Ryanair - 6

[Sunfish]

This is what Americans call a "Hail Mary" pass in football - a desperate attempt to head off disaster, but that's just my opinion.

[leeds 65]

really pedantic

i hope fr reword there commitments ,ie that proposals would benefit 'all shareholders'.

Nobody else will be interested in fungus with FRs sizeable shareholding

Lets just hope EI dont isolate themselves in this recessionary period.Unfortunately the majority of EI traffic are irish(not a great % of europeans fly them) - if the irish dont fly=disaster

At least there fuel surcharge is gone(finally with oil so low)....... but ticket price jacked up so no real difference.strategy #1 = fail

[OldChinaHand]

Repa, The man thrives and built his empire on bending rules. So they have told the naughty boy that he has been naughty yet again. No sign of them fining him a few million though. Its only a matter of time until he lays his hands on EI.

[Seljuk22]

FR will cancel BRE-BUD (19th Jan) and HHN-BUD (20th Jan) because of the high fares of BUD.

Analysis FR-EI

“RyanAer’s” combination in Dublin would have far less impact than Lufthansa’s dominance of Frankfurt | anna.aero

[eu01]

Originally Posted by CamelhAir

As to FUE, the real reason for this is of course that the routes were loss-making (much like FR as a whole), but better to blame someone else for the problem, backed up by a supine media.

Exactly. Moreover, this backward "expansion" continues. Today once more, "We regret to inform..." And next two routes are being scrapped.

No more flights to Budapest from Bremen and Frankfurt-Hahn.
Dublin, 12 December 2008: Ryanair, Europe's largest low fare airline, confirmed today the termination of its two routes from Germany to Budapest.

The official reason: the airport fees' increase. Last flight from Bremen to BUD will depart on 19th of January, last flight from HHN will take place on January 20th.

Every airline does have the right to close its unprofitable routes, that's obvious. The question is why it has been so difficult for them to associate these failures with some cardinal faults in the marketing and route development policies paired with the overall nonchalant attitude towards their own partners and customers, revenging now. Or... just unable to admit?

[Magplug]

O'Leary has a great deal in common with Branson..... for different reasons.

O'L likes to flex his financial and therefore legal muscles just to show everyone who is in charge on the Emerald Isle. He has no intention of buying Lingus, he just wants everyone to know that he has the cash to do it.

Branson wants to be the peoples hero, the saviour of great British institutions. He has offered to take an interest in the future of several companies like Northern Rock where the consumer stood to lose a packet. None of his approaches ever comes to anything. If it were not for the fact that he urgently needs an equity partner for the survival of VS, I am sure that he would be in talks to save Woolworths.

It's an ego thing, they both enjoy the limelight but for different reasons.

[davidjohnson6]

S09 strategy

Ryanair has cancelled a number of routes recently - publicly giving various reasons.
I'm not asking for the underlying cause of these cancellations - but instead about what MOL plans to do with a bunch of new 738s. While Nov08-Mar09 may see a number of airframes grounded, the summer season should be prime flying time.

Is the plan to park some airframes in the desert (be it Mojave, Morocco, or elsewhere), to get Boeing to delay delivery of new planes, or instead in Jan09 to announce a load of new routes / increased frequencies to begin flying around Apr09 ?

[CamelhAir]

FR are keeping to their end of my contract: that is all I am interested in.

Yeah, I'm alright Jack. Which you're not, as you're not the only pilot in the company who hasn't gotten a unilateral contract change at some point. Or is your famous selective memory serving you well?
As a reminder, how about the DUB pilots in 2004 who all had their contracts ripped up? How about the court cases to gain access to the contracts?
Or the myriad other examples I could cite.............

CamelhAir, where do you get your information from, sure if that were true would ryanair not cancel all there routes.

Probably should, but then the Great Leader would look foolish, the ego would implode and the great Irish public would be bereft of their modern day Mother Teresa.

I must admit it would be far more entertaining to watch from the sidelines to see just how much money Il Duce manages to loose next year, but from the inside it looks frankly frightening.

[tonyryan]

I wonder what the Ryanair shareholders think of this?

The whole exercise must have cost hundreds of thousands - possibly in excess of a million, for an offer that is not valid due to several breaches of takeover panel rules. A very expensive waste of money for what?

Ok then, was there an alternative agenda?

Since making the offer, the EI share price has increased by nearly 50%. That would have also increased the value of the Ryanair shareholding by not far off 100 miilion dollars.

So when MOL publishes his annual results he can show the value of Ryanair as being nearly 100 million greater that he could otherwise.

Why would he be so keen to do this?

Well, my guess is that it covers a very large 100m hole elsewhere in the operation. All very well in the short term, but, as in ENRON, the truth has a habit of catching up someday in a very dramatic way.

