April 23, 2010

Wiki Friday: Ryanair

Kind of romantic, actually:

The airline began with a 15-seat aircraft, flying between Waterford and London Gatwick with the aim of breaking the duopoly on London-Republic of Ireland flights at that time, held by British Airways and Aer Lingus.

In 1986, the company added a second route – flying Dublin-Luton International Airport, in direct competition to the BA/Aer Lingus duopoly for the first time. Under partial EU Deregulation, airlines could begin new international intra-EU services, as long as at least one of the two governments gave approval (the so-called "double-disapproval" regime). The Irish government at the time refused its approval, in order to protect Aer Lingus, but Britain, under Thatcher’s pro-free-market Conservative government, approved the service.

With two routes and two planes, the fledgling airline began.

But seriously, how is it so cheap?

1. online booking

The airline launched its website in 2000, with online booking initially said to be a small and unimportant part of the software supporting the site. Increasingly the online booking contributed to the aim of cutting flight prices by selling direct to passengers and excluding the costs imposed by travel agents. Within a year the website was handling three-quarters of all bookings. Today it is only possible to book seats via the website or via the "Ryanair direct" call-centre.

2.. september 11th

In 2001, the airline ordered 155 new Boeing 737-800 series aircraft at what was believed to be a substantial discount, taking full advantage of the downturn in aeroplane orders after the slump in air travel following the September 2001 aircraft attacks in the United States, to be delivered over eight years from 2002 to 2010.

3. the EU

In 1992, the European Union’s deregulation of the air industry in Europe gave carriers from one EU country the right to operate scheduled services between other EU states and represented a major opportunity for Ryanair.

4. sell other stuff to passengers

Much of Ryanair's revenue is generated from ancillary revenue that is income from other sources than ticket fares. In 2009 ancillary revenue was at €598 million, compared to a total revenue of €2,942 million.

5. simplify the plane

New Ryanair aircraft have been delivered with non-reclining vinyl seats, no seat-back pockets, safety cards stuck on the back of the seats, and life jackets stowed overhead rather than under the seat. This allows the airline to save on aircraft costs and enables faster cleaning and safety checks during the short turnaround times. It was reported in various media that Ryanair wanted to order their aircraft without window shades; however, the new aircraft do have them as it is required by the regulations of the Irish Aviation Authority.

6. make the airports compete

Ryanair negotiates extremely aggressive contracts with its airports, demanding very low landing and handling fees, as well as financial assistance with marketing and promotional campaigns. In subsequent contract renewal negotiations, the airline plays airports off against each other, threatening to withdraw services and deploy the aircraft elsewhere, if the airport does not make further concessions.

7. don’t fly to major hubs

Ryanair prefers to fly to smaller or secondary airports to reduce costs and fees. For example Ryanair does not fly to the main Paris-Charles de Gaulle airport. It instead flies to Beauvais, 85 km from Paris.

Still, it’s incredible.

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