Panorama BBC1 Monday 12th Oct - Why Hate Ryanair

[Scumbag O'Riley]

Sort of stuff you find in their annual reports.

http://www.ryanair.com/site/about/in...t_2009_web.pdf

Passengers per employee

FR 9195
BA 736
LH 652
AF 691

Right next to the average pay per employee

Of course this could be altered by the inclusion of their contractor "employees".

[Sober Lark]

Not a like for like comparison because the airlines mentioned operate long haul, Ryanair does not.

Question. If Aer Lingus did not have long haul, how many passengers per employee would they have?

[Scumbag O'Riley]

absolutely. revenue or profit per employee might be more interesting. Easy to work out, cannot be bothered though, doesn't actually interest me at all.

Now, my biggest complaint about FR is why they cannot put those 1.1million free flights on at times people with jobs can use them without taking holiday

[BOAC4ME]

Having seen the reports re Mr O'Leary being 'irked' by the programme I was expecting something much more hard-hitting, as has been commented already it really was a lazy uninspired piece of journalism.
I would have been much more interested in the exploration of Ryanair's impact on the industry as apposed to the pax, which we know already. As the MD of MAG said "We refuse to prostitute ourselves to Ryanair, in order to trash the marketplace", which is of course quite right. They have been doing it for years, and that to me is a more interesting POV to explore, as apposed to "Pax turns up at airport and gets charged excess shocker!!!!".

[Seat 59A]

So I started wondering why there is so much bile in this thread about Ryanair. What is it that evokes such strong feelings, both for and against? I’ve only used them once and, I must say, I found that it delivered exactly what it said on the tin – a very cheap flight to Norway. Ok, the seats were hard, the food expensive and inedible, the check-in rules strict, and the flight times ungodly, but what the hell, myself and my family got there and back for nearly nothing.
Anyway, I watched the Panorama programme, and the uncut interview with Michael O’Leary, and I also spent an hour on the Ryanair website, booking a few dummy fares and checking out the terms and conditions.
I truly don’t see what the controversy is. As far as I can see, the charges are very clearly displayed, easy to understand, and you have the option to stop and go elsewhere at any point up until payment. The fact is that Mr O’Leary has developed a brilliant business model which enables you, as long as you follow the rules, to fly very, very inexpensively. True, it requires a rethink of attitudes, but what is so wrong about taking the cost of meal service out of the ticket and making those who want it pay separately. That has been the norm on the train for years (and British Rail prices were plenty high enough), but I haven’t noticed people complaining. What is wrong about stripping out all the other costs out of the ticket as well? It’s true that Ryanair baggage charges are skyhigh – so don’t carry baggage, or look for a traditional carrier when you have bags to transport. It’s true also that both Ryanair and Easyjet apply loading models which increase the price of tickets the closer the date of travel. That’s actually why I don’t use them more. I can rarely plan ahead, and usually find BMI or BA more , or equally, competitive on price at short notice. There’s also a change fee of between 25 and 100 quid. That’s fine. At 10 quid I can throw away the ticket and buy another one! I am sure that if Mr O’Leary starts to lose business as a result of being relatively unattractive to business travellers, he will find a way to attract me by undercutting his rivals. Right now, I am not his market, which is ok by me. On the other hand, last night I found a fare to Bergerac, booking a month ahead, for 10 quid. No strings, no frills. So, what is the problem?
In fact, the only “unfair” (but definitely not hidden) charges I could find were the exorbitant credit card fee of 5 quid – c’mon, it doesn’t cost that much and realistically there is no other way to pay – and the online check-in fee of 5 quid. The former is money-grabbing (actually it is designed to incentivize you to get a Ryanair credit card, which I neither want nor need) whilst the latter seems to be to be poor marketing. I appreciate that it is waived on some routes, but if you are going to eliminate physical check-in, it does seem a bit unfair to add a charge for something that cannot be done any other way. IMHO, would have been smarter to apply an across the board increase of one or two pounds on fares without telling anyone. Nobody would have noticed and Mr O’Leary would have been even better placed to assume the moral high ground over BA with its nasty, ill-timed and very much “hidden” seat selection charges, changes to long-standing transatlantic baggage rules and other charges. Not to mention things like hidden $2 headset charges on other airlines, etc. etc.
No, I’m sorry, I’ve read all the posts, and checked the facts and I’m afraid my vote goes to O’Leary over Willie Walsh any day. And I am a BA gold card holder, by the way, so it’s not as if I don’t fly much. Incidentally, I probably won’t be a gold card holder next year, because I have spent most of this year eschewing the airmiles in favour of a rigorously competitive approach to ticket pricing and as a result have a much extended travel budget and a very happy CFO. Who’s the mug? Not Mr Michael O’Leary, that’s for sure!!

[racedo]

absolutely. revenue or profit per employee might be more interesting. Easy to work out, cannot be bothered though, doesn't actually interest me at all.

Passengers carried per aircraft is a good one as while the arguement that LH would suffer its also true that LH operates on a 24 hr basis.

[Scumbag O'Riley]

Earnings per share is the only metric that really matters, and on that one FR would appear to win hands down.

[racedo]

Earnings per share is the only metric that really matters, and on that one FR would appear to win hands down.

Thats is fiddleable by buying back your own shares over a number of years which Ryanair has been doing, it means the EPS needs to be constantly readjusted to take account of that.

