Category Archives: Ryanair - Page 3

Ryanair to Niagara Falls (Toronto?)

Ryanair held talks with officials from Niagara Falls’ airport in upstate New York with an eye toward launching service to Dublin.  Admittedly, just about every secondary airport in the northeast has had their eye on this possibly-never-to-launch service, but it always makes for excellent rumormongering.  I don’t expect Dublin – Toronto (Niagara Falls) service anytime soon.

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Will Ryanair Fly Cheap Flights Across the Atlantic?

Ryanair announced that it will launch cheap flights across the Atlantic in the next 12 months if it can find the right aircraft cheap enough.  CEO Michael O’Leary said that they would subsidize their $13 coach fares with $1,500 business class fares on flights from Dublin and Stansted to airports near New York, Denver and Los Angeles.

However, this would only be able to launch if they can get aircraft cheap enough, and O’Leary says they need about 50 or so to make the operation work.  Ryanair’s 737s won’t make it across the Atlantic nonstop, so the 757 would make the most sense.  But (as we learned at Eos) there aren’t 50 757s floating around.  And the 757 can’t reach LA from Europe (or Denver for that matter).  So then you’re looking at a 767 (or A330), and from what we saw, good luck making money using that plane over the Atlantic (there’s a reason why Continental primarily uses 757 on those trans-Atlantic routes).  I’d say there’s a slim chance this ever gets off the ground, as the costs won’t make it possible.

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Mushroom Soup Causes Ryanair Diversion

(Thanks, Upgrade Travel Better):

A Ryanair flight from Budapest to Dublin was diverted to Frankfurt (well, Frankfurt-Hahn) after a man who is allergic to mushrooms discovered that his overhead bin was leaking mushroom soup onto his head.  I know that doesn’t make any sense, but it’s what happened.  He had an allergic reaction, had trouble breathing, and forced the flight to land so he could receive emergency medical treatment which, miraculously, Ryanair doesn’t charge extra for.

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Ryanair: If You Buy from a 3rd Party Site, We May Cancel Your Ticket

Ryanair is taking a rather harsh stand against so-called Screenscraping Sites that search its site for fares.  The airline now says that it will cancel the tickets of anyone who books through a third-party site that screenscrapes.  As it would be rather difficult for you (the traveler) to know how a third-party site is accessing Ryanair’s fares, your best bet will be to just go to Ryanair’s website to buy tickets.  This doesn’t affect most people – Ryanair says that less than 1% of its tickets are sold in this manner – but it’s rare to see an airline retaliate against consumers when they’re unhappy with 3rd party distribution (for example, American is now taking Kayak to court for how it displays their fares).

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Ryanair to Charge for Priority Boarding

I think it’s helpful to look to Ryanair to see what new fees those of us in the US can look forward to in the next year:  The low cost leader previously had allowed those who had checked in online to go through priority boarding for free.  The result?  The priority boarding line was often longer than the non-priority boarding line.  So they’ve come up with a better solution:  It’ll now cost you GBP4 (or 5 Euro, about $8) to get priority boarding.  Online check in is still free (for now).

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EasyJet: We Expect All But 4 European Budget Airlines to Fail

The head of EasyJet’s French operation made headlines by saying that having 50 budget airlines in Europe is “absurd” and that he expects only about 4 to survive (he cited Ryanair, EasyJet, one of the German low-costs, and an unspecified other in Europe as the survivors).  He added that if he were to increase fares by 10%, load factors would drop by 25%.

Just wanted to pass this along to remind us that airlines around the world are feeling the same pain.

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Obituary: The Modern-Day US Airline Industry, Transporter of Passengers, Dies at 30

The modern-day US airline industry, which allowed people to fly all over the country for roughly the same price as a couple of steaks at Morton’s, died last week after a long illness. It was 30 years old.

The cause of death was oil. And irrational pricing. And low fare carriers. And the economy. And a shaky business plan. And expensive hubs. And a weak dollar.

Born in 1978 after deregulation, the industry grew quickly, offering lower fares to an ever-increasing number of destinations, which changed flying from an infrequent-to-once-in-a-lifetime activity to a part of the culture of the United States.

No airline in the early years encompassed this explosive growth more than Braniff. The Dallas-based carrier embraced the new open policy head-on, snapping up routes from Dallas, Boston and LA all over the globe in a bid to expand at a rate that was never before attempted at fares that were never before offered. There was a reason for both: they caused the rather portentous demise of a once-great airline. After growing too quickly and offering fares that didn’t cover their costs, Braniff shut down in 1982 after more than 50 years in business.

Braniff was one of the granddaddies of US airlines, and its departure was followed later by TWA and Pan Am, which also were a link back to the golden days of aviation. All three in their own way were unable to cope with deregulation, be it due to hypergrowth (Braniff), or a lack of domestic feeder network (Pan Am and TWA). With their exits, the remaining airlines fell primarily into two categories: lowfare airlines and hub-and-spoke carriers.

