Ryanair - 6

[frnikolai]

As a Russian myself, I would welcome FR to start flying there. It will be a fully-booked flight nearly every time. Safe, cheap, reliable.

I think MOL should consider Vnukovo as a hub for Moscow.

Nikolai.

[davidjohnson6]

Nikolai - Russia is not a member of the European Common Aviation Area, EUROCONTROL or the EU, and as such an airline like Ryanair would find it *very* difficult to gain regulatory permission to fly to Russia from anywhere other than Ireland. It is possible that there may also be further bilateral treaties limiting Ireland-Russia traffic. This is why many residents of St Petersburg travel to Tampere in Finland to fly with Ryanair, and also why Lappeenranta airport in Finland near the Russian border has been suggested as an airport for a LCC.

While not a member of the above organisations, Morocco signed a separate deal with the EU liberalising EU-Morocco air traffic in 2006. The Russian Govt has not expressed a desire to do anything similiar.

I imagine also that the Russian Govt in any negotiations will want to ensure that Russian airlines like Aeroflot and Transaero continue to have a strong presence flying to/from the EU and do not suddenly find themselves drastically undercut on too many routes by a non-Russian airline.

Regular scheduled Ryanair flights to Moscow are not about to happen

[frnikolai]

I am sure some agreement was signed around 9 years ago, as how can BA and BMI fly daily, several times?

Norway isn't part of the EU either? Is that a similar deal to Morroco?

I can completely understand that Aeroflot and Transaero simply can't disappear; but competitive routes will make them become safer, cheaper, and more reliable.

Although they are improving, still expensive!

Nikolai.

[airhumberside]

Norway isn't part of the EU either?

Its in the European Economic Area however. Does that make it part of Europe in aviation terms?

[davidjohnson6]

BA and bmi are both UK registered airlines and therefore to fly from the UK to Russia would not experience any major regulatory issues (except for any bilateral agreements limiting the number of carriers or flights on a particular route). For the same reason Ryanair would be able to fly Ireland-Russia, but would have great difficulty getting permission to fly from anywhere else in the EU to Russia.

Further to my post, Norway is a member of EUROCONTROL and the European Common Aviation Area as well as the European Economic Area, which has liberalised EU-Norway air transport.

I would encourage you to have a Google around the topic of aviation regulation in Europe to find out more.

KD Avia used to fly London-Kaliningrad with a connection Kaliningrad-Moscow, but the route has been suspended

[eu01]

The only metropolitan area in Russia potentially accessible for Ryanair could be St. Petersburg (indirectly, via Finnish Lappeenranta). So far the carrier has demonstrated its short-sightedness, simply missing the point. The local airport probably did not give FR any discount or the offer was not good enough for MOL. Bargaining for a few euros they might have omitted an opportunity to enter the Russian market...

Missing the opportunities? Not only there.

[True Blue]

Not many comments posted yet here on these remarks.

News - Breaking News - Ryanair pilots vote for pay freeze in lieu of cuts

I can't help think that maybe FR have plenty to worry about without all the concern about EI.

True Blue

[frnikolai]

I don't think it is that, more they either accept the pay-freeze. Or they get made redundent; and with all the airlines going bust - it wouldn't be long before the position is filled again.

Realistically, RYR are not going to disappear in this lifetime; guarenteed.

Nikolai.

[davidjohnson6]

Realistically, RYR are not going to disappear in this lifetime; guarenteed.

In the 1960s, Pan Am was probably the world's most prestigious airline. They were the de facto US flag carrier, flying to 6 continents including regular circumnavigations of the world and were one of 3 airlines along with BA and Air France to sign options on Concorde

Plenty of people said Pan Am would never disappear. Operations ceased in 1991

Ryanair is not immune and MOL knows it

[frnikolai]

I was a little kid when they were around - don't even remember them

But if you look at Ryanair, largest airline in Europe. And compare it with let say BA - you can see which one is likely to go first.

