Ryanair - 6

[racedo]

Another lie: according their financial reports, their new bases are all working well (lol), so why did they close VLC if it was working well???

Because Airport made a contract and failed to keep to it.

[chrism20]

Free flights

If out of 50 million reported pax, there were only 10,000 no-show zero-fare bookings, most shareholders would consider this largely irrelevant. If on the other hand, the distortion is over 1 million no-show zero-fare bookings, the distortion in figures reported becomes more significant.

Since the free flights offer went online a few days ago I know of several people who have booked over 100 flights and will probably only fly around 20% of them. I would imagine that they are not the only people at this therefore the figure has the potential to be high - especially as they claim to be releasing '1 million' of them at times

[ryanair1]

to answer the q asked earlier on BOH:

second aircraft scheduled for 16th Feb 09

third aircraft schedule for 23rd Mar 09

Current 4 wkly routes will increase to daily
Current 3 weekly will increase to 4 weekly
no change other routes
new routes to be confirmed

[virginblue]

h&s - I agree that the free seats business distorts the message given to shareholders in terms of load factor, number of pax and average fare. However, I'm curious as to how big a distortion this actually is.

I seem to remember some calculations how much many Ryanair actually makes from - technically - not refunding taxes and fees to no-shows (in most sales, Ryanair does not assume "taxes and fees"). IIRC, it was estimated that the difference between seats sold and passengers flown is up to 10 per cent and much higher than the industry standard. So we are certainly not looking at peanuts.

One other aspect: The contracts with airports / local authorities seem to stipulate a minimum number of annual pax to earn the subsidy (or a certain part of it). So giving away seats to certain destinations actually earns Ryanair money if those passengers with free tickets push the annual pax figure for a destination over the magic threshold.

[gate 22]

There is a thread about BA changing it's name. Do you not think Ryanair should change its name. Isn't it named after the family that formed it over 20 years ago. Do you not think that an image make-over and name change would be a good idea. Maybe a change at the top as well.

[davidjohnson6]

Rebranding

Corporate rebranding is a high-cost and high-risk exercise.

Ryanair as a brand is recognised all round Europe and a good chunk of the affluent world. If one person is associated with Ryanair, it's MOL, rather than anyone in the Ryan family. Having Ryan in the corporate name probably has a neutral effect.

Potential reasons I can think of to change the name include:

1) The airline has multiple disastrous accidents with much loss of life in a short period of time
2) The airline decides to significantly reposition itself in the market - e.g. becoming much more upmarket

Why else would the company want to spend millions on this and lose the name recognition that all the advertising has bought so far ?

[Skipness One Echo]

There is a thread about BA changing it's name. Do you not think Ryanair should change its name. Isn't it named after the family that formed it over 20 years ago. Do you not think that an image make-over and name change would be a good idea. Maybe a change at the top as well.

What would this achieve aside from taking away a well known brand?
Coca Cola
Pepsi
Heinz
Long lived brands with continued success.
Virgin - well it's not new anymore, lets become "Whore" and see how that goes down in the market. And yeah, change the guy at the top because he's only made us who we are today.

Do some people in here ever think before posting? Ever?
Incidentally BA are not rebranding, despite what the jilted MAN boys may wish.

[eu01]

Today something from Poland. The country seems to be very enthusiastic about low-cost travelling (with Ryanair, presumably - look at the photo below ). Near Lublin they decided to demolish the entire settlement of newly-built private homes to make way for a new airport Lublin-Swidnik. Amazing, isn't it?

(images: gazeta.pl)

[eu01]

From Italy. The mayor and the municipal government of Ciampino has pledged to submit a complaint to the courts concerning the FR incident last Nov. 10 and asked to participate in the investigation. The Municipality has also asked the Ministry of Transport to reduce the commercial flights immediately without waiting for the opening of a new airport.

The source: Il Tempo

[h&s]

No-show pax should impose very little additional cost on Ryanair compared to no booking at all.

In terms of pure cost, I agree. But I dissagree if you also meant that free seats no show does not count them money. True, Ryanair won't pay taxes, so it doesn't cost them charges, but it may costs them a lot of revenue i.e. the cost of selling a free seat whereas they were abble to sell it at x€. By experience (I took ryanair more than 100 times, but not anymore over the last year), I saw plenty of flights that was sold out 1 week before the date of the flight, and at the end, they were plenty of no shows especially of free seats buyers, so the compagny lost many revenues opportunities. This is why I am saying that their revenue management systems are rubbishs. RM is to sell at the right price based on expecting final LF. This is not what is doing Ryanair.

