Ryanair - 6

[Mercenary Pilot]

Don't feed the troll's

[Skydrol Leak]

Fuel prices didn't came suddenly from space and put the spell on the whole world did they?The fuel is a part of our life and as long as we are in this industry and it will affect us for sure. Who is to blame for the prices to go up? Demand; probably,the oil kartel;most definately.
OPEC directs the prices of oil these days and It doesn't matter either you are a rich country or a bottomfeeder one you still pay the price for it! So Ryanair should've figured out with their mangement team awhile ago how to get adjusted to the market today and I am sure they did. Getting less from their profit instead of stealing from their employees would be ideal wouldn't it?
To cut the long story short; who was the company that won the most profit this year in UK?
a) Shell
b) Esso
c) Ryanair

Must be the first two or...wait...

[stansdead]

Look guys, we are all in the same boat in this industry (at least unless you are Emirates/Etihad) in that you have to pay for the increase in oil prices.

Ryanair (read O'Leary) refused to hedge much fuel in recent years. Despite:

1) A sliding US Dollar that traditionally leads investors to get tucked into alternative investments (such as Oil and Gold)

2) A Gulf War (rising oil surely?)

3) A massively booming China/Brazil/Russia and China. All of whom are entering the first world rapidly and demand the use of Oil to produce things that we all buy (more oil needed = more oil used = higher oil prices)

4) A definite, complete, total and utter move towards a "green" lobby, which was sure as hell gonna raise the oil price.

Now, faced with the above obvious signs, Ryanair refused to hedge their fuel. They thought Oil would get cheaper.

This is a Gambler's mentality and they have been hit. Hard.

This is an airline with a broken business model ( Deutsche Bank's words, not mine).

As O'Leary said, it's a perfect storm ahead. Higher Oil, Consumers with less money to spend and a potential recession.

Paying Pilots/Staff less than they are now will not save an airline.
Onl a total change of business model AND hopefully management will do that.

However, "Ducksy" has his cash and will be off to Mullingar to breed Horses at everyone's cost. No matter what.

[TheSwede]

Fuel price from $68 to over $100.... What are they going to do? Ask for more money and comissions from airports where they fly? Half there paycheckes?

This is something M.O.L must have known about for at least a year. Why do they only chose to act a few days before?

Have the managers traded any of there own stock?

[eu01]

my vision

Originally Posted by dh dragon

I agree, raise the fares. (...) NO TAXES. NO CHARGES (...) It seems crazy.

Let's face it. At the moment, Ryanair is in a kind of deadlock. Michael O'Leary, the great pioneer of low-cost airlines (yes, he deserves this title) who has proved to be a master in driving the costs of flying down, has come to the point where it's virtually impossible to lower his airline's lowest prices any more (unless he actually wanted to pay the passengers for flying). The hard-working staff is pretty efficient and brave, the potential is there, most of the flights arriving on time, very few cancellations, a reliable carrier, you could say. And in fact, they are. Yet their load factors are slowly but steadily falling, so are the yields. What is the MOL's answer to that situation?

O'Leary said Ryanair's 2008 fuel bill would rise by about 400 mln eur, and confirmed the airline needs to cut costs by the same amount. He added that significant cost cuts were also needed in many areas, and did not rule out withdrawing Ryanair flights from certain airports.

He said airports which were not able to reduce costs could find themselves losing Ryanair flights, while those who did make significant reductions could well be rewarded with more flights.

"We are working intensively on other cost reductions, including focusing on airport costs and handling costs, staff costs and other operating expenses, as we expand Ryanair while lowering fares but absorbing much higher oil costs," O'Leary said.

No, no, no. I know, they are very good at that, lowering costs, true. But lowering these costs and lowering prices is just one side of the business. It will not do the trick, it won't be enough. My thesis is: you need to revise your policy in a broader sense.

A point-to-point flight system is a mainstay of a present LCC model and it probably should stay so, in most cases. But let's consider not only a dweller of London or Dublin. Let's try so see it from the perspective of someone living in, say, Friedrichshafen, Germany or Trieste, Italy. You want them as customers? So what can you offer them? London, Liverpool or Dublin for someone living in Baden-Württemberg or just London and Birmingham for people from Trieste. Okay. People will visit London once, maybe twice and... that's it. They could be interested in flying with Ryanair to Madrid or Stockholm or to hundreds of other destinations, but they can't. Similarly, Lake Constance could be a fascinating destination not only for Londoners or Dublinians, but for Danish or Portuguese as well. Italians from Trieste might wish to visit Paris and vice versa. So in a longer run the point2point system does not generate as much traffic as it could because of the LACK of DIVERSIFICATION.

What I'm trying to say is that simply bored by flying to just a few destinations, people start searching the alternatives (and alternative carriers), is it strange? To keep these customers, they do not need to chop and change all the present system. It's good. It works. But if Ryanair want to fill their planes better with better PAYING passengers (not the free-flight amateurs only) they really should consider just some means of diversification. Attracting the passengers not only by cheaper and cheaper fares (it's good only to some degree), but also by providing them with more interesting travelling options throughout the network, by making flying with Ryanair simply more attractive.

