I fly around Europe for €30-€100 per return flight without a checked bag. Yet Ryanair are one of the most profitable airlines in the world yet charging such cheap prices. Are other airlines just not as efficient as low cost airlines?
In: Economics
They’re basically selling flights a la carte – the seat on the flight is cheap to attract people in, but then they sell a lot of add-ons that typically would be included with a ticket on more traditional airlines. For example, depending on the airline, you may be charged extra to pick a specific seat, have a carryon luggage, buy a drink on the flight, have a paper ticket, etc.
A lot of times, those add-ons end up making the ticket cost as much (or sometimes more) than a traditional airline ticket.
A lot of different things, the basic premise of low cost is to remove everything that is “non essential” (or add it back as a fee)
* So they’re only cheap if you stick to the bare minimum: moving from A to B, but they’ll slap you with additional fees for everything (carry on bag, seat selection, etc). It would be interesting to see what is the real average ticket price per customer.
* They use out of the way airports with lower fees
* They’ll cut corners on everything up to the legal limit, like making their pilots fly more hours etc.
Edit: Looked up last Annual Report for Ryanair .
Ancillary Revenues (inflight sales, luggage fees, etc) add ~47% vs Ticket sales.
So for a 100€ Flight, they on average book 147€ total revenues.
Edit2: I’m talking from memory, so it might not be true anymore, but they also used to have a “simpler” fleet of planes (like leasing a bunch of A320 from Airbus) that made maintenance simpler vs the large companies that have a mix of Boeing, Airbus, long range/short range.
Ryan Air carries 169million passengers a year, making a profit of €1.3bl. A profit of less than €10 per ticket.
British Airways (for example) passenger traffic is 37million, with a profit of £1.16bl. Actually much more profitable, more money fewer flights.
The short answer is Ryan Air serves an entire continent, the largest and richest market in the world – the EU and the UK. National airlines serve relatively small European countries, and can’t compete on the sheer amount of flights, but are generally more profitable on a per ticket basis. It’s not really accurate to say that Ryan Air is more profitable – it’s just serving more flights.
Their base product is very small. They charge you for everything. Don’t print your ticket? $. Want to have a snack? $. Then they use the thinnest seats in the planes which allows them to cram in many more people.
So high volume, low revenue per person, but volume makes up for it.
I was gonna make a car comparison, but that doesn’t hold up. A Honda Civic has more default options than my twice as expensive BMW.
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Do they sell cheap tickets? I’ve just tried to book a two hour flight within Europe. The headline price at Google was something like 230€ but by the time I had added on 1 hold suitcase (between two people) and all the other bits and pieces, it came out to 500€ each
130-400 people on flight aren’t all in for €30. Try to get same week ticket and it’s more expensive in multiple of times. So basically, guy sitting next to you might have paid 10 times as much as you.
But knowing there’s a chance to get a cheap ticket made you book it in advance long time ago, look it really up, and generally be up to speed with airline prices – basically, be an active customer on their market. Even advertise it on Reddit, as you did!
That is *really* good and predictable business for them, and since guy next to you paid for your, and probably bunch of other price-sensitive people’s share they lost from selling cheap tickets, they’re really fine with it.
If you’re organizing a concert, it is much easier to work you if sold the seats out weeks before, than just pay bunch of musicians to come, electricians to rig stage up, open the gate and wait what happens next. Airlines are no different in that aspect. Last-minute tickets carry a great risk of half-empty plane, and thus cost times more.
I always have a carry on, after the additional fee for that, which includes compulsory priority Boarding (which 90% of passanagers have, so it makes no difference) Ryanair is actually more expensive than Austrian Airlines.
Only by a couple of euros, but other things to note:
In my experience, ryanair aircraft don’t get cleaned between flights, your lucky if they collect the garbage!
Ryanair aircraft are sometimes old with threadbare seats and are so uncomfortable
Austrian airlines: marginally cheaper, comfortable, good coffee available, you get free water and chocolate, the aircraft is clean!
I have been sitting next to people on these flights that paid like €20,- where I paid like €275,- for the same flight but booked at a different time.
Imagine you go to the cinema and pay €10 for the seat, plus €5 extra to select your seat instead of having it assigned to you. Then you pay another €10 for snacks and €5 for a drink. You’re spending €30 all together, even though the ticket only costs €10.
Then you go to a different cinema and pay €30 flat, with “free” snacks, drinks, and choice of seating. You’re spending the same amount, it’s just calculated differently.
Now, if you go and really don’t spend any extra money – you don’t buy any snacks, you take any seat, and basically don’t care that you’re having a shittier experience – then it *is* cheaper to do it that way. But it’s only cheaper because you’re avoiding paying for stuff that makes the experience easier.
(BTW this is the same thing with Spirit Airlines in the U.S. – if you hear people joke about Spirit Airlines in American media, now you know why)
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