Free seats are non sense economically. Virginblue you're right. Ryanair contract airport deals are clear: xm PAX per year vs. x€ per passenger. So in addition to waste revenue opportunities, free seats also cost them money because in the majority of the cases, I guess (not 100% sure of that) airport taxes they will to pay by PAX to the airport > airport subsidies per PAX

At the end, the only argument in favor of free seats is to show descent load factors to shareholders and third parties, but these load factors are totally artificials.
Historically, flown LFs were 6pp below booked LF. I guess the extra difference due to free seats are of between 1.5 and 2pp which represents around 70.000 of extra no shows per month. But as they don't publish anymore their flown load factor in their financial report....

Free seats is, among others I already talk about (non sense new bases, rubbish revenue management systems and strategy, lower fares from network carriers, aer lingus non sense shares acquisition strategy, huge turnover of their employees, relations with airports, european commission investigations, focusing on the uk whereas easyJet is very well established and the uk market in recession, in response of ryanair attacks, easyJet attack on some Ryanair good routes (such as Milan Rome) etc) why their yield AND load factor are deteriorating in huge proportion, whereas easyJet ones for example are both increasing and in very better shape than ryanair.
easyJet business model looks like a lot more robust and resilient to the crisis than ryanair one, and it looks like their greek main shareholders is the only person not aware of that

@gate22: there is zero chance that ryanair changes its branding. Ryanair is a very well brand, good positioning and above all, they will never spend 1c to consultant for that

@racedo: I rather think that VLC base performances were disspointing so they asked for extra funds, refused by VLC. You could believe ryanair statement, but personnally, knowing very well Ryanair attitud, I prefer to believe VLC airport arguments.

[jettesen]

Dont forget, that when you say lots of flights were sold out 1 week before the flight date, this is not necessarily true. The reason being that certain destinations are capped at 156 pax due to runway length eg Belfast city, inverness etc. Smaller airports are capped due to the size of the 738. So if you look at all their secondary airports they fly to , this can amount to a vast amount of seats lost due to capacity caps

[FR-]

I think you will find INV can take more than 156. And for no shows, i actually had 65 no shows today on one flight.

[flightlevel26]

Revenue Management

H&S I totally disagree about your definition of the Revenue Management role. Therole of RM in any airline is to optimise revenue and LF according to demand and seasonality. It's all about asset utilisation.

Revenue Management doesn't mean "filling" every flight because sometimes this isnt possible. If you look at FR's promotions in detail you will notice that these are for off peak flights only (M-Thurs) and also large percentage of these promotions are run during the traditionally quieter winter season.

I admit that a no show will have a slight adverse affect on FR's LF results however on zero tax/fare promotions they will gain slightly from the debit/credit card fee. The only risk of offering zero fare tickets is incorrectly ofering these on flights that in ryanair's eyes are forecast to fill, where the seat could potentially be sold for a higher, more profitable break even fare.

The most important part is that being the astute company that Ryanair are they have probably factored into availability that 10% zero fare don't show therefore they overbook by 8% for example to mitigate the risk of flying light. A tricky task for any RM department but this is what the legacy carriers do well.

[eu01]

Originally Posted by FR-

for no shows, i actually had 65 no shows today on one flight.

And that's the visible result of the continuous "free flights" policy. As I said before, there's much more to successful marketing than just the price. Regrettably, it became obvious that the impressive development of the airline to a major-size carrier we have seen so far is not sustainable any more. Not in the present form. The growth has been hampered by the lack of vision how to reshape the old model facing the market saturation in order to gain the versatility and attractiveness. That is essential in order to lure more customers during the economic slowdown. The necessity to make some changes of the strategy is becoming more and more apparent.

The only good thing in the present situation is the fuel price low enough not to lose money in spite of all. Hopefully it'll give some time to re-consider the old strategy and create a better product.

