M O'Ls plans for Whine Air

[G-CPTN]

M O'L has announced that all seats will be GIVEN away for free, with revenue couped from in-flight gambling (such as 'will we make it?' ?).

http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2005-11-02T152625Z_01_MCC255441_RTRUKOC_0_UK-AIRLINES-RYANAIR.xml&archived=False

[Idunno]

If you don't bet anything, does a bouncer come and throw you off?

I heard they're gonna change the livery again.
They'll have the number for Gamblers Anonymous in six foot high print on the fuselage.:yuk:

[fmgc]

He has been threatening to do away with air fares for years but has never done it.

Bring it on!

[African Tech Rep]

Ryanair is fully hedged until the end of next March

Wonder what will happen then – can’t really see gambling cover the costs – but then again I fly to get from A to B and give the money I save from not gambling to women and barmen :ok:

[Hawk]

GCPTN, I dont think that article will open.

[TheOddOne]

Hawk,

Opened for me...

Cheers,
The Odd One

[Halfwayback]

Hawk

Likewise it worked for me

HWB

[Buster the Bear]

Debonair were going to, or actually did introduce this before thier demise, so nothing new in the thinking of MOL.

[Sunfish]

Interesting reading. Ryanair is operating on a "crash through or crash" strategy as I suspected.

O'leary is concentrating on "Ancilliary" revenues for his profits and running the airline on virtually a break even basis, or possibly at a loss to try and force his competitors out of the market.

However there are some problems with this - like running out of cash before competitors give up, and the problem of new entrants.

And of course the insoluble problem of focus at Board and senior management level- ie "are we an airline that runs travel agencies and car hire firms and a gambling operation, or are we a gambling operation that runs an airline?"

Clues from the release:

Besides plans for inflight gaming and gambling, the airline already generates ancillary income from services such as hotel bookings and car leasing.

EARNINGS NEXT WEEK

Ryanair is set to announce earnings on November 7 for the half year to September 30.

He has been talking about expanding inflight entertainment on Ryanair for more than a year, during which time the airline introduced and then withdrew an onboard individual video and entertainment system. But what about us punters that want to read a book and not play his games?

He said the airline now has similar hopes for gaming and gambling, and sees potential revenues of "a multiple of euros per passenger." What if they don't?

Ryanair also announced it would offer 2 million free seats, a move designed to pressure full-service airlines such as British Airways (BAY.L: Quote, Profile, Research) whose fuel surcharges have widened the gap on fares between budget and traditional airlines.

Ryanair is fully hedged until the end of next March and has refused to impose a fuel surcharge, betting that low fares and even free tickets will draw passengers away from rivals.

"The more we can put pressure on high-priced airlines, the more we can convince them there's no point competing with us (on short-haul European routes)," O'Leary said.

There's the real gamble folks. Can the others hang on until Ryanair runs out of cash?

[bentover]

You obviously don't follow what's going on in Ryanair.
They're making money hand over fist and not all from hotels and car hire.
They made 39 million last year from passengers who booked flights but didn't travel.(Ryanair don't refund the charges and "taxes")
A typical "free flight" costs about 55 euro return.
They won't be running out of cash any time soon.
They're the most profitable airline on the planet, and profits are still increasing.

[the grim repa]

http://www.utvlive.com/newsroom/indepth.asp?id=66712&pt=n

ryanair berates irish government for trying to build a rail link from dublin city to dub airport.his argument,not everyone goes through the city to get to the airport.but he would like to build a rail link from limerick to shannon airport.
maybe someone can enlighten us as to that thinking.

[MonarchA330]

So, let me get this straight, apologies if I'm wrong...

He wants to attract more pax by giving away free tickets

He is then expecting these pax to 'cover costs' as it were by gambling on board.

Why on earth would pax who didn't want to pay for a ticket then go and spend money on gambling on board?

M330

[RealFish]

Could be onto a real winner MoL.

In flight Bingo's that's the thing. It will bring the pax in in their droves, all carrying their big blunt (they will have to be blunt to get through security) bingo markers.

CC sell bingo cards before take off and once the AP is on, FO calls out the numbers...'Hello campers, this is your Captain speaking , eyes down, look in....two little ducks 22; Tony Blair's den, number ten; will we get down alive ? Funchal 05....'

