Ryanair - 'Laying Off' 600!!
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Well I can't see and Oxford Aviation bashing on this page so I was assuming we were still on topic!
Just FYI, if other people haven't mentioned this already, my understanding of the Ryanair grounded fleet situation (may be different to the redundancies) is that they have grounded 15 every year for a few years now, they are simply grounding those again then not putting onto the line those aeroplanes that they're getting between now and the end of the year...
I like Deo Volente, I will try to use it more!!!
Just FYI, if other people haven't mentioned this already, my understanding of the Ryanair grounded fleet situation (may be different to the redundancies) is that they have grounded 15 every year for a few years now, they are simply grounding those again then not putting onto the line those aeroplanes that they're getting between now and the end of the year...
I like Deo Volente, I will try to use it more!!!
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Sorry - RY grounded only 7 STN aircraft last winter, partly to try to 'discipline' BAA (who was radically increasing STN per pax charges, as permitted by its regulator, the CAA), and partly to reduce winter losses on seasonal 'sun' routes. Since then, fuel has risen by $60-80/bbl (depending on which month you pick), so the rationale NOT to fly a/c in the loss-making winter is even larger.
Secondly, $130/140/bbl fuel is, in my view, much more of a worry for long-haul airlines, simply because they are up there burning the tripled-price Jet A1 for 10-12 hours, not 1-2. LHR/SYD should sell for at least £1500 round-trip to cover the average cost per seat, but was recently on sale at circa £600 - so the base fare needs to DOUBLE in order to cover today's average cost. What will demand for seats do when the price is doubled? Collapse. Even if J travellers are not price-sensitive, the back of the bus will be very weak, and flights will start losing money because the economy cabin will no longer cover its direct average costs.
And what does Joe Public do when SYD/HKG/LAX etc become too expensive? He still takes his family on hols, but will go short-haul, not long-haul, to avoid the high fares. So, in my view, LCCs get some pax trading down into their market, replacing the pax who can't afford it at all.
I'd therefore be more worried about the long-haul business model than the LCCs' model at $130-140/bbl oil combined with recession. Even $100 oil and recession would be a huge problem for long-haul leisure travel. Read the financial press - that's not a wacky theory, it's consensus thinking.
Secondly, $130/140/bbl fuel is, in my view, much more of a worry for long-haul airlines, simply because they are up there burning the tripled-price Jet A1 for 10-12 hours, not 1-2. LHR/SYD should sell for at least £1500 round-trip to cover the average cost per seat, but was recently on sale at circa £600 - so the base fare needs to DOUBLE in order to cover today's average cost. What will demand for seats do when the price is doubled? Collapse. Even if J travellers are not price-sensitive, the back of the bus will be very weak, and flights will start losing money because the economy cabin will no longer cover its direct average costs.
And what does Joe Public do when SYD/HKG/LAX etc become too expensive? He still takes his family on hols, but will go short-haul, not long-haul, to avoid the high fares. So, in my view, LCCs get some pax trading down into their market, replacing the pax who can't afford it at all.
I'd therefore be more worried about the long-haul business model than the LCCs' model at $130-140/bbl oil combined with recession. Even $100 oil and recession would be a huge problem for long-haul leisure travel. Read the financial press - that's not a wacky theory, it's consensus thinking.
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Secondly, $130/140/bbl fuel is, in my view, much more of a worry for long-haul airlines, simply because they are up there burning the tripled-price Jet A1 for 10-12 hours
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True, but FR utilise their aeroplanes for longer than 12 hours per day and we are going up and down like a wh*res drawers burning fuel at inefficient lower levels for a longer period during that 12 hours + than the 747 heading to LAX.
True about the fuel burn. But with an average of 6 sectors per plane per day. that is a potential of 1134 pax generating fairly decent revenue too... versus one 12 hour sector for the whale carrying about 400 pax.
True about the fuel burn. But with an average of 6 sectors per plane per day. that is a potential of 1134 pax generating fairly decent revenue too... versus one 12 hour sector for the whale carrying about 400 pax.
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All fair points. However, if long-haul economy fares have to double to cover the fuel cost, along with recession/credit crunch/inflation/falling household income, many leisure pax will trade down to save money - "not LA this year, family, let's go to the Med". Short-haul in general picks this traffic up, partially compensating for the really cheap RY customer who stops flying because of the fare increase to cover fuel. My point is that long-haul does not have anything to replace the lost traffic, which is why I think it's more vulnerable in the coming downturn. I think there'll be some B744s joining RY's B738s on the ground for the winter.