I think BA, Air France, Lufthansa-KLM, Ryanair, Easyjet - will survive this recesion and credit crunch. The rest will have to merge just to survive.

I would be more worried if I was a Pilot for Flybe than Ryanair.

They are just too big and fly too many people to suddenly run out of cash, after all don't they have €3 billion in reserves?

Nikolai.

[chrism20]

I would be more worried if I was a Pilot for Flybe than Ryanair.

Why?

Flybe operate a very fuel efficient fleet of aircraft and have the ability to adjust supply to suit demand without the need to flood the market with low fares to fill seats. They also have an exceptonal cost base.

A lot of families will be holidaying in the UK this year as it is simply too expensive to go abroad. Bearing in mind Ł100 bought €147 18 months ago whereas today it will buy you €105 at the post office today. Flybe will be able to capitalise on this due to their strong domestic network. Furthermore many of the routes have a good mix of both business and leisure travellers, very few of their routes rely on one segment of the market.

Flybe integrated the loss making bacon into the business and managed to turn it into profit if it can survive that it can survive almost anything. Many people thought that would finish them!

Jim French and Mike Rutter are no fools, they proved this when BA paid them to take bacon away and turned it round.

[Cyrano]

Originally Posted by davidjohnson6

Nikolai - my post was just me making intelligent guesses as to where FR might consider using airframes that are not currently occupied in the timetable along with some sort of rationale. I don't have inside information, so am a little puzzled as to why you think my suggestions are almost certainly going to happen !

If anyone who has worked as a route planner would be kind enough to spare a few minutes to give their thoughts, I'd be genuinely interested to hear from them - see weblink

Ryanair - 6

David, your musings on sensible development avenues for Ryanair are eminently reasonable.

You wonder why they are not embarking on any of these.

For what it's worth, my personal view: strategically, they're just not that smart.

Before any of the usual fanboys start preparing to flame me, let me explain. Ryanair as we all know has been incredibly good at screwing deals out of airports, mostly but not exclusively secondary ones. They have been good at building an organisation which is exclusively and very aggressively focused on delivering the lowest possible costs and/or being perceived as delivering the lowest possible costs (note subtle difference). They have defended themselves extremely aggressively when faced with new head-to-head competition (think Go and easyJet in the Irish market) and have on some occasions picked tactical fights (think Dublin-Cork against Aer Arann). However, I don't have the impression that their strategic thinking has really gone beyond colonising the map of Europe one random base at a time.

Correct me if I'm wrong, but I see them rolling out bases where they get a really good deal from an airport. At least, that's what they trumpet at each new base opening, along with the "investment" (ie the list price of a 737-800 times the number to be based there), the "number of jobs to be created" (based on some ACI research from a few years ago related to network-carrier hub links enabling industry, if I recall correctly) and the "number of passengers to be carried in the next 2 years" (which is rather harder for any airline to deliver reliably in the current market). I don't recall seeing Ryanair new-base press conferences where they say "we studied the French market and it was clear that there was great potential in the South-East, so we went looking for a base there."

It seems to me to be a fundamental part of Ryanair thinking that all the airports in Europe are perpetually in competition, whether for new routes or for a base. If Airport X in France offers a good enough deal, OK, they'll announce a base there, but if at the last minute Airport Y in Italy does better, the base will go there instead. In other words, I haven't seen (but feel free to correct me if I'm wrong) any concerted strategy along the lines of "we want to dominate Central Europe" or "we want to establish six strategic bases in Italy to keep competition out" or whatever, but rather just an extended tactical campaign ("we'll go to whichever airport does the best deal") with no "big picture" view.

I would add that now that 50% of Ryanair's 2-person route development department has left (and BB was the senior person there), there is unlikely to be any improvement in their strategic focus. Unless, of course, they recognise the glaring need to fix this and rapidly go out and hire a network-strategy big hitter - which has to be a challenge, since reporting directly to MO'L in the current business environment can't be too appealing a sell to someone coming from a more "normal" airline, especially since a healthy upside from share options is no longer a realistic part of the package.