[h&s]

I think ABZ and INV are capped at 176 PAX, BHD is limited as well

@flightlevel26: I won't go in a too theoric debate and honestly, I don't understand how you could dissagree with my basic definition of RM, but just when you say that Ryanair sell 10% of free seats and overbook by 8% (so at the end you agree with me that they just artificially increase their LF, everybody doing sale, but only ryanair doing free seats that increase a lot LFs and no shows), you just wrong as it is clearly writen on their website that Ryanair is a non overbooking airline...
Except if you want to tell us that Ryanair again lies to its passengers, shareholders etc... ;-)

If you consider BGYCIA of this week, 3 flights already sold out for monday, 2 for tuesday, 1 for wednesday, 2 for Thursday and 2 for friday (1 week in advance!).
Do you think they achieved the maximum revenue on these flights?
And I am quite sure they sold plenty of free seats on these flights, so yes, I still consider it costs them a lot of revenue opportunities.

[EI-BUD]

I admit that a no show will have a slight adverse affect on FR's LF

Hi there flightlevel 26. This is an interesting comment, There was some debate a year or 2 ago as to the legitimacy of Ryanair's LF. Some argued that Ryanair when Ryanair announced say an LF of 90% this was based on passengers booked . Can you confirm is the load factor as quoted by Ryanair based on boardings or passengers booked on the flight?

EI-BUD

[Cyrano]

Originally Posted by EI-BUD

Can you confirm is the load factor as quoted by Ryanair based on boardings or passengers booked on the flight?

Here's Ryanair's definition (from their May passenger numbers news release):

["Passengers"]...represents the number of earned seats flown by Ryanair. Earned seats include seats that are flown whether or not the passenger turns up because once a flight has departed a no-show customer is not entitled to change flights or seek a refund.

So in other words, if 150 people book seats on a Ryanair flight and then not a single one shows up, Ryanair still counts 150 passengers and an 80% load factor.

[loveJet]

Although that is the correct definition for 'passengers' i think you'll find that the definition for 'load factor' is some-what different, taking into account no-shows, giving an actual on-board (at the time of flight) stat. Although no-show rates are usually between 2 and 8% per flight - counting them in load factor analysis would certainly give a more optimistic view! But an airline's success must also be measured in being able to either reduce the no-show rate or over-come it by over-booking, else lost opportunity in ancillary revenue...

[eu01]

The most frustrating fact is that there are millions of potential passengers to fill these empty seats, completely omitted by Ryanair. Most of them are using legacy or charter airlines or private cars and would love to save a bit, but are afraid of being too self-reliant while planning their trip and travelling - FR do not encourage them, do not care for them, do not bother to help (on a take it or leave it base), do not hail them. Others would be keen to travel and have a positive overall experience - but the point to point system doesn't give them a choice.

Flying to small airports brings about the need to supplement this point-to-point thing. If a family living in Smaland, Sweden or Tampere, Finland wants to go to Paris, will they choose Ryanair with its Dusseldorf Weeze or Frankfurt Hahn, respectively? No, they'll choose SAS, AY or AF to get them until the final destination, they'll spend the yearly travel budget on these tickets and overnights (while they could have travelled several times with low-costs), they will be "lost" for Ryanair. "Free flights" will not help.
.

[Cyrano]

Originally Posted by loveJet

Although that is the correct definition for 'passengers' i think you'll find that the definition for 'load factor' is some-what different, taking into account no-shows, giving an actual on-board (at the time of flight) stat.

I'm not sure about that. If you follow the link I gave above, you'll see that Ryanair first defines "passengers" (i.e. as those booked rather than those actually flown), but then goes on to define "load factor" as "number of passengers as a proportion of the number of seats available for passengers". It would seem to me that this is therefore "earned load factor" rather than "flown load factor".

I also make this assertion based on the well-tested empirical principle that if there are two possible ways of presenting data (even if one involves redefining words), Ryanair will invariably choose the one which makes them look better.

Incidentally, note the Ryanair definition of "load factor" - the denominator is "number of seats available for passengers" rather than "number of seats". That means that if the flight is capped at 156 seats out of 189 (e.g. due to short runway) and 156 tickets are sold, the load factor is reported as 100%. This may be true in a very narrow sense, but not in the general meaning of the term (which would consist of saying "we can't sell more than 80% of the seats due to performance constraints, so the load factor is effectively capped at 80%.") See "empirical principle" above...