All fair points. However, if long-haul economy fares have to double to cover the fuel cost, along with recession/credit crunch/inflation/falling household income, many leisure pax will trade down to save money - "not LA this year, family, let's go to the Med".
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peter we states, rather abruptly;
No matter how many pax they have they are not covering the cost of the fuel to fly them. The more they fly, the more they lose.
This statement of fact is presumably made after referring to some facts and figures produced by Ryanair; would you care to share the scource with us mere mortals?
As much as some of you try to stereotype the passengers of Ryanair most of you fail by a wide margin. Your assumption that they are low income chavs who go on drunken shopping trips a few times a year is very wide of the mark.
These are facts, not spurious and inaccurate thoughts plucked from thin air as some of you choose to do. Most of the passengers on any of the flights to central or Southern France, Spain and Italy, for example, are owners of homes in the region. They are well-off, high income and regular travelers and hardly fit your fond image of them, I'm afraid. They are also very happy to be flying to these more remote airfields as they are closer, in many cases, to their homes. You think Ryanair flies to Bezier or Pau just for the fun of it?
They, like most sensible people, know that prices have risen and they are quite happy to pay more for their trip to their second home. Knowing that the fares are rising from a low baseline to a new, more realistic baseline, will not stop them from flying with Ryanair.
Indeed, those with houses in Florida are more likely to reduce the frequency of their trips than those in the South of France!
No matter how many pax they have they are not covering the cost of the fuel to fly them. The more they fly, the more they lose.
This statement of fact is presumably made after referring to some facts and figures produced by Ryanair; would you care to share the scource with us mere mortals?
As much as some of you try to stereotype the passengers of Ryanair most of you fail by a wide margin. Your assumption that they are low income chavs who go on drunken shopping trips a few times a year is very wide of the mark.
These are facts, not spurious and inaccurate thoughts plucked from thin air as some of you choose to do. Most of the passengers on any of the flights to central or Southern France, Spain and Italy, for example, are owners of homes in the region. They are well-off, high income and regular travelers and hardly fit your fond image of them, I'm afraid. They are also very happy to be flying to these more remote airfields as they are closer, in many cases, to their homes. You think Ryanair flies to Bezier or Pau just for the fun of it?
They, like most sensible people, know that prices have risen and they are quite happy to pay more for their trip to their second home. Knowing that the fares are rising from a low baseline to a new, more realistic baseline, will not stop them from flying with Ryanair.
Indeed, those with houses in Florida are more likely to reduce the frequency of their trips than those in the South of France!
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I agree completely with the last post,people still have to fly.
Also,Peter we,have you got figures to support your theories?ie pax loads,average ticket prices,operating cost per seat etc?or is this like your previuos thread...
Ryanair cancelling flights!!!!!!!
so they cancelled one flight,and gave you six days notice...hmmmm
i see they have now cancelled your thread,
next post reads,
Pprune cancelling threads!!!!!!
but seriously peter,you need to put up some figures if you want us to believe!
warrior.
Also,Peter we,have you got figures to support your theories?ie pax loads,average ticket prices,operating cost per seat etc?or is this like your previuos thread...
Ryanair cancelling flights!!!!!!!
so they cancelled one flight,and gave you six days notice...hmmmm
i see they have now cancelled your thread,
next post reads,
Pprune cancelling threads!!!!!!
but seriously peter,you need to put up some figures if you want us to believe!
warrior.
Pax on low cost airlines
Rubik is right about who travels on the low cost carriers. Whilst pax experience of these might be sometines that the chavs have been let loose, the CAA published a report about 18-24 months ago pointing out that the "working class" had not been liberated by low cost carriers, rather the middle class were simply taking 3 or 4 flight based trips whereas in the past they might have taken one. The Labour Govt. did not give too much publicity to the report as they had fondly believed that the low cost carriers were doing a service for their voters.
Thus, the continued growth of Ryaneasy, (is there a good anagram of that?) is dependant on the middle classes being prepared to spend their disposable income on travel.
The CAA also pointed out that Ryaneasy had not grown the market - they had simply nicked the growth that the chartered and legacy folk thought they were going to get.
Thus, the continued growth of Ryaneasy, (is there a good anagram of that?) is dependant on the middle classes being prepared to spend their disposable income on travel.
The CAA also pointed out that Ryaneasy had not grown the market - they had simply nicked the growth that the chartered and legacy folk thought they were going to get.
