How about Ryanair?

[Joe Black]

Because Ryanair are a success, many think it's too good to be true - and therefore are looking for faults.

They're not in the EU's good books either.

After being told to hand back €4m in 'subsidies', apparently another investigation has started, this time over payments being made to a shell company of theirs to cover the costs of some of their ticket giveaways.

http://www.standaard.be/Artikel/Deta...kelId=GD4KNGFQ

[nobody here but us chicke]

ryanair

I know someone in the industry who says that the numbers just dont add up - he cant see how they have a sustainable profitable business. The implication being that..., errr...., well, something or other.

this from someone who was on the board of directors of several airlines.

[tim123]

I know someone in the industry who says that the numbers just dont add up - he cant see how they have a sustainable profitable business.

They have a sustainable business model because, (just like those telecomms companies who can offer transatlantic calls for 1 ppm) they cherry-pick profitable routes leaving someone else to pick up the 'network costs' associated with running the unprofitable routes. If an FR route doesn't load to 85+% they pull it and fly somewhere else.

This model works as long as there are enough places for them to fly to/from, for the number of planes that they have. Of course, they could try to expand too fast and end up with planes and no routes, but this would be a management mistake, not a fundamentally flawed model.

As to their costs, their accounts show that this works out at about 35-40 Euro per passanger, for a full plane. They aren't the only people achieving this (charter airlines have been doing for decades) and there get there by stripping out every cost that they can, including the costs of providing 'consumer rights'. This technique is common-place in other industries and there's no business reason why it can't be applied to air travel -except for the safety implications. It remains to be seen whether safety is compromised or not.

tim

[Francko]

[..] It remains to be seen whether safety is compromised or not.

tim

On the other hand, if anything bad happens with RA people will stop buying their flights and they will go bankrupt. So I am sure that they can't afford that and perhaps had to spend more than national airlines where a potential disaster will be more likely associated with an unfortunate natural cause rather than lack of maintenance.