Ryanair - 8
Join Date: Nov 1999
Location: Ireland
Posts: 1,621
Likes: 0
Received 0 Likes
on
0 Posts
The journalist's "opening gambit" as you refer to it is to describe Ryanair as "the Irish low cost airline". Which part of that statement do you have a problem with? It's not as though he/she is claiming they have good service or anything...
Join Date: May 2011
Location: Girona
Posts: 230
Likes: 0
Received 0 Likes
on
0 Posts
The i) Irish (ii) low cost (iii) airline
As the registered offices are in the RoI, I can have no quibble with (i)
As the fleet is Boeings, rather than Volvos or Leylands, I can have no quibble with (iii)
So we are left with (ii) by a process of elimination.
Now obviously had the French journalist written "Irish low class airline" nobody could possibly have quibbled.
As the fleet is Boeings, rather than Volvos or Leylands, I can have no quibble with (iii)
So we are left with (ii) by a process of elimination.
Now obviously had the French journalist written "Irish low class airline" nobody could possibly have quibbled.
Join Date: Sep 2002
Location: Manchester
Posts: 1,106
Likes: 0
Received 0 Likes
on
0 Posts
"Low Cost" v "No Frills"
BigFrank -
Whether or not one likes or dislikes the Ryanair product as a customer, it is undeniable that the company is the epitome of a low-cost airline. The low cost base at Ryanair is legendary within the industry. However, always remember that the term "low-cost" in this instance refers to the cost base achieved and reported on the company balance sheet. It is a common misconception amongst the traveling public that the term refers to the tariffs they pay for tickets. Not so. There is no direct link. An airline is categorised as "low cost" from the point of view of the industry and its shareholders. The product the customers experience is best described as "no frills", which is not the same thing at all. A low-cost airline still uses yield management techniques to maximise revenue from fares. Ticket prices will be high whenever the opportunity arises to sell seats at high yields. A low cost base does not imply a desire to forego the pursuit of maximum profits.
I can find no reason at all to quibble with the French journalist in this case. His introductory description of Ryanair is right on the mark.
I hope this clarifies things. Regards. SHED.
Whether or not one likes or dislikes the Ryanair product as a customer, it is undeniable that the company is the epitome of a low-cost airline. The low cost base at Ryanair is legendary within the industry. However, always remember that the term "low-cost" in this instance refers to the cost base achieved and reported on the company balance sheet. It is a common misconception amongst the traveling public that the term refers to the tariffs they pay for tickets. Not so. There is no direct link. An airline is categorised as "low cost" from the point of view of the industry and its shareholders. The product the customers experience is best described as "no frills", which is not the same thing at all. A low-cost airline still uses yield management techniques to maximise revenue from fares. Ticket prices will be high whenever the opportunity arises to sell seats at high yields. A low cost base does not imply a desire to forego the pursuit of maximum profits.
I can find no reason at all to quibble with the French journalist in this case. His introductory description of Ryanair is right on the mark.
I hope this clarifies things. Regards. SHED.
Join Date: May 2011
Location: Girona
Posts: 230
Likes: 0
Received 0 Likes
on
0 Posts
English language vs pseudo-intellectual gobbledygook
Thanks for the patient explanation of what they teach you on MBA courses. (Though I was a shade disappointed that you didn´t encourage me to learn to "think outside the box." But perhaps that comes in lesson 2?)
Now for the real world:
Pax/ passengers/ punters/ fare paying public members do not give a stuff as to the business model. They do not opt for airlines because:
they have lots of hidden charges,
because their CEO likes dressing up in funny costumes or insulting foreign hacks or politicians,
because they only fly one type of aircraft,
because they think that Ireland West is really NYC East
or any other fantasy but rather because they have cheap tickets.
To put it in plain English they think that:
Low cost means what it says on the tin; i. e. cheap tickets.
(I was however probably wrong in my initial intro to the French article. I think I failed to get an adjectival gender agreement right !)
Now for the real world:
Pax/ passengers/ punters/ fare paying public members do not give a stuff as to the business model. They do not opt for airlines because:
they have lots of hidden charges,
because their CEO likes dressing up in funny costumes or insulting foreign hacks or politicians,
because they only fly one type of aircraft,
because they think that Ireland West is really NYC East
or any other fantasy but rather because they have cheap tickets.