CC scurry round the cabin to cross-check the winning lines.

Where do I book ?

[bacardi walla]

Buster the Bear Debonair did not have inflight gambling before they went pear shaped. The operation itself WAS a gamble however and got the better of them in the end :rolleyes:

[Hansol]

Price wars have never been a problem for FR and new entrants will hold no fears, with 2 billion in the bank they have the biggest war chest of anyone.

[DISCOKID]

Ryanair already make a tidy sum from gambling. On every flight they sell their 2 euro scratchcards and its suprising how many people buy them.

To help sales they say that some of the profits go towards helping charities (but don't specify the amount or percentage - it could be 10 euros a year and they woulnd't be lying!).

Even funnier - there is a 1 in 10 chance of winning a prize. (and the prizes are quite impressive - a car, 100 euro flight voucher etc). However right at the end the last prize is........... another scratchcard!!

So in reality you've probably got a 1 in 10 chance of winning another go at the game (where you've then got at 90% chance of not winning anything!!).

They could quite legally only have one flight voucher for the whole game - theres no mention of odds of winning each prize or number of prizes and i certainly have never seen anyone win anything!

[Yak97]

There was the quote from bentover:

"They made 39 million last year from passengers who booked flights but didn't travel.(Ryanair don't refund the charges and "taxes")"

I assume you are considering this "extra profit" over the income for the seats booked? Surely this is only true if Ryanair can sell the seats again? What percentage of passengers, if their plans change, knowing that Ryanair don't refund, bother to ring up and cancel their booking?

Also if they have charged the Gvmt Tax from the UK, which I suppose is based on passenger travelling or pax booking (how does Gvmt know?), and the passenger dosn't travel........?

[egnxema]

By rights, FR collect the 5 ADP on behalf of HM Revenue, and they only hand it over to the Gov when the pax fly, therefore if you do not fly you may ask for the tax back.

Getting FR to give it you back is another matter.

[bentover]

They'll give it back, but there's an administration fee that exceeds the tax.

[Sunfish]

Ah yes, Hansol and the "big bank account" theory. Every heard of liabilities Hansol?

A simple glance at the latest quarterly report shows that shareholders equity actually DECREASED for the quarter.

Furthermore, Ryanair's operating margin on its core business - flying people from A to B is decreasing. Its a bit over 22 million. It was 25 million last comparable quarter, even though revenues are up about 88 million.

As for maintenance costs - they are constant at about 14 million. With 96 aircraft and 14 bases.

This sounds a bit light to me because way back in about 1984, with a fleet of approximately this size of mixed aircraft types, admittedly with a heavy maintenance program going as well and about 1100 staff in maintenance my annual maintenance budget that was accepted was $110 million - thats 1984 Oz dollars.

I will leave the rest to your imagination.

[Buster the Bear]

Limerick to Shannon. I know the road well and the MASSIVE taxi fares. MOL has a point!

Shannon is hoping for inward tourism, but when you arrive at the airport, your options to travel into Limerick or elsewhere are limited via public transport, fact! It will probably cost you as much as your air fare to get into the city depending upon the time you arrive?

Well it certainly was even more expensive for us and we arranged in advance our onward taxi!

[Hansol]

Sunfish I take your point on the core business profitability but you have to look at the business as a whole when considering its viability and there is no way that the FR balance sheet can be considered vunerable.

[egnxema]

According to Bloomber - Ryanair is the world's 3rd largest airline on the basis of value.

1. Singapore Airlines
2. Southwest Air Lines
3. Ryanair Holdings

They have a HUGE ammount in the bank - and their worth - share value - is immense.

[worldwidewolly]

Hello, hello, hello.

Wake up and smell the coffee!!!

I cant believe intelligent people are still falling for this one.

All tickets free is a publicity stunt. Bring it on as the man himself would say. Bring it on........... no, cause it aint gonna happen.

Profit will come from inflight sales, entertainment??
Oh, I see, like the 100,000 that hired his in flight entertainment system.

It's a stunt, like banning charging phones, it never happened.

A publicity stunt.

Repeat after me, 'a publicity stunt'.

And a good one cause it has of you discussing it.

Remember, the papers know it too, but when did a paper ever refuse ink.