The brutal combination of unprofitable fares and poor operations plagued industry upstarts since the days of People Express, a promising and innovative lowfare airline based in Newark. Where its business once allowed people to fly around the northeast for $19, it grew extremely rapidly without an infrastructure to handle either the growth or the revenue management aspects of its business, leading to a feeling of chaos for passengers and an untenable revenue situation for the airline.

People Express was sucked into the Frank Lorenzo vortex that eventually swallowed and destroyed once great or promising airlines such as Eastern, Texas International, New York Air, Continental and Frontier. Lorenzo consolidated (barely) each of the airlines into the Continental brand, leaving, once again, a chaotic operation with untenable fares in its wake. Following a relationship with labor that could at best be described as absolutely horrible, Lorenzo sold his remaining stake in the combined carriers and left the industry. His Continental Airlines, like many other carriers after it, declared bankruptcy as a way to reorganize their operations.

Though the industry continued to survive, a trail of smaller upstarts came and went without causing a dent in the aviation juggernaut. Today, the industry doesn’t miss seeing Kiwi, Air Florida, Eastwind, Shuttle America, ValuJet or the many other once-promising airlines trying to make a go of it.

While the majority of lowfare carriers floundered as they tried to compete with the broader networks and frequent flyer programs of hub-and-spoke airlines, Southwest Airlines managed to survive by maintaining a reasonable rate of growth, a strong underlying operations, and a low cost structure. These three factors allowed them to thrive while every other upstart was unable to successfully create all three sides of that triangle.

Hub-and-spoke carriers, meanwhile, grew in large part through acquisitions and through a growing network of regional airline relationships. Acquisitions in the 1980s and 1990s took out many regional airlines that had carved a niche during the regulated era but could not sustain life during deregulation. American scooped up TWA; Delta took in Western; Northwest grew by encompassing North Central and Republic; US Airways augmented with Piedmont and Allegeheny. And on and on. With each of these acquisitions, the airlines saw their networks grow but saw their unique cultures dissipate, leading to the labor strife that has addled the industry.

These airlines also grew through relationships with regional airlines that allowed them to reach smaller cities without having to build a network that reached to all of the dots on the map. While this allowed for a deeper network and greater feed into hubs, until the mid-2000s the primary result of this was that regional airlines such as Mesa and Skywest were able to grow wealthy on the backs of unprofitable network airlines.

The combination of each of these historical factors – poor operations, overgrowth, and a pricing structure that basically forbids airlines from raising fares to a profitable level – led to an industry that by this year was essentially a house of cards. Until recently, US airlines were comprised of hub-and-spoke airlines offering a full-service product with a wide network; lowfare carriers offering a lesser product and more point-to-point service; and regional airlines. With the shutterings of three airlines last week, the industry entered a new era that features regional airlines (mostly profitable, though since they primarily just operate flights without the tricky pricing and marketing element they are radically different from other airlines), hub-and-spoke carriers offering a no frills product, hub-and-spoke carriers offering a high-frills transcontinental product, and point-to-point carriers offering a passenger-friendly product.

The hub-and-spoke domestic product was the backbone of US airlines until its death last week. Once portrayed as an upscale product-and-service-heavy experience, the hub-and-spoke airline experience has sunk well below what was offered by so-called no frills carriers. In a bid for profitability these airlines are de-coupling base fares from every other aspect of flying while simultaneously refusing to offer product enhancements that match those of so-called lowfare carriers. The pricing premium that these airlines were once able to command has disappeared as their product has sunk to levels last seen on a Greyhound. Match this product with the disappearing domestic networks as hub-and-spoke airlines shrink their capacity and move it to international flights, and the death of the industry as it was known was inevitable. Watch soon for the first discussions of whether airlines have ripped out too much capacity to feed its international flights with a fear of looking like Pan Am and TWA – lots of flights overseas with not enough people on them.

The airlines, of course, have not died, just the industry as it was known. The new industry, born last week, will likely find a greater amount of point-to-point flying as Northwest has toyed with in Indianapolis and Milwaukee; a greater focus on high-yield transcontinental flying by hub-and-spoke carriers that offer a solid premium product (with high fuel costs, these longer routes are challenging for point-to-point airlines with only one class of service); and, if a hub-and-spoke airline gets bold enough, a link-up between one of them with a point-to-point carrier, allowing them to offer a solid domestic feeder product to its perfectly acceptable international product. This would allow hub-and-spoke airlines to remove some of the unprofitable flying from their network and offer focus to their operation. Consumers have no idea what product they’re going to get on a given airline, with some planes offering in-flight video, some offering meals, some offering nothing, and so on. A distinct domestic product – offered through a partnership – would provide clarity to a muddled industry.

But that’s not going to happen. The upside down world of full-frills “no-frills” airlines matched with no-frills “full service” airlines will be the new normal. No advertising campaign can change what everyone knows – the industry as we knew it is gone. And nothing is going to change that because airlines, for the most part, are slow-moving beasts. Instead, as oil approaches $125 a barrel, the industry, even in its newer, more dead form, will simply continue to fade away slowly, slowly, slowly.

