Ryanair - 6

[ryan2000]

weak load factors on PIK and EMA routes

So that's the real reason for dropping EMA ORK and ORK PIK. Heard that the number of routes in trouble in Shannon is 7 rather than 4 or 5. I see they've announced SNN-TRN, they offered that to ORK but the CAA saw them coming.

They weren't going to give incentives for a once weekly route and anyway there is a wide range of ski flights available from Cork to Plovdiv, Munich, Geneva, Salzburg, Innsbruck and Andorra (Gerona) none of which are operated by Ryanair.

[True Blue]

Well if they had to drop 2 routes out of Cork due poor loads, what about the routes out of Bhd? Load factors there are no better and the flights are being given away. How long until Bhd goes?

True blue

[840]

The load factor figure is misleading as it includes some very poor months at route start-up. The raw passenger numbers this year on ORK-EMA have been

Jan - 2720
Feb - 3705
Mar - 6538
Apr -7417
May - 7811
Jun - 8128
Jul - 8562

The last figure represents a load factor of around 73%. Not brilliant, but not bad for a relatively new route.

Now, we don't know the yields, but then we're led to believe Ryanair's business model isn't dependent on the fair yields anyway.

The impact on EMA-SNN is probably far closer to the truth.

[pee]

Kerry is an example of Ryanair's (perhaps understandable) Irish-centric view of the world. Would they bother flying there if it were not in Ireland?

first half of 2008:
ORK - EMA: Average flown LF: 57%.
EMA - SNN, LF 47%

Such results are certainly far from acceptable. However, regardless of the supposedly Irish-centric view, Ireland is just an indicator of the issues to come in the low-cost market. Namely, its saturation is very near if nothing changes. Of course, there still exist some niche areas to be exploited*, but the classic model of low-cost travelling shows an acute need for changes. I tend to agree with one of my predecessors that a demand stimulating solution could be found in a WISE use of connecting flights. With point to point-only routes still existing as a core business and, alongside, connecting flights to destinations with less populated areas around. I do believe in some sort of convergence approaching in the aviation world. That's because more flexibility and versatility can expand the area of competition between the different groups of airlines. No-frills can compete very well on main routes, but by refusing to provide more comprehensive selection of destinations they cannot challenge legacy airlines, being unable to provide the diversity required. The point to point system is a main obstacle here.

MOL looks as if he were too slow to adapt to the present situation when his airline is much bigger than in early years and there are (too) many other lcc's around. Growing older? Oops, I'm older than him... well, never mind!

_____________________________
* the areas to be exploited? Not much left.
- Russia. Very difficult market, hard to penetrate. St. Petersburg as an exception (close to the EU border)
- Central Europe. Not much left, maybe a few places like Munich in Germany, Central France if a base created
- Ireland/UK: almost saturated
- Iberian peninsula: present fast progress shows the signs of slowing
- Italy. Some opportunities if Alitalia takes a few steps back
- Eastern EU: Hmm. From Poland to Rome? Poles will always be keen to see the Pope . Some links to Spain?
- Northern Europe: Sweden sees much competition, routes from Finland to the South: still unexploited
- South-Eastern Europe. Greece. While too distant from the Islands, suitable to access from the Central European bases
But not so much overall.

[fivejuliet]

Heard that the number of routes in trouble in Shannon is 7 rather than 4 or 5. I see they've announced SNN-TRN, they offered that to ORK but the CAA saw them coming.

Typically this is unfounded and incorrect.

There are three routes which stick out to me as needing attention. I've seen the figures, and I'm just giving my unbiased opinion.

Ryan2000 can you say that every single route operating out of Cork is "perfect"- The loads are excellent, the yields etc, I think not. It would be unusual for this to be the case in any airport, regardless

[eu01]

Originally Posted by AMS flyer

FR launches 16 new routes
...
STN-LDE (!)

Apparently FR will fly from Stansted to both Pau and Lourdes - while the distance between the two airports is only 35 km.
Fortunately, London is probably big enough to make this new route profitable. Otherways... My God! What a nonsense! Lourdes is a typical pilgrimage site for Roman Catholics. There is nothing more in the entire city than sanctuaries, processions, prayers, spirituality, the miracle healings and so on. I've been there once during my travels, the place is certainly worth seeing. But while obviously every member of the Anglican Communion is welcome there too, is it the best selected link and potentially the most profitable out of all possible routes? Flights from Dublin, Milan, any Spanish base would attract thousands of Catholic pilgrims, flying from London will attract mostly tourists. Nothing against it, but for me it's one more illustration of how ill-prepared the route planning at Ryanair is. Please correct me, if I'm wrong.