To put it in plain English they think that:
Low cost means what it says on the tin; i. e. cheap tickets.
(I was however probably wrong in my initial intro to the French article. I think I failed to get an adjectival gender agreement right !)
Last edited by BigFrank; 1st Nov 2011 at 09:42. Reason: Improve sentence structure
Join Date: Feb 2005
Location: Finland
Posts: 590
Likes: 0
Received 0 Likes
on
0 Posts
...or pseudo-rational hatred?
Err... To be "no frills" without a truly low-cost base (including a financial discipline) means either having to sell tickets at higher than expected fare prices or possibly to face a threat of bankruptcy.
There were several so-called lcc's that went bust or had to change their affiliation. Look at Air Berlin for instance. Not cheap any more, still in debts.
There were several so-called lcc's that went bust or had to change their affiliation. Look at Air Berlin for instance. Not cheap any more, still in debts.
Join Date: Sep 2002
Location: Manchester
Posts: 1,106
Likes: 0
Received 0 Likes
on
0 Posts
The Guru of Pseudo-Intellectual Goobledygook Speaks Out!!!
Hmmm ... quite the hornet's nest here, I see. Well, the Ryanair product is always a controversial topic. A bit like marmite. Some folks love the Ryanair experience, others loathe it. But this is all subjective stuff; open to personal opinions and interpretation. Constructive discussion of the subject is healthy and can be illuminating (to both customer and company).
Speaking for myself, I try to put aside emotions when assessing an airline's ability to meet my travel needs. I simply evaluate the product offered and note whether or not it dovetails with my travel requirements at an acceptable price. A similar process follows for each alternative option, and then a final purchase decision is made. Value for money is important, but one must recognise and accept the limitations of the product selected. Most purchases represent some level of compromise in balancing quality against price paid. And we all have our own personal threshold beyond which we decline the opportunity to purchase. Sometimes, the compromises do not revolve purely around price. For example, I passionately loathe the tortuous Ryanair online booking process which is akin to enduring some online battlecraft game with pounds instead of points at stake. Show me the final price at the outset with a nice box labelled "BUY" next to it, please! But I am prepared to tolerate this infuriating, time-wasting process because the "prize" of a non-stop return flight from, say, Manchester to Bremen at an attractive price is worth putting up with the hassle experienced in making the booking. Alternative journeys would be more time consuming and less convenient. Presented with two otherwise similar products, I would choose the one with the quick and straightforward reservations process.
But the example above relates to the subjective factors which influence our booking choices. We can choose whether to purchase a ticket (or not). We can decide whether to pre-book a luggage allowance, or take the airline's own insurance. We can accept or reject the list of optional (or unavoidable?) add-ons which pop up as the booking process progresses. Ultimately, we can reject the option to purchase at all. Whether you do that because you have located a better deal elsewhere or because you "hate" an airline is entirely up to you as an individual. Whatever your reasoning, it is entirely your own choice whether you boycott a product, cheerlead it, or tolerate it in the absence of a preferable alternative.
However, whilst the decision to like or dislike the Ryanair PRODUCT (or any other) is entirely yours, the definition of the company's business model is not open to interpretation in the same way. The business model simply is what it is, regardless of your emotional response to it. The company cost base is represented by a bunch of numbers which appear in the regular financial statements which must be produced to prescribed accountancy standards. And Ryanair's cost base is very low. Hence, the company IS a low cost airline. Its costs are low, and the company pursues a strategy which keeps them so. Whether you choose to like or dislike the NO FRILLS product which arises from that low cost base is another matter entirely. You are at liberty to love the low cost airline, or to hate the low cost airline ... but you are not at liberty to redefine the company business model based upon the price you pay for an air ticket to Alicante. There is NO LINK between the company's in-house (low) cost base reported to shareholders and the (high) price you pay for a ticket to Spain on the first Saturday of half-term. That is determined by yield management software reacting to supply and demand in the marketplace.