My reckoning is that the events of the last few weeks have been the actions of a very desperate man in a desparate situation.

[Golf Charlie Charlie]

I'm sorry, but increasing the value of a business by 100m does not plug a financial hole of 100m (assuming the latter exists). Shareholder value is just a paper or book value, while cash is cash.

[captplaystation]

All FAR too complicated for me, sometimes I'm glad I'm just a simple pilot ( please add Benny from Crossroads - or some Emmerdale farm character -accent for best effect )
As a VERY simple bystander I have to say the RYR business model is far from straightforward. Transport of bods for sixpence halfpenny doesn't make a dime ( yes I know the ones that book late pay legacy carrier prices but that's only a few ) Nobody checks a bag in anymore or buys anything ( except perhaps a calender ) on board so the ancillary revenue ain't there. It strikes me that the main source of income is selling the leasing company that nice 50 million $ aircraft that cost ? 25 ? and the various " helps" ( not subsidies / back handers or whatever No Siree) that have been won from various airports desparate for business, the fees paid by all those folks who want to be part of the sucess story by becoming pilots and cabin crew at their own expense, taxes etc collected but not refunded to those who booked 1 Euro ( ha ha ) tickets but didn't show up, and a hundred and one other little schemes that someone dreamed up.
It's damned clever, it really is, but it isn't air transport per se which could of course mean that it is immune to the rot that is screwing the rest of the industry. . . . or it could all be a horrible scam that requires aircraft in the sky to lend it credibility, but is not self supporting otherwise.
Perhaps the general (perceived ) lack of disposable income now being suffered by the great unwashed that characterise the RYR client-base will flush all this out, but I think there are more tricks in this pony than any of us can imagine.

[tonyryan]

..........

And offering E535 million for a company with over E800m in cash reserves seems like a desparate attempt to get cash.

Seems like the banks are leaning on someone here........................

[racedo]

And offering E535 million for a company with over E800m in cash reserves seems like a desparate attempt to get cash.

Bid was for €750M and as for cash reserves !!!!! Have you actually read the EI Balance sheet as its reserves are nothing like €800M after you take its short term liabilities out.

Negative cash flow in 1st half year and given the massive pay off to employees in 2nd half year its another negative cash flow unless they decide to pay in 2009, either way they paying it.

Now it gets even worse as when rates good you could put money in banks and get a decent return but that ceased to exist a while ago so even that route is gone.

[Sikpupi]

Desperate time ahead.....Pax ancillary revenues is definitely drying up. Bags are now dead on the 15kgs, Others sneaking their life's possessions in a rucksack, Priority Boarding not worth the paper it is printed on etc....the Well is drying up and the passenger is playing MOL at his own game and its starting to hurt.

[eu01]

It's about time to make a few changes. There is no reason to stop selling cheap flights, FR wouldn't be able to get any decent load factors without them. But on top of all that, they eventually have to start selling some flights for real money. How? Well, is the creative thinking really so difficult?

Create two new websites, say ryanairconnect.com and ryanairgroups.com or anything. Reorganize your schedules, designate one centrally-located airport, start selling connecting flights. Give punters a choice: to buy two separate flights for 20 quids each (at one's own risk) or at 100 for a combined two flights, over double the price - but with the carrier's pledge, isn't Ryanair "the on-time airline" after all? FR could actually discover that selling the tickets can be profitable as well, not only due to the ancillary revenue but just because the carrier's connection could for some people be the most suitable one and they'd wish to pay for that.
"Ryanairgroups" or alike to offer more flexible tickets for the group travel. Only recently I assisted a group that wanted to buy cheap tickets to Rome. FR would sell them 2-leg flights for 60 euros return, but without any flexibility and with no guarantee at all. After some tussle, they finally gave up and bought flights with the legacy carrier for 360€. Why? For the same reason the FR load factors are being poor in spite of low prices. And obviously, there are numerous other options as well. Just think!

[CamelhAir]

Captplaystation, it seems to me, that far from denigrating yourself, you should be congratulated on your lucid, insightful and accurate assessment of the situation.

What's noticeable at the moment is the usual fellow travelers and apologists such as Leo and Slim are avoiding the issues like the plague. There's the usual worthless talk of Alexander the Great (whatever thats all about), legions of orders and thousands of jobs, but an utter refusal to deal with the developing facts on the ground, as mention by capt ps and of the developing opinions of the analysts that fr are in deep financial $hit.

Was it all built on froth and spin? Looks more likely by the day.

[ZeBedie]

Maybe the leasing companies have become disinclined to partake in the purchase and lease-back scheme and that major source of revenue has disappeared? After all, it's just another form of borrowing.