Disclaimer: this is just my personal view based on observing FR from outside and from talking to people who deal with them on a regular basis.

Incidentally I note MO'L's recent comments about the withdrawal of services from DUB as reported in the Irish Times:

“We intend to drive down [passenger] traffic at Dublin airport until this Government gets the message,” Mr O’Leary said at a press briefing in Dublin.

This is an interesting approach: he is quite open about using route cuts as a weapon in his dispute over the tax (the other Irish carriers don't like the tax any more, but aren't rushing to join him, I note) but he also appears to be implying that any reduction in passenger numbers will be Ryanair's doing (rather than acknowledging that Ryanair is at least partially at the mercy of the economic situation).

C.

[Skipness One Echo]

Realistically, RYR are not going to disappear in this lifetime; guaranteed.

Don't bet your savings on it mate. The FACT is that one really bad season can kill most airlines.
You keep coming back on this issue that Ryanair is Europe’s biggest airline but they are aiming at getting even bigger! If you had a little more experience you would know that the bigger they are the harder they fall.
Ask anyone in the 1960s if they could see Pan Am going bust and they would not have believed you. The same goes for TWA.
People Express grew massively at first, but they were destroyed as the market changed and they couldn't adapt fast enough.

It's naive to compare BA and Ryanair as you continually do. They are not in the same market. The only thing they have in common is they fly people from A to B except with Ryanair you tend to fly via Z too often. BA are a high yield airline focused on First / Business class with an economy product that allows people like me to see the world.

Ryanair fly a growing fleet of one aircraft type which is growing at a fast pace as the market plummets.

Remember that once Juan Trippe left Pan Am, the busines was doomed. I think Ryanair will either be saved or doomed when MOL goes. Only time will tell which but please *READ* and try and understand what some of the guys on here are telling you. Your world view is pretty simplistic and does not reflect the complexities of the business.

They are bailing out of Dublin, their home base. They can't destroy Aer Lingus on their home turf. They are redistributing these aircraft to new markets, which need time to bed in and build trade and profit. They are giving seats away for nothing on some routes and charging a grotesque amount of fees on others. I can't even check in at the airport any more! Not a good way to attract new business is it?

[racedo]

You wonder why they are not embarking on any of these.

Press Statement of last week made by FR in relation to holding unused slots had a comment regarding expectation of growth coming from Slot controlled airports.

Problem before was bigger airports didn't want FR, now given they only ones opening new routes then as an airport boss do you sit smugly saying to whomever your boss is "Well our passenger numbers are down 10% but we haven't bothered talking to Ryanair as we are above them" or "We lost many routes but the introduction of Ryanair has enabled us to hold passenger numbers and build in growth over the next couple of years albeit at marginal cost".

In #1 overall boss will be thinking of your replacement, in #2 you will keep your job as you lost SLF but you got new business to compensate.

Other posters have posted about CPH and BCN potential opportunities but think there are quite a lot of others thinking about it.

I agree MOL retiring will have a big impact BUT pretty likely they will bring in Airline bod who will move them from the manic expansion to building on customer service and still be cheap. Where then will the legacy carriers compete ?

[Skipness One Echo]

I agree MOL retiring will have a big impact BUT pretty likely they will bring in Airline bod who will move them from the manic expansion to building on customer service and still be cheap. Where then will the legacy carriers compete ?

Well Crikey racedo if that's all that's needed to destroy the legacy aviation carriers then time to write a letter to Dublin HQ and make sure they get right on it!
Let's not waste any more time!
Life is always black and white in Ryanair world....