BIG FRANK. All your comments make it crystal clear that you dislike the Ryanair product. Fair enough. That choice is yours alone to make as a consumer. But to state as you do that: "low cost means what it says on the tin; ie. cheap tickets" is simply wrong. You completely misrepresent the reality. Do not confuse ticket price with cost base. The airline's cost base is the same on the quiet day in November as it is on the day when a "must see" event packs out the aircraft with customers willing to pay GBP400 each for a short trip. In both instances, the airline satisfies the true industry definition of being a low cost carrier - because its COSTS remain low. The TARIFF paid for the tickets varies from low to high based solely upon yield management of demand for the available tickets. These tickets will be priced to maximise profits for the company. In periods of high demand, the company knows that whilst some customers will baulk at a high price, sufficient numbers will accept the elevated rates which result in the most profitable outcome for the airline. And in all cases (with Ryanair) the customer is buying a no-frills flight. NOT a low-cost flight ... that term does not apply to fares ... a no-frills flight. From the point of view of a city analyst, Ryanair is justifiably described as a "low-cost airline". From the point of view of a traveler, Ryanair is best described as a "no-frills airline". Familiarise yourself with this distinction, and you will become much more adept at selecting travel products in the future. The terms are not interchangeable, nor are they matters of subjective opinion. If you insist on presuming a link between low costs on a company balance sheet and cheap product pricing, then you are choosing to delude yourself.
By the way, thanks very much for awarding me an MBA. I am deeply flattered. Where do I collect my certificate?!!! I didn't invite you to "think outside the box" because I didn't know you were in one. It sounds quite uncomfortable to me, but hey - each to their own! :-)
PEE. I concur with your point that an airline must have low costs in order to viably offer low fares. But that does not mean that the airline concerned will not price tickets at the highest level the market will bear. A commercial airline will always seek to maximise its profits. We frequently see this when a major Champion's League football match takes place; customers moan about "rip-off" fares, but this is simply the market at work. High demand = high fares. Company costs remain unchanged. We may not like this fact, but it is helpful to recognise and understand the economics behind it.
IAN BROOKS. I generally agree with your postings, but on this occasion I must respectfully disagree. Ryanair is absolutely low-cost. It is the industry poster-child of low-cost. Whether or not one likes MOL's personal style is a different subject entirely. The hidden charges to which you refer are intensely frustrating (I agree), but these are not a reflection upon the company's cost structure. Those hidden charges boost the income side of the balance sheet; company costs appear on the other side of the ledger!
And last but not least, CYRANO. Thankyou for your comments.
Regards to all. SHED.
Speaking for myself, I try to put aside emotions when assessing an airline's ability to meet my travel needs. I simply evaluate the product offered and note whether or not it dovetails with my travel requirements at an acceptable price. A similar process follows for each alternative option, and then a final purchase decision is made. Value for money is important, but one must recognise and accept the limitations of the product selected. Most purchases represent some level of compromise in balancing quality against price paid. And we all have our own personal threshold beyond which we decline the opportunity to purchase. Sometimes, the compromises do not revolve purely around price. For example, I passionately loathe the tortuous Ryanair online booking process which is akin to enduring some online battlecraft game with pounds instead of points at stake. Show me the final price at the outset with a nice box labelled "BUY" next to it, please! But I am prepared to tolerate this infuriating, time-wasting process because the "prize" of a non-stop return flight from, say, Manchester to Bremen at an attractive price is worth putting up with the hassle experienced in making the booking. Alternative journeys would be more time consuming and less convenient. Presented with two otherwise similar products, I would choose the one with the quick and straightforward reservations process.
But the example above relates to the subjective factors which influence our booking choices. We can choose whether to purchase a ticket (or not). We can decide whether to pre-book a luggage allowance, or take the airline's own insurance. We can accept or reject the list of optional (or unavoidable?) add-ons which pop up as the booking process progresses. Ultimately, we can reject the option to purchase at all. Whether you do that because you have located a better deal elsewhere or because you "hate" an airline is entirely up to you as an individual. Whatever your reasoning, it is entirely your own choice whether you boycott a product, cheerlead it, or tolerate it in the absence of a preferable alternative.
However, whilst the decision to like or dislike the Ryanair PRODUCT (or any other) is entirely yours, the definition of the company's business model is not open to interpretation in the same way. The business model simply is what it is, regardless of your emotional response to it. The company cost base is represented by a bunch of numbers which appear in the regular financial statements which must be produced to prescribed accountancy standards. And Ryanair's cost base is very low. Hence, the company IS a low cost airline. Its costs are low, and the company pursues a strategy which keeps them so. Whether you choose to like or dislike the NO FRILLS product which arises from that low cost base is another matter entirely. You are at liberty to love the low cost airline, or to hate the low cost airline ... but you are not at liberty to redefine the company business model based upon the price you pay for an air ticket to Alicante. There is NO LINK between the company's in-house (low) cost base reported to shareholders and the (high) price you pay for a ticket to Spain on the first Saturday of half-term. That is determined by yield management software reacting to supply and demand in the marketplace.