Either way, the big question is, what are they going to do with all those new jets?

[leeds 65]

Why FR WILL be fine

Everyday the papers,radio and telly tell us that economic armageddon is here.while everyone is running around doing jazz hands,the fact is that none of this is new.Recessions happen,countries go into freefall and yet,like the cockroach after a nuclear war,STRONG brands survive.Historically brands have kept companies going in the worst of times,and everything points to them keeping on doing so,as long as they stay well managed,respected and protected.When its sunny, a good and well managed brand is worth a lot of money.When the climate turns nasty such a brand is priceless.

Lets compare aer lingus to ryanair very briefly.If you ask a random person in greece or slovakia(for example) what is the national airline of ireland?they wouldnt know,they wouldnt even know the name if they heard it.Much like some random irish or british person wouldnt know (or probably heard of olympic airways in greece).However all these random people would ,without doubt, have heard of ryanair and probably fly them.Strong well known european brand..thats the difference here.Like bloody tescos(there even in the USA) they will be fine,woolworths mightnt be.

You get people on hear talking ****e about FR breaking even for 08.Well that was the conservative estimate when oil was at 130 dollars and FR were hedged!Now oil is 40something and FR are unhedged unlike many other airlines who are hedged north of 90 dollars for the foreseeable.And yes loads are declining but certainly up until the last month (on the flights iv been on) loads are holding up nicely.FR will make a profit in 08.

Many people in recent times also look at family holidays as an essential -( certainly a different attitude to the one in the 80's or 90's,This attitude stemed from the boom) - .There are so many reasons for this - both parents working hard,'making use' of a sweatbox apartment/timeshare bought during the upturn(celtic tiger) and also an attitude of keeping up with the joanses.We also know all the people who spend and give the kids everything on santas list - and then they dont have a telephone in january because they defaulted on the bill.Also recession or no recession a hardcore liverpool fan WILL book an FR flight to liverpool most saturday mornings.FR benefit from all these people - more then anyone else - FACT.

09 will be loss making for every airline in europe - thats a given.Thats when a strong balance sheet prevails,lets just hope the likes of Aer Arann survive to see 2010.

Recessions are typically times of industry consolidation. Call it survival of the fittest brands. During robust times, there's room for almost all comers, but when the pie is shrinking, remaining consumers gravitate to the safer players.You have to grow your product around europe,anyone who focuses on one country or small segment of society will be stung by demand more harshly then those who diversify.

[eu01]

leeds 65

Strong brands survive, you say? The history of economics tells you many strong brands that did not weather through, in many cases just the erroneous faith in their own potency, adamancy and infallibility actually caused them to collapse. The most important point here is the every firm's ability (or inability) to adapt to the changing environment, e.g. to take advantages of competitors' weaknesses and gain their customers.

FR has a strong economical foundation due to the extremely low cost-base, that will help them cope with the present challenges. However, the carrier has also the long history of neglecting some indispensable marketing tools to build the strong brand upon. That results from the incorrect assumption that they always will be able to win more and more customers due to the very low average fare offered. That's, however, a severe miscalculation, the first results are already seen. At present, there are dozens of routes where the planes start with as little as 30 pax on board on some days, it's unsustainable even if it's concerning the first days of December, no way.

Some ten years ago MOL has expressed his philosophy of marketing, claiming that low price of the tickets will be the only thing needed and e.g. "the Germans will crawl bollock-naked over broken glass to get them". Well, it could have been true 10 years ago, but the situation was different then. For the same group of "bollock-naked" passengers is fighting at present many more low-cost carriers, the low-cost network in Europe is much more dense than years ago and the peak for this type of travel (also due to the economical downturn) has been achieved.

In order to grow, one must win even more pax. Not only from other lcc's, but from legacy carriers as well. The problem is just here. In that case, I don't think we can speak of "bollock-naked" passengers anymore. And here the weakness of FR becomes very apparent. After years of neglecting important marketing tools, restricting the PR-issues, abusing people, all the clout being just on low price - it will be pretty hard to achieve.

Being very critical, I still to some extent do sympathize with Ryanair. They did very much to popularize the leisure travel and I'm their supporter in that regard. They are still fairly reliable and on time airline. They have a vast potential. Will, however, MOL & Co. be flexible enough to readjust and change some key elements of the present policy remains to be seen. To date, I do not see a slightest sign of such a move, unfortunately.

[5tarbuck]

Strong brands survive, you say? The history of economics tells you many strong brands that did not weather through, in many cases just the erroneous faith in their own potency, adamancy and infallibility actually caused them to collapse.

Bankruptcy of Lehman Brothers - Wikipedia, the free encyclopedia