Ryanair Cost Cutting - How much longer here?

[1279shp]

Passengers flying on Ryanair will have to make do without reclining seats, seat pockets and even window blinds in future as the Irish budget airline again strives to cut costs and lower fares.

Ryanair, which has made its name by offering "no-frills" flights at knockdown prices, has asked Boeing to ditch such luxuries when supplying its latest fleet of planes.

Ryanair is facing falling yields in the cut-throat budget airline industry and is seeking to shore up its position as one of Europe's largest airlines by market value.

It issued the first profit warning of its 19-year history last month and is also locked in a legal battle with the European Commission over its receipt of regional state aid.

"Ryanair sees these things (reclining seats, window blinds and seat pockets) as non-essential items. It aims to save costs and then in turn pass these savings on to the consumer," a spokeswoman for the airline said.

"All of this will help us achieve our ultimate goal, where we envisage 50 percent of our seats will be for free within five years," she added.

Ryanair hopes to save around two million euros on a one-off basis by using non-reclining seats. It estimates that it has to replace around 40 reclining seats on each of its planes each year due to breakage.

"Getting rid of window blinds will deliver a saving of about US$250,000 (132,268 pounds) on each plane," the spokeswoman said. "Ditching seat pockets will reduce cleaning costs and shorten the time in which planes are turned around."

The airline is also looking at ways to encourage passengers to bring their luggage on board with them, reducing the need for check-ins and baggage handling at airports.

It may consider offering incentives to passengers who travel with hand luggage only.

[lame]

Most of that makes sense, seat recline mechanisms and window blinds are high maintenance (cost) items.

As long as it is only on short flights, and the customers are aware of it. :ok:

[Kaptin M]

Agreed lame. Of course if QANTAS were to do a similar thing, Dixon, Jackson & Co would undoubtedly reward themselves with higher multi-million dollar bonuses.

It is refreshing to see ideas such as these being proposed, rather than the same ol' same ol' "cut the wages and numbers of the workers at the cliff face".

[bitter balance]

Almost a new record Kap - how did you manage to make this a QF bashing exercise? Of course MOL will be engaging in this latest cost cutting measure purely for philosophical reasons, not to make himself more money. Right?

[Kaptin M]

No "QF bashing", bb, merely my observation/impression of a couple of QANTAS' highest paid employees.
After all, this is the D&G forum, so one would expect that as this topic has been introduced here, some relevant discussion as to how this might affect Oz/N.Z. airlines might be expected.

Of course MOL will be engaging in this latest cost cutting measure purely for philosophical reasons, not to make himself more money. Right?
The difference is, O'Leary is the OWNER of Ryanair, whereas Mr Dixon, and Ms Jackson are EMPLOYEES who are already paid extraordinarily well by any standard, but who then receive extra "bonuses" on the backs of other employees who go the extra mile to save their employer (which is QANTAS, not G.D. or M.J.) money.

[John Citizen]

Why not just get rid of windows as well - imagine how much money that could save.

And maybe also toilets ?

[TIMMEEEE]

Recently Ryannair announced a profit downgrade and as a result their share price fell something like 32%.
Thats how fine a line things are on low cost carriers.

With respect to no window shutters then thats just a real pain-in-the-arse thing, especially when you have the sun in your face (even in Europe) and I believe the paying pax deserve better.
Nothing worse.

With the reclining seats, even recline them an inch and you get a thump from the person behind, especially when you hit their legs or whatever else.
On very short sectors thats the price you pay, but I think cost savings can possibly be done in other non-intrusive areas that dont compromise some basic comforts.

[Johhny Utah]

Kaptin M

I think you'll actually find that GD is paid comparatively less than a lot of other CEO's of companies with similar market valuations. There was a survey in BRW or the Fin Review recently which seemed to back this up with the remuneration figures of our leading CEO's.
:rolleyes:
Of course, if Qantas does really well this year, perhaps someone will buy him an Island! Sorry..I meant buy the staff an island...:rolleyes:

[Wirraway]

Mon "Sydney Morning Herald"

Qantas to squeeze in Jetstar in May
By Scott Rochfort
February 23, 2004

After a one-month delay, Qantas is to announce the route structure and ticket prices for its low-cost subsidiary, Jetstar, in Melbourne later this week, as the new airline prepares to take to the skies by late May.

With the ruddy-faced comedian Magda Szubanski as its figurehead, there is no doubt glamour will not be the Jetstar's strong point but, as far as comfort, the only major sacrifice the airline has made in its looming war with Virgin Blue is leg room.

As Qantas prepares to give the former Impulse fleet of 14 Boeing 717s their second repaint in three years, an extra row of 10 seats will be fitted to the 115-seater.

Qantas chief executive Geoff Dixon confirmed yesterday the Melbourne-based airline would focus on eastern Australia and would head west later.

If Jetstar follows the routes flown by QantasLink's 717 fleet, as analysts are predicting, the budget carrier's destinations from Sydney will initially include Newcastle, Launceston, Hobart, the Gold Coast, Cairns, Maroochydore, Mackay, Hamilton Island and Rockhampton.

The budget carrier's destinations from Melbourne could initially include Launceston, Hobart, the Gold Coast and Maroochydore.

Although Jetstar is expected to target the largely economy-fare leisure routes where Qantas struggles to turn a profit, it is still uncertain whether the airline will fly main-city trunk routes during non-peak (ie, non-business traveller) periods.

Despite doing away with free meals, complimentary head-phones, flight lounges, frequent flyer points and free telephone bookings, Jetstar's low-cost plans still pale in comparison to recent moves by Europe's largest budget carrier RyanAir.

The Irish airline set a new benchmark last week by ordering its first fleet of Boeing 737s without reclining seats, window blinds, seat pockets and free baggage check-in.

Like Jetstar, Virgin Blue said it would maintain its practice of offering extra services - such a valet parking and airport lounges - on a user-pays basis.

"We're a low-cost carrier but we're also a service carrier and we intend to stay so," said Virgin's head of public affairs, Amanda Bolger.

Qantas claims the airline's bold plans to undercut Virgin Blue's cost base will be largely helped by improving the productivity of its staff, efficiency of its aircraft, cutting maintenance costs and lowering reservation costs by encouraging passengers to book online.

In a bid to boost Qantas domestic's proportion of online bookings from 30 per cent to 75 per cent on Jetstar, it is expected the low-cost offshoot will charge passengers an additional $10 each way if they book over the phone.

With Jetstar set to cuts costs by eventually simplifying its fleet to 23 177-seat Airbus 320s by mid-2005, Qantas is also hoping to drastically improve the turnaround times for its aircraft.

By way of example, Qantas said it could increase the utilisation of its entire domestic fleet of 80-odd aircraft by the equivalent of one aircraft if it improved the average turnaround time of its fleet by two minutes (from the average 35 minutes).

In comparison, the US low-cost airline South West Airlines can achieve turnaround times of 15 to 17 minutes.

===========================================

[Dale Harris]

Holy ****, an extra row of 10 seats. That's a friggen WIDEBODY 717 if i ever saw one.