BIG FRANK. All your comments make it crystal clear that you dislike the Ryanair product. Fair enough. That choice is yours alone to make as a consumer. But to state as you do that: "low cost means what it says on the tin; ie. cheap tickets" is simply wrong. You completely misrepresent the reality. Do not confuse ticket price with cost base. The airline's cost base is the same on the quiet day in November as it is on the day when a "must see" event packs out the aircraft with customers willing to pay GBP400 each for a short trip. In both instances, the airline satisfies the true industry definition of being a low cost carrier - because its COSTS remain low. The TARIFF paid for the tickets varies from low to high based solely upon yield management of demand for the available tickets. These tickets will be priced to maximise profits for the company. In periods of high demand, the company knows that whilst some customers will baulk at a high price, sufficient numbers will accept the elevated rates which result in the most profitable outcome for the airline. And in all cases (with Ryanair) the customer is buying a no-frills flight. NOT a low-cost flight ... that term does not apply to fares ... a no-frills flight. From the point of view of a city analyst, Ryanair is justifiably described as a "low-cost airline". From the point of view of a traveler, Ryanair is best described as a "no-frills airline". Familiarise yourself with this distinction, and you will become much more adept at selecting travel products in the future. The terms are not interchangeable, nor are they matters of subjective opinion. If you insist on presuming a link between low costs on a company balance sheet and cheap product pricing, then you are choosing to delude yourself.
By the way, thanks very much for awarding me an MBA. I am deeply flattered. Where do I collect my certificate?!!! I didn't invite you to "think outside the box" because I didn't know you were in one. It sounds quite uncomfortable to me, but hey - each to their own! :-)
PEE. I concur with your point that an airline must have low costs in order to viably offer low fares. But that does not mean that the airline concerned will not price tickets at the highest level the market will bear. A commercial airline will always seek to maximise its profits. We frequently see this when a major Champion's League football match takes place; customers moan about "rip-off" fares, but this is simply the market at work. High demand = high fares. Company costs remain unchanged. We may not like this fact, but it is helpful to recognise and understand the economics behind it.
IAN BROOKS. I generally agree with your postings, but on this occasion I must respectfully disagree. Ryanair is absolutely low-cost. It is the industry poster-child of low-cost. Whether or not one likes MOL's personal style is a different subject entirely. The hidden charges to which you refer are intensely frustrating (I agree), but these are not a reflection upon the company's cost structure. Those hidden charges boost the income side of the balance sheet; company costs appear on the other side of the ledger!
And last but not least, CYRANO. Thankyou for your comments.
Regards to all. SHED.
Last edited by Shed-on-a-Pole; 1st Nov 2011 at 15:20.
Join Date: Jun 2000
Location: last time I looked I was still here.
Posts: 4,507
Likes: 0
Received 0 Likes
on
0 Posts
Regarding the hike-ing of prices to match certain 'must see events', I'm always surprised how full the LoCo's are. Those last % tickets must be at premium rates for a 'no-frills' product. It is often the case that on // routes I can fly with my national carrier cheaper than the LoCo. IT still amazes me that too many of the travelling pax seem to think a LoCo will always be cheaper. The big boys are fighting back. Good capitalism.
Join Date: May 2011
Location: Girona
Posts: 230
Likes: 0
Received 0 Likes
on
0 Posts
Misrepresentation of reality (sic)
"BIG FRANK. .... But to state as you do that: "low cost means what it says on the tin; ie. cheap tickets" is simply wrong. You completely misrepresent the reality."
¿ Now what exactly makes me think I would have to go something [and then a bit more, I reckon] to rival you in that particular department ?
Though next time I want to buy a ticket, I will keep your subtle semantic disitinctions in mind. ¡ And then continue to avoid the no class airline at all costs !
Néanmoins je continue à vous assurer de mes sentiments bien estimés.
¿ Now what exactly makes me think I would have to go something [and then a bit more, I reckon] to rival you in that particular department ?
Though next time I want to buy a ticket, I will keep your subtle semantic disitinctions in mind. ¡ And then continue to avoid the no class airline at all costs !