Success can be defined many ways, almost like a beautiful woman, often difficult to describe to someone else but you know it when you see it in front of you.

[JayPee28bpr]

[EPS] is fiddleable by buying back your own shares

I don't think "fiddleable" is quite how I'd describe it! Share buybacks are a legitimate way of adjusting capital to maintain it at the level required. There's also an element of tax planning involved in this too. This kind of capital/treasury management is hardly unique to Ryanair. Also, if you take it to the very extreme, ie buying back all shares, then there is no business: it has been liquidated. I think you'll find in Ryanair's case that retained profits far exceed share buybacks, so that total capital employed has risen substantially over any period you choose to consider. At a guess, I'd suspect that Ryanair has used share buy backs as quasi-dividends.

I do agree, though, that:

Success can be defined many ways

And I'd go further and say that the pre-eminent metrics change due to wider market circumstances. For instance, until the recent stabilisation in the global economy, virtually all airlines were being judged on their rate of "cash burn" and not much else, ie how fast their piles of cash and available credit were depleting in the face of falling passenger numbers/fares. Ryanair went into the crisis with the highest cash balances of any airline in Europe, and they have continued to add to their cash pile even as all the legacy airlines have been burning through theirs and tapping investors via bond issues etc (eg BA, AF/KLM). The LoCos have won the "cash protection" battle quite convincingly over the last 12 months.

I think the other key metric by which to judge virtually any company is its operating margin, basically how much of turnover ends up as profit rather than leaking away as costs. On this measure Ryanair is the leading airline. It means that they can go into any price war confident that they can out last the opposition. It's how they've built their business over the last 20 years, ie simply by having the lowest cost structure in the industry and setting fares accordingly.

[racedo]

Share buybacks are a legitimate way of adjusting capital to maintain it at the level required.

And a good way of bolstering share price as you remove some of the freely available traded shares which makes those left a little bit more valuable.

[Scumbag O'Riley]

Thats is fiddleable (eps)

It's probably the least fiddleable of the lot. Share buybacks are a sign that the directors of a company are not only in it for themselves, they also have their shareholders' interests in their mind. Not that common in publically quoted companies.

[JayPee28bpr]

racedo,

The share price will only rise if the capital returned is truly surplus to requirements. Remember that when a company buys back shares, its assets (ie that which generates the profits) also fall. If the return on assets/return on equity falls in the same proportion as the shares bought back, then EPS will remain the same, eg if £100 of assets represented by 100 shares generates £10 profit (10%RoA/RoE), then EPS is 10p. If 10 shares are bought back for £10 and RoA remains at 10%, then post-buy back assets will be £90, shares in issue 90, profits £9 (ie 10% of £90), and EPS remains at 10p (£9 profit divided by 90 shares).

[racedo]

jaypee

Unfortunately you ignore things like benefit or not of holding the additional cash i.e. 0 % interest in the bank.

Buying back shares has no impact on profits so your profit will remain the same and your return % is that much better.

[racedo]

It's probably the least fiddleable of the lot. Share buybacks are a sign that the directors of a company are not only in it for themselves, they also have their shareholders' interests in their mind. Not that common in publically quoted companies.

Depends as buying back shares tends to increase share price. If management set with getting share price to a certain price for their options to kick it then then may take that option.

Not suggesting its anything like the case with FR but never rule out anything with anybody and never get shocked.

[PAXboy]

top jock

When you take off you are nailed with Euro Control Fees. I have been told that Ryanair pay more on Euro Control Fees then they do on fuel. Trust me it is not free.

Sure, I can understand that but, I guess, one advantage is that the costs are predictable. For the railways, when a truck bumps into one of their bridges - all traffic is stopped until an inspection is made. If a repair has to be done, then you have to pay human beings at overtime rates and pay for busses etc. Lastly, if there is a break down or incident, it can close the railroad to all traffic for an hour or a week. If you meet 'bad' air, then you can reroute until it has blown over.

I am not suggesting that this is a full comparison but is one of the reasons that rail can be more expensive. Of course, since the railways adopted the airline's yield management, they have been able to make more money.

[Scumbag O'Riley]

I have been told that Ryanair pay more on Euro Control Fees then they do on fuel.

you were told wrong, this again is info you would hope to find in their annual report. From memory the figure is around E300 million a year. Hard to believe so much, but fuel is several times larger, over a billion. Again from memory, navigation fee costs were similar to staffing costs.

[flyingfemme]

Almost right, you have to divide the weight by 50 first though and then square root it.

I know the formula! It's the square rooting bit that gives rise to the inequity of charging; the division makes no difference to the eventual outcome.

It's why a Kingair (at 5.7T) pays around a third as much as MOL's 59T Boeing and an eighth as much as Willie's Boeing. Not just MOL that fiddles the figures.

[M100S2]

How does the supposed ban on Ryanair supplying drinking water to their crew stack up with the basic provisions of The Workplace Health, Safety and Welfare Regulations 1992 Regulation 22?

HSE Frequently Asked Questions - Does my employer have to pr...

"An adequate supply of wholesome drinking water shall be provided for all persons at work in the workplace."

[racedo]

"An adequate supply of wholesome drinking water shall be provided for all persons at work in the workplace."

Believe previous policy was to supply bottled water.

There is a water supply within aircraft.

[Pax Vobiscum]

There is a water supply within aircraft.

Yes, but is it "wholesome"?