[ryan2000]

fivejuliet, I'm not suggesting that Cork routes are perfect. Clearly EMA and PIK are not. However it was MOL who told the Oireachtas committee in July that Shannon was the one Ryanair base that was losing money.

Also Ryanair has announced Kerry Grenoble, you read it here first although I didn't get as far as naming the French airport

[Runway 31]

I agree with 840 on the figures. Prestwick - Cork is up to 7603 in August an average of 122 pax. Given that the route is in its first year is not bad especially when you look at Prestwick-Shannon down 17% on last year to 7517. One route appears to impact on the other or could it just be the effects of the credit crunch?.

[befree]

Cost go against FR

in the short term the oil price has dropped well below what FR have hedged it at. This makes it complex as how much flying is profitable as oilis $108.80 on the spot market. FR have hedged in a higher operating cost.

(from July q1 results) We have taken advantage of the recent weakness in oil prices and are now hedged 90% for September at $129 per barrel, 80% for Q3 at $124 per barrel, but are unhedged for Q4.

The weak pound is going to hurt the UK to Europe market in the winter. Ryanair is also making a big loss on its Aer lingus shareholding. Also noticeable that the airlines going under are not the ones in direct compertition with FR but those flying to the US.

Ryanair has lots of cash in the bank so its not about to go under but is is making more mistakes as it is starting to dig a hole. If it keeps pulling out of routes when the start up discounts end it will get offered less discounts. The power is shifting to the airports.

[LGS6753]

Hedging

My understanding is that 'hedging' gives the buyer the right, but not the obligation, to purchase at a given price. Typically it costs 10% of the hedged price up front.
So if FR have hedged at $129/bbl, as long as oil remains below $116.10, they are better off buying it as required.

[Charlie Roy]

My God! What a nonsense! Lourdes is a typical pilgrimage site for Roman Catholics.

Ya but Lourdes airport has a catchment area similar to Shannon airport.
Ok, the airport happens to be near a pilgrimage site, and they have rightly taken avantage of that in the naming the airport, but this Stansted route will appeal to some French in the region wanting to visit London (or chance their arm with a connection to another Stansted route). Ex-pats on both ends of the route will naturally be potential customers as well, and then there are the Brits in and around London who'll want to visit the Lourdes*, the surrounding region, the Pyrenees and the ski resorts. Ya, infact with a 1 x weekly frequency on Saturdays in winter, this is effectively a ski-route in Ryanair's eyes.

*The Lourdes season runs from Easter to end October (roughly), with maybe a bit of activity on Saint Bernedette's day (February) and the start of Lent. But mainly for winter the whole place is a ghost town.

[eu01]

Lourdes

Got me, it was in fact meant to be a bit provocative. Nevertheless I think the entire FR network could be better optimized and some routes better chosen - sometimes I miss the logic of some decisions, that's all.

[EI-BUD]

French Route from Kerry

Ryan2000

I have to hand it to you, you were spot on with your information on the new route linking Kerry with a French city. Well done, you are very reliable!

EI-BUD

[AMS flyer]

And again new routes...

STN-AGA
EMA-BVA

[befree]

Hedging

My understanding is that the ryanair hedge is to have a fixed price for a percentage of the oil needs. In effect they have bought ahead of time. Easyjet often buy caps which limits the price they pay but gives them a saving if the price drops. This cap costs money were as buying at a fixed price is cheap but does not reward the airline if the price falls. Easyjet currently has only 28% of its fuel hedged so may overall be buying fuel 10% cheaper then Ryanair until December.

[Ametyst1]

More new routes

A new daily Liverpool to Paris Beauvais service will also commence from 3rd November

[macuser]

Lourdes

It is not in bad taste that I post this but Lourdes services will not attract the quickest turn-arounds. So, maybe not the Ryanair model.

[Jimogr]

Where do people get the number of passengers and load figure data quoted in this thread?

[Flitefone]

Stats

Google Provisional Airport Statistics. You will find the CAA actuals for every airport and route in the British Isles on a Monthly basis.

Note that they are actuals and not seats sold which is how EZY/RYR report.

You then need to know the number of flights on a route in the month and the seating config, the hey presto you have a load factor.

FF

[pee]

Denmark hostile for low cost carriers

Is there much space for low cost carriers left in Europe? As an addition to the subject, the news just published in Denmark: private investors planning to open in 2010 a new "low-cost haven" terminal A on Kastrup's grounds were refused the necessary permision by the Copenhagen Airport.

Meanwhile, Ryanair has cut a third of its Danish routes in both Billund and Århus.

Thus, any expansion near Copenhagen will be hindered by lack of the suitable terminal, Kastrup is at present one of the dearest airports in Europe.