The US airline industry is survived by a slower, subsidized sibling named Amtrak, an innovative stay-out-of-the-way-of-competition sibling named Allegiant, and a sibling named not-traveling-at-all.

In lieu of flowers, the airlines ask that you send peanuts.

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Black April: Skybus is 4th Airline to Shut Down this Week

I was just on my way home from an evening out, and I saw on the ol’ OTR phone that Skybus announced that it was shutting down, effective Saturday April 5th after less than a year in the sky. For those of you counting at home, that is the 4th airline to close down in the past week.

I’ll probably write something about all of this on Monday, but it is, as far as I know, the worst non-accident related week in the history of US aviation, with Aloha, ATA, Champion and Skybus all closing. Skybus blamed high fuel and a poor economy for their shuttering, but let’s be real: how can a poor economy hurt an airline selling $10 tickets? The fuel issue is very real, and at these prices, no airline can be a low-cost carrier without fuel hedges. Skybus really should blame a poor business model for their demise. As I just wrote recently, although Skybus was often compared to Ryanair, it actually had little in common with the Irish airline.

And as it’s 1 o’clock in the morning, I’ll wrap up by saying that the common wisdom was that there was almost nothing about Skybus’ business plan that made sense (as evidenced by longtime reader IAHPHX in the comments for this post). Turns out the common wisdom was correct. Next up? The smart money’s on ExpressJet…Or Virgin America…Or Eos…Or Silverjet…It’s going to be a rough summer. More on Monday.

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Skybus Is Not Ryanair

I’ve seen a boatload of articles that note similarities between Skybus and Ryanair (their low fares and low frills being the obvious ones), but I thought it was important to mention that they are actually fundamentally different models.  And this difference is why one makes money and the other likely will not.

Ryanair’s model has succeeded because their costs are low, of course, but also because they’ve built a network that of holiday and business destinations served by large cities across Europe.  Ryanair has gained notoriety for flying to tertiary and generally unserved airports across Europe.  But this misses a larger point:  that they have built a series of bases across the Continent in large cities, allowing them to serve a large number of smaller cities from that base once or twice a day profitably.  Ryanair’s bases include Rome, London, Madrid, Dusseldorf and others.

Skybus has one base in a mid-sized city trying to serve an assortment of primarily tertiary airports in business and holiday destinations.  Most of these tertiary cities have neither the bus nor train infrastructure to bring passengers to the city center.  Then once in the city, passengers need a car to get around (unlike in Europe, where many cities are well served by public transport).

On the cost front, Skybus has not been able to get costs anywhere near as low as Ryanair, meaning that they are unable to turn a profit when their revenues are also not where they need to be.  Certainly, they’re getting hurt by high fuel costs; but so is Ryanair.  It is the fundamental business — the single base in a mid-sized city, serving underdesired destinations.  Imagine Ryanair with one base in Bologna, Italy.  That’s the difference.

But all hope is not lost.  Skybus is not a terrible idea; comparing it to Ryanair is a terrible idea.  And in a bit of good news, they’ve started to make adjustments away from their original plan to make the airline look a bit more like…well, Allegiant.  Allegiant (I’m a shareholder, for full disclosure) serves tertiary cities from Vegas, Tampa, Orlando and a few other leisure destinations.  They serve these cities a handful of times a week in most cases, but they face roughly no competition.  Even with their high cost aircraft, they’re profitable.

Skybus is going to announce that new flights from Chicopee, MA (serving Hartford-ish) and Richmond to St. Augustine, Florida, with Chicopee getting an additional flight to Punta Gorda, Florida.  Skybus has already starting serving Florida from Portsmouth, NH, and Greensboro, NC.  These routes have done well.  And from these moves, you can see a route structure that looks like Allegiant…in a good way.  There are plenty of destinations in Florida that are underserved, and Skybus is already flying to some of these.  Taking the Ryanair strategy of flying to every little town in France that has a former Air Force base near it, Skybus can fly from unserved destinations in the northeast and midwest to unserved parts of Florida.  The world does not need more flights from the northeast to Fort Lauderdale.  But it could use 4-times a week service from Portsmouth to Punta Gorda.

Skybus is starting to move toward this strategy, and I commend them for it.  They’ve also been quick to eliminate service when it’s not working (another Allegiant hallmark).  There’s plenty of room for Allegiant and Skybus to co-exist.  And if they listen to me, I’m pretty sure Skybus will thrive as well.  (Note: sometimes it’s not a good idea to listen to me.)

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Ryanair to Shut Website for 3 Days

Airline reservations systems are notoriously complex — the integration of US Airways’ with America West’s was a major issue when the two carriers merged.

But it’s still a bit of a surprise to read that Ryanair will shut its website for 3 days (Feb 22-25) as they switch to a new booking system.  The move will likely cost them about $45 million in missed bookings, as about 98% of their reservations come through their website.  Their call center (centre) also will be unavailable for reservations.  In addition – and this is important if you have a ticket – you won’t be able to make changes during that period either.

It’s just a matter of time before Michael O’Leary tells customers not to complain about the shutdown because at Ryanair’s fares, you can’t possibly expect to actually be able to book tickets.

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