Whatever you think of Michael O’Leary, the boss of Europe’s biggest low-cost airline knows how to play the media. “Ryanair CEO: ‘How I plan to make air travel free within 10 years’,” read one headline.
If Mr O’Leary really intended to make air travel free within 10 years, the board of Ryanair would despatch him immediately. The reason they tolerate his idiosyncratic management style is because he has turned a small and failing Irish airline into the biggest, most successful low-cost carrier in Europe.
As I wrote earlier this month, between April and September Ryanair made an average of £15 profit per passenger. With ferocious competition between airlines in Europe this winter, it expects to make only £3 a head between October and March.
Some Ryanair passengers will fly nearly free, and will represent a loss for the airline this winter. Looking a week ahead, you can fly from Stansted to Edinburgh for £9.99 most days. With Air Passenger Duty at £13, that means on paper Mr O’Leary will be paying over £3 to get you on board — never mind the fuel, aircraft leases, wages, maintenance, airport fees and air navigation charges on the 333 miles between the English and Scottish capitals.
But Dublin’s answer to Santa is betting that most people will also buy some combination of checked baggage, assigned seating, inflight snacks and drinks, and maybe even a scratch card.
“Ancillaries” comprise crucial revenue for Ryanair and other low-cost airlines. But fares are even more essential.
So when Michael O’Leary said: “I have this vision that in the next five-to-10 years the air fares on Ryanair will be free,” you have to bear in mind that he was talking to an audience of airport directors. The venue was the Airport Operators Association annual conference in London. By claiming: “We will make our money out of sharing the airport revenues”, he was making a bid for a slice of the lucrative revenue in the air terminal between check-in and the departure gate.
“I’ve long held the view that airports are just shopping malls, and I’ve therefore never understood why we should be charged for delivering people to shopping malls,” he added.
On the spectrum of Ryanair passengers, I think I am probably towards the frugal end, so I thought it would be instructive to look at the flights I have bought over the past year to see how “free” they are.
There are seven individual flights, from as little as £10 (Copenhagen-Luton, October) to as much as £172 (Rome-Stansted, May).
Crucially, I did not turn up for two of them: the £10 flight from the Danish capital, and a £20 hop from Edinburgh to Stansted in August.
Ryanair generally earns more money from no-shows than from real people. If you are unable to take a cheap flight with the airline there is neither opportunity nor incentive formally to cancel. But Mr O’Leary did nicely out of the Edinburgh-Stansted flight, since he had to pay neither APD nor the airport per-person fee.
The other flights, in ascending order of cost: £17 from Wroclaw to Stansted in January, £24 from Luton to Copenhagen in August, £42 from Stansted to Biarritz in May and £78 from Bournemouth to Girona, also in May. The average fare for the flights I actually took: £67, which probably represents the actual cost of providing the seat and the staff plus a few measly pounds of profit for Mr O’Leary.
Had I checked in a bag, booked priority boarding or bought a sandwich, I dare say he would have achieved that average £15 profit from me. But I believe “you’re only buying the flying” and I am loath to do anything that could multiply the fare.
The only time I checked a bag was from Luton to Copenhagen: that £24 was actually for the “Business Plus” deal, which includes a 20kg case and even an assigned premium seat (I chose 1A, thank you). Indeed, the reason the Danish capital features twice in my list is because there’s been a fares war between easyJet and Ryanair from Luton. Until March 2017, on most days you can find a £10 fare. But after easyJet retires hurt from the route at the end of the winter season, the lowest I can see is £31.
Outrageous profiteering? Hardly, for 600 miles of safe, punctual air travel. But not free. I put Michael O’Leary’s “prediction” in the same category as his stated mission at the same airport conference: “World domination followed by intergalactic domination.”Reuse content