[h&s]

Cyrano, totally agree with your post - no strategy in our favourite low brain airline, that's obvious

When I think than pilots had to accept a pay freeze because of the low brain management...
And they continue to say they will lower fares in order to gain market shares bla bla bla, but where is the gain of market shares in Dublin when they reduce AGP or CIA??? And how can they cut a route during the summer whereas that was probably the only months during when these routes were making money

racedo, don't be naive - the majority of airports will do everything possible to avoid ryanair - trust me or not, talk with airports and you'll see this is a fact
I definitely can't see them going to BCN - probably another stupid negociation tool to obtain better deal from REU or GRO and that could lead to disaster for regions such as what happened in VLC or FUE - and clearly shows why everybody try to avoid them
CPH why not, but again no chances according to me - and even if they go, good luck to them because that's a competitive market, with quite long sectors so quite hard to be profitable with 10€ all inclusive fares and no subsidies...

At the end, they may still be profitable this year, and as always they would have to thank airports (that agreed cost reductions etc) and staff (that agreed pay freeze etc) and for sure not their (low) brain

By the way who thought Aer lingus will be profitable this year? lads, that's a former ryanair guy at the top = the airline is dead, as for skybus!

[The Real Slim Shady]

True Blue

“Our pilots have recognised the difficulties we face and are making their contribution by negotiating this pay freeze and productivity increase as the preferred alternative to pay cuts.”

There was no negotiation: it was accept this or we will cut your pay by 10%, change the rosters, change the leave pattern etc etc.

There is a thread running on R & N covering this.

[racedo]

I definitely can't see them going to BCN - probably another stupid negociation tool to obtain better deal from REU or GRO and that could lead to disaster for regions such as what happened in VLC or FUE - and clearly shows why everybody try to avoid them

It was BCN owners announcing this on Catalan TV a couple of weeks ago as FR made no comment. It was posted here by some locals in Barcelona.

As for airports avoiding them of course but given the scenario of continual loss of passengers or bringing them in then some will just suck it up and bring them in.

Airport bosses have targets and loss of passenger numbers isn't one that looks good as its not just the boss but local media and tourism interests who vocalise their feelings.

[racedo]

Well Crikey racedo if that's all that's needed to destroy the legacy aviation carriers then time to write a letter to Dublin HQ and make sure they get right on it!
Let's not waste any more time!
Life is always black and white in Ryanair world...

Nope but you need different type and style of bosses to start and grow an airline / business and then at a certain stage you need to hand over to a different type of manager.

As for the legacies well when FR flying to secondary airports they sat smugly saying well we fly to the big airports and are above them while quietly taking on board stuff that FR introduced.

FR flying to the primary airports undo's some of the smugness and then the legacies left with how they can compete.

History is littered with examples of major players thinking they are above the agressive competitor who they thing is not competing ........UK Motorcycle industry is classic example as they laughed at Honda 50 etc until Japanese started introducing bigger bikes.

[davidjohnson6]

It was my understanding that Aena own Girona, Barcelona and Reus airports.
Talking to BCN in order to neogtiate better terms from GRO / REU rather puzzles me.

I can believe that Aena may be concerned at the over-provision of capacity at the new terminal in BCN, but would have thought they would want to keep FR at GRO and REU, in the hope of other carriers (who might pay the higher fees) coming to BCN in the medium term future.

The only rationale I can think of for Aena being happy to see FR move from GRO / REU to BCN, is if Aena are essentially making zero or an extremely low amount of revenue (and thus running at a loss) at GRO / REU, with FR now offering to pay half price fees for being able to fly to BCN. Of course, Aena would want such a deal to last no more than about 24 months (6 months after the recession ends) when they can tell FR to go back to flying from GRO and REU when other airlines agree to pay the full fees for landing at BCN. Naturally, FR will want a long term deal at BCN to gain longer term stability. I suspect also that Aena will be keen not to harm Vueling / clickair and parent Iberia too much.

Would someone (h&s or racedo ?) be kind enough to elaborate FR's potential strategy ?