Néanmoins je continue à vous assurer de mes sentiments bien estimés.
Last edited by BigFrank; 1st Nov 2011 at 17:06. Reason: Add penultimate paragraph.
Join Date: Sep 2002
Location: Manchester
Posts: 1,106
Likes: 0
Received 0 Likes
on
0 Posts
Big Frank -
If you believe that my synopsis misrepresents the reality, then I'm afraid to say that you display zero grasp of real world airline economics (zut alors!). But that is your choice. You are at liberty to embrace false notions if they comfort you, but reality will not bend to your wishes. As for which airline you favour with your business, that is entirely a matter for yourself to decide. I have no vested interest in promoting use of one company over another. Nice French, by the way.
RAT 5 -
You are quite right that the legacy carriers often offer fares which undercut the locos. Part of the reason for this is the very problem which we have been discussing. A large portion of the traveling public *believes* that the term "low-cost (airline)" refers to the fare they will pay. It never crosses their mind to suppose that it refers to another aspect of the business entirely. And of course, the LCC's have no incentive whatsoever to disabuse customers of this myth; it helps drive bookings their way! It is alarming to note how many travellers never think to check fares on the legacy carriers, because, well ... they're not "low-cost" are they? Their tickets must surely be more expensive! Once you understand the realities of the business model, you can position yourself to genuinely take advantage of the best deals from all sectors of the industry.
Best Regards. SHED.
If you believe that my synopsis misrepresents the reality, then I'm afraid to say that you display zero grasp of real world airline economics (zut alors!). But that is your choice. You are at liberty to embrace false notions if they comfort you, but reality will not bend to your wishes. As for which airline you favour with your business, that is entirely a matter for yourself to decide. I have no vested interest in promoting use of one company over another. Nice French, by the way.
RAT 5 -
You are quite right that the legacy carriers often offer fares which undercut the locos. Part of the reason for this is the very problem which we have been discussing. A large portion of the traveling public *believes* that the term "low-cost (airline)" refers to the fare they will pay. It never crosses their mind to suppose that it refers to another aspect of the business entirely. And of course, the LCC's have no incentive whatsoever to disabuse customers of this myth; it helps drive bookings their way! It is alarming to note how many travellers never think to check fares on the legacy carriers, because, well ... they're not "low-cost" are they? Their tickets must surely be more expensive! Once you understand the realities of the business model, you can position yourself to genuinely take advantage of the best deals from all sectors of the industry.
Best Regards. SHED.
Join Date: Aug 2006
Location: Europe
Posts: 970
Likes: 0
Received 0 Likes
on
0 Posts
Nice reading guys, I esteem especially Shed's clear view and analytic approach.
I'd just add a few words. I do value Ryanair's "cost discipline", being so stingy and rapacious at the same time apparently pays off. What the carrier misses here is their lack of appreciation for some "small nuances" that really do not cost very much but might be worthwhile things. Customer-friendliness is one of them, the obvious need for preventing the shabby image of "low cost, low quality airline" is another. Too many blackmails went public, the numerous fights for a few euro fees/ taxes/ support are not a secret any more, this harms. Too much distrust among the business partners was created, repeatedly selfish attitude became obvious, the criticism intensifies. These aren't irreversible things, but some kind of "face lifting" is needed.
I'd just add a few words. I do value Ryanair's "cost discipline", being so stingy and rapacious at the same time apparently pays off. What the carrier misses here is their lack of appreciation for some "small nuances" that really do not cost very much but might be worthwhile things. Customer-friendliness is one of them, the obvious need for preventing the shabby image of "low cost, low quality airline" is another. Too many blackmails went public, the numerous fights for a few euro fees/ taxes/ support are not a secret any more, this harms. Too much distrust among the business partners was created, repeatedly selfish attitude became obvious, the criticism intensifies. These aren't irreversible things, but some kind of "face lifting" is needed.
Join Date: Sep 2005
Location: Europe
Posts: 373
Likes: 0
Received 0 Likes
on
0 Posts
Nice work, Shed but, I think, Joe Public may have one more consideration - performance. Regardless of how much I pay for a flight there is one thing I want (almost) guaranteed. I'm not interested in announcements like "Due to the late arrival of the inbound aircraft....". I want to arrive on time and I want to see the airline staff busting a gut to see that I do. Ryanair does both of those better than any other airline I have ever flown with some of whom don't do either.