How to achieve that? Well, it's possible in many ways. By introducing new flight patterns (like the "triangles" mentioned in one of my earlier posts), by "joining the dots" in the network in a more flexible way (they have enough bases to make much more combinations as in the present), by faciliating the group bookings (I think the goup tour organizers prefer anybody else than FR due to the necessity of submitting the complete passenger list at the moment of booking). By being faster in grabbing some opportunities (as one of our members said: why don't you notice Finns wanting to pay for the sunshine during the winter)? By being more friendly to the customers in the vast realm of the customer relations. And finally, by trying some limited connecting flights.

I do agree, it's impossible to start offering connecting flights all over the network, by doing so the system might be brought down in a matter of days, no doubt about it. However, why don't they try to designate JUST ONE centrally located airport (e.g. HHN) as a hub to concentrate on precisely that: linking selected flights. With some extra capacity if something went wrong. And FR could win thousands of new passengers due to them being lured by new interesting destinations.

Well, it's up to MOL and his planning team. I just disagree that the (too) low fares are the only way to fill the planes, the issue is much more complicated than that. Why not try something else?

[interpreter]

Some planned pay increases !!!!!

If the cost of a barrel of oil to Ryanair will rise from the current $68 per barrel to the market price of $100 on 1st April and can be offset by avoiding pay increases to the senior management what the devil are they being paid now?

Ah well - lets speak to the leprecauns and get them to do the sums. They might just let their airline run on fresh air. That would be green.

[Le Bob]

my vision

I agree entirely with the post. Well thought out and I think very viable.

[speedrestriction]

Who is the target audience for this particular announcement?

Investors? I would have thought "business as usual" wouldn't require an announcement.

Passengers? Not unless they are hoping to get a few column inches (free advertising) from it.

Employees? Why would they bother?


Is this just to break bad news gently to investors, softening them up for something more negative to follow in a few weeks?
sr

[mason]

Ah well - lets speak to the leprecauns and get them to do the sums.

well the leprecauns seem to have done well with there sums so far !
I cant remember such a succesful limey low cost carrier

[kingdee]

errrrr

How much cash in Bank , Billions i do beleive !Keep up the excellent work

[Wizofoz]

How much cash in Bank , Billions i do beleive !

Yes, but businesses who have to use their cash reserves to pay ongoing operating costs are involved in what is known as MAKING A LOSS!

Once the cash runs out....

[allanmack]

Pay Freeze

I hear that 37 of FR's top managers / directors including MOL are to take a pay freeze in order to support the airline through the 'oil price challenge'.

[pee]

pay freeze

That's for the public, isn't it?

[lgw_warrior]

This could be bad news for the pilots anyway,didnt the recently voted in pay deal include a catch,something like if the company makes a loss,the new 'allownace' can be taken away?my mate tells me this is about £450 per month.bet the FR pilots didnt see this coming when they voted yes.

do you think FR management put that catch in the deal knowing what was going to happen a couple of months after the deal went through?bet your bottom dollar they did.

You FR lads really need to stick together this time if this happens.not the usual half assed unity stuff posted on here.either that or start looking for new jobs.

good luck.

[autobrake3]

Ryanair share price has dropped from 12 Euros to under 3 in one year. No wonder they are getting desperate. Finally perhaps, investors are questioning the the business model and ethics of this company.

[Tooloose]

MOL has already taken steps to make up the shortfall in his income. He is freelancing with The Irish Independent where his articles are published under the nom-de-plume "Laura Noonan".

[boyzinblue]

Bremen website confirming Salzburg and Haugesund as new destinations. No news of cutting Beauvais and Bratislava.

[TolTol]

Cant see them making a loss anytime soon, just a reduction in profit...I may be wrong though.

[rubik101]

Could this have something to do with the Share Buy Back announced back in Feb?
On Sky news a few days ago MOL was heard to say that RYR has hedged their fuel through to the middle of 2009.
Just as a matter of little or no interest, all the airlines that have ever tried to compete with LH on the FRA-TXL route have been blown away by the monopoly carrier. Think of German Wings, Aero Lloyd, Berlin Spezilflug, DBA, Templehof Airways and others left in the dust.
German Wings offered a premium service on MD83s but got bad slots, bad parking and long delays from FRA airport.
LH fly an A330 on the hour, every hour to and from Berlin and Frankfurt. When German Wings came along they simply reduced the price to such an extent that neither of them made any money. LH could carry the loss, German Wings couldn't.
Even with RYRs huge cash mountain, they can only keep that route going for a limited time, IMO.

[JadeGoody]

SZG-CRL
SZG-SNN are still in the system! i think they are starting these two routes

Because NYO and GSE are winterroutes, and maybe SNN and CRL are replacing GSE and NYO