obvious niche for Ryanair and alikes at the market (quite a big one) and people will keep travelling with FR if it countinues to be the cheapest one.
MOL is brilliant in savings and keeping the costs low, that's why Ryanair still needs him. However, he is not equally good in his perception of the carrier's relation to the customers (paying attention to their cultural differencies), the route policy, travelling system, marketing and sales, to mention a few. We, critics, have on this forum alone presented many ways of improvement, how Ryanair could fill the planes without necessarily giving away flights for one pound/euro, or whatever the price is. Ryanair is in the need for a new strategy as a popular airline. As any coherent new vision simply does not exist, it's hard for us to keep quiet. Should we?
FR-bashing, as you call it, has indeed its good reasons too. One should try to influence the ways of doing the business. Flying cheap should not be associated with a cattle transport as many people still think. Unfortunately, FR does very little to change this picture. FR is not as crappy as the opinion of some critics expresses it. Maybe it's not crappy at all, being at least very efficient and punctual as well. But its CEO's rubbish talking (involving his people too), some unnecessary fights with the competition, local institutions and politicians, also the "bull****" opinions to the press make rather harm, not helping anyway to improve this image. MOL recalls me sometimes a boy having his toy soldiers and playing with them, planning wars. Look at all these routes commenced just to harm the competition. It's also a place where big amounts of money just burn. Do they have to dominate everything everywhere [especially on the Isles]? What for?
MOL is smart as an economical opportunist who was able to struck some good deals with giants like Boeing at the first place and others as well, including some airports, local communities, tourist industry and alikes. He is talented while negotiating with weaker ones or where he can pretend to be a strongman. But no matter how that kind of negotiating attitude can be percieved by others, he was able to make use of it and he did create a prosperious airline. There is an obvious niche for Ryanair and alikes at the market (quite a big one) and people will keep travelling with FR if it countinues to be the cheapest one.
MOL is brilliant in savings and keeping the costs low, that's why Ryanair still needs him. However, he is not equally good in his perception of the carrier's relation to the customers (paying attention to their cultural differencies), the route policy, travelling system, marketing and sales, to mention a few. We, critics, have on this forum alone presented many ways of improvement, how Ryanair could fill the planes without necessarily giving away flights for one pound/euro, or whatever the price is. Ryanair is in the need for a new strategy as a popular airline. As any coherent new vision simply does not exist, it's hard for us to keep quiet. Should we?
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In truth it's often cheaper for London traffic to use a real airline as Stansted is quite ouuta the way and the amount of add ons plus Stansted Express is pricing Ryanair out of my range. Oddly enough, booked in advance, BA often works out cheaper. No ****!
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Sunday times article
Did anyone else see the articles in the business section of yesterday's Irish Sunday Times on Ryanair. Apparantly Shannon and Frankfurt Hahn are the only lossmaking bases out of the 28 Ryanair bases. The Shannon base has never made a profit. Hahn on the otherhand was profitable initially, but the huge increase in capacity over a relatively short period of time (increasing from 4 aircraft to 12 in the space of 2 years) has made it unprofitable. Apparantly they're threatening to either pull out of Shannon or reduce services unless a new more profitable deal can be negotiated. Michael O'Leary is quoted as saying "I am not known for hanging around losing money". Considering they're reported to only be paying €1 per passenger at the moment its hard to see how it could get any more favourable for Ryanair without the SAA paying them to fly from Shannon and I don't think that would go down well with the EU (The existing deal sparked an EU investigation) or with Aer Lingus. However with Ryanair carrying approximately 70% of Shannon pax they really have the SAA over a barrell.
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Hahn is the lossmaking base... (It) was profitable initially, but the huge increase in capacity over a relatively short period of time has made it unprofitable.
But if true, the explanation might be found in the catchment area. Although the former military base Hahn uses "Frankfurt" in its name, it is actually located very far from the town. Obviously, some passengers come from Frankfurt and more or less distant places like Cologne, Bonn or Saarbrücken, to mention just a few, but this stream of people has its limitations. Most of the passengers heading to Frankfurt city will continue to use EDDF, Rhein-Main-Airport. The best catchment area for HHN is rather Koblenz, Trier, Luxemburg and the beautiful district of Rhein-Hunsrück, that is not so much. Here, again, looks like the saturation is approaching, too fast apparently.
One might say: if EDDF can serve over fifty million passengers, there is still so much to allure towards HHN, a low-cost counterpart nearby. Not necessarily, though. EDDF has developed so well not because it's so adjacent to Frankfurt, above all it's a hub where the majority of people changes from one flight to another, not just a base like HHN.
All these things are truisms, aren't they? As these are more than obvious for most of you, why am I wasting your time? Unfortunately the issue so obvious in relation to the legacy airlines still looks so strange in the low-cost context. Why?
Surely, the majority of low-cost routes do not need connecting flights. Between the major destinations there is no need to alter a typical lo-co "point-to-point" model. Indeed, there is not much sense in connecting, say, the STN - MAD route with anyting else. London is big enough to be bound with any medium-size airport in Spain, no need to bother with connecting flights. That's why the airlines preferrig major airports (like EZY) will always be more immune to the fluctuation in demand, a simple frequency reduction will do the trick. But if you prefer smaller airports further away from a core of the business, like Ryanair does, these issues look different. Throughout the winter season FR did have problems with LF on some HHN routes. Like, say, to NYO, TRF or PIK in the North or AHO, MJV, MRS, SDR, even GRO to the South (and more). Some of them were cancelled, some are still fighting for survival. So, in order to expand at most of the typical FR bases the strategy should change. I dare to say, if these dots in the network were bound and thus sold to more customers, some of the routes might have survived...
HHN has an ideal location in the centre of Europe, just as FRA has. Hence, maybe just this airport should be selected as the low-cost transfer point between the less-frequent, smaller destinations, serving diversified purposes and in that regard differing from every other base in the Ryanair's network? If the progress has to be made, it looks like the most natural solution, even if it was in conflict with the most strict interpretation of the low cost travel theory...
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Shannon Airport & Ryanair
I read with interest this weekend that Michael O'Leary admitted that Shannon and Hahn are losing money and he says Shannon has not made any profits as a base in the last 3 years. He said that Ryanair relies on luggage charges and onboard food sales to make any money from the base. He has siad that the base costs need to be addressed so if the cost per passenger is €1 hiow much lower can he expect to go?
And moreover where does this leave Shannon Airport Authority? They are effectively almost 100% reliant on Ryanair as a 'partner'.........
What will become of this?
And moreover where does this leave Shannon Airport Authority? They are effectively almost 100% reliant on Ryanair as a 'partner'.........
What will become of this?
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XL Airways to axe Knock Gatwick route
Less competition for Ryanair ex Knock airport from early September when XL Airways axe their Gatwick Knock route. Sad news really as it was great seeing it return after both easyjet and Ryanair had closed it previously.