Studi's point, that we do not know what is going to happen next, is spot on. However despite whatever we might individually wish (obviously the majority of us do not work for Ryanair), a lot of experts do think they will be amongst the survivors.
Look at the US, where the fuel price is hurting even more due to there being no currency gains partially offsetting the increase. The company that is doing best is Southwest. Whilst we all know there are lots of differences, particularly in company culture, fact is that Ryanair has openly based itself on the Southwest model.
Look at the US, where the fuel price is hurting even more due to there being no currency gains partially offsetting the increase. The company that is doing best is Southwest. Whilst we all know there are lots of differences, particularly in company culture, fact is that Ryanair has openly based itself on the Southwest model.
This statement of fact is presumably made after referring to some facts and figures produced by Ryanair; would you care to share the scource with us mere mortals?
As studi points out, the bottom end of the market is more price sensitive, thats a long standing principle. Against that you have the idea of people moving down market to save money.
I agree completely with the last post,people still have to fly.
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Only half the UK population fly in a given year. That has been true for the last 6 years. What has changed is those who fly have been taking more trips each year. That can change back. The Ryanair model is based on getting the planes used all year.
The UK mostly goes to the Euro Zone for that weekend break. The high Euro makes that hurt every time you have a beer. It also changes the balance of profit growth between EZJ (who report in pounds) and Ryanair (who report in Euors).
The CAA data shows the departures in UK were down 1% on the year before. The sector length is rising quickly for EZJ and RYA as they try to get a bigger market. Now we have the housing crash will will kill of the growth of east european builders flying in and out of the UK. My guess is we will see a small year on year drop in flying in the UK for the next few years. Worst affected is going to be Ryanair.
The UK mostly goes to the Euro Zone for that weekend break. The high Euro makes that hurt every time you have a beer. It also changes the balance of profit growth between EZJ (who report in pounds) and Ryanair (who report in Euors).
The CAA data shows the departures in UK were down 1% on the year before. The sector length is rising quickly for EZJ and RYA as they try to get a bigger market. Now we have the housing crash will will kill of the growth of east european builders flying in and out of the UK. My guess is we will see a small year on year drop in flying in the UK for the next few years. Worst affected is going to be Ryanair.
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51 million x 44 euros per pax= 2,2 billion euros aprox. Unless you know the operating costs of FR its, difficult to tell what the profits wil be this year. The fact of the matter is that they did make a profit last year!
The fuel bill has gone up a least 800million (the fuel figures are in the company results for last year) because the oil price has at least doubled. There is no argument about this - MOL has said they won't make a profit a these prices and breaking even will be a good performance.
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With few exceptions, MOL intentionally plays down performance rather than being jubilant. Add that to the fact that we have no idea about whether FR would generate net profit, reach breakeven or make a loss at $130. I suspect he's doing what he often does: playing it down. Time will, of course, tell.
Their record in fact: €480.9m net.
The fact of the matter is that they did make a profit last year!
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Why fly with all that attendant hassle when you can go by train or coach for much less cost. OK - it might look as if it will take a couple of hours more to get to where you want to be but compare how much time it takes 'DOOR TO DOOR'. You might be very surprised!
The trains and buses are less cramped and you can take all the drinks and food and aftershave you want with you - no questions asked.
During my last visits to the UK I used National Coaches extensively. Because I am over 60 years old they gave me discounts too!
Forget the airlines. Compare the prices and travel times of the Railways too. There is always a much cheaper alternative to flying.
Don't be conned by the hype. It is sometimes a great deal more convenient and speedy and less expensive to use the 'old fashioned' means of travel.
PS. And that includes travel to European and Mediterranean destinations too! Perhaps the whole Ryanair - Easyjet - et al experience was but a 'blip' and is about to disappear having been proven to be unworkable?
The trains and buses are less cramped and you can take all the drinks and food and aftershave you want with you - no questions asked.
During my last visits to the UK I used National Coaches extensively. Because I am over 60 years old they gave me discounts too!
Forget the airlines. Compare the prices and travel times of the Railways too. There is always a much cheaper alternative to flying.
Don't be conned by the hype. It is sometimes a great deal more convenient and speedy and less expensive to use the 'old fashioned' means of travel.
PS. And that includes travel to European and Mediterranean destinations too! Perhaps the whole Ryanair - Easyjet - et al experience was but a 'blip' and is about to disappear having been proven to be unworkable?
Last edited by Xeque; 24th Jul 2008 at 14:47. Reason: addition to text (i.e. a PS)