dark light

Ryanair headed for the red

Ryanair profits drop 85 per cent

Ryanair has warned it could make an annual loss of up to 60 million euros (£47.4m) due to high oil prices.

The no-frills carrier said that net profits in the three months to the end of June had fallen by 85 per cent to 21 million euros. This was below analysts’ expectations.

Ryanair’s fuel bill now represents almost 50 per cent of its operating costs, compared with 36 per cent last year.

Howard Wheeldon, of BGC Partners, warned that the airline would need to “at least double” ticket prices and take more planes out of service to cut overheads.

Chief executive Michael O’Leary said that Ryanair expected to break even at best in the year to March 2009, although he warned the company could lose up to 60 million euros.

This compares with a profit of 480.9 million euros in the previous year.

“The outlook for the remainder of the fiscal year, which is entirely dependent on fares and fuel prices, remains poor,” Mr O’Leary said.

Earlier this month, Ryanair said it would cut about 250 flights from Stansted this winter as it tries to offset the increased oil prices.

What a difference a year makes in aviation!

1L.

Member for:

19 years 1 month

Posts:

3,046

Send private message

By: MSR777 - 2nd August 2008 at 10:06

Beautifully put Andy, as usual on this topic you are spot on. These carriers have never reflected the true costs of what they do, supported as they are by one subsidy or another, usually a handling agent or an airport driven into the ground financially to get the business with the usual result of decimated pay and conditions for the many staff involved or handouts from local councils or trade bodies. These carriers have been very fortunate to have been spawned in an exceptionally long era of cheap fuel which has been at the centre of this flawed business model for a long time. As a senior manager at the then new “Go” airline once told me, and I quote, “If King Faud gets out of bed the wrong side tomorrow then we are all fu**ed” Its going to be very interesting, especially to those of us in the industry to see how these so called “low cost” carriers cope facing the costs of the real world in which they operate.

Member for:

19 years 1 month

Posts:

821

Send private message

By: alertken - 2nd August 2008 at 09:45

Andy: I’m sure you don’t intend evangelical elitism, but the Green agenda is just that – “I know better than you do what’s good for you”. If I think my journey is really necessary…then it is. Travel is a commodity open to all:

Nature of Trip:
1. Treat/Red Letter Day/Big Ticket Business:
Road: Chauffeur limo. Air: Bizjet/Legacy Carrier’s First/Upper Class.

2. Time-Sensitive:
Road: Taxi. Air: Legacy Carrier’s J Class, full of frills.

3. Personal Expense, from Net-Taxed Income, painlessly, please:
Road: Coach. Air: Y Class with frills.

4. Just do it, cheap, no fuss, no frills:
Road: Bus. Air: LCC.

LCCs do not replace posh, anymore than 3rd. Class rail replaced Wagon-Lits Cook. Nor do they adversely affect “the airline industry”: high price has its place, but those offering high prices need to offer a value proposition. High price + disdain for Customers = extinction. See: Swissair, Sabena, Eastern &tc. Genuine Customer choice= thriving sector. See: Waitrose v.Lidl, Savoy Tailors Guild v.Matalan. A place for everything, and everything in its place. You pays your money and you makes your choice.

Member for:

19 years 1 month

Posts:

1,877

Send private message

By: Skymonster - 2nd August 2008 at 03:55

Nobody forces anyone to work in the industry. There is stress involved in every job or should be. Why should aviation be any different? Time moves on and things change.

Oh get real! How many people can change careers just like that? We get this same old clap-trap from time to time – “if you don’t like it find another job”. The real world isn’t like that – people have skills and experience and moving to another industry, especially in times of economic difficulties, isn’t easy.

Once again this goes back to only certain sections of society would be able to travel by plane.

Only certain sections of society can do a load of things – some folks can’t afford to buy their own home, or their own car, or go to the cinema regularly. Get used to it. Its no one’s right to travel by air, but the cost of travelling by air needs to reflect the true cost of doing so, and also needs to pay those who work in the industry a realistic wage (which is happening less and less now that the low-fare brigade is established).

For someone to hide behind this argument to list private flying as a hobby it’s extremely hypocritical.

Not at all – see above. I freely admit that I own a part share in an light aeroplane. It is my perogative to do so as, at this time, I feel I can afford it. Using your argument about “only certain sections of society would be able to travel by plane”, the implication of your comments is that everyone should be able to fly privately as a hobby – just because flying as a hobby is there to do. You need to accept that air travel, like many other things, is a luxury and not a devine right?

How would it be then? Back to the 80’s days of Aer Lingus and BA’s charging £200+ for London to Dublin?

If that reflects the real cost of moving a person from London to Dublin by air – and in my opinion it is closer to the real cost than many “headline” cheap fares – and if that’s what it takes to provide some of the folks in the airline industry a reasonable living these days – then YES, the fare needs to go back to £200+. I don’t care that you won’t be able to do a day trip to Dublin anymore – that’s just the point, its the unrealistic market that’s allowing you to do it.

Ryanair has many positives which you have failed to mention. Such as the amount of jobs it has created throughout Europe. The increased tourism many areas have received because of there low cost flights. And best of all cheep flights for all.

Yes, they have created jobs. At what cost? I’ll leave that one for later, when we see how the industry shakes out during this downturn.

Yes, they have increased tourism. At what cost, to the enviroment if nothing else? As above.

No – cheap flights for all definitely should not be a justification for any low-cost airline to exist – again, see above.

Again, I will reitterate – I believe that the airline industry as an entirity would have been (and would be in future) better off without the likes of Ryanair, despite some of the dubious benefits such airlines bring to the market. On that basis, I continue to hope for their demise despite some of the problems that too would cause.

Andy

Member for:

19 years 1 month

Posts:

296

Send private message

By: cal900 - 31st July 2008 at 03:29

Not pathetic at all. Whilst I acknowledge that Ryanair and others of their ilk have done a lot to allow a certain segment of the population to fly regularly, the low-fare segment in general has also:

* Made the airline industry a far less pleasant place to work for almost everyone in the industry – has degraded terms and conditions, reduced pay and increased stress in the industry right across the board. What is the true price of your check ticket for those who work (or have worked) in the industry?

Nobody forces anyone to work in the industry. There is stress involved in every job or should be. Why should aviation be any different? Time moves on and things change.

* Whilst some will undoubtedly say that my wish to see Ryanair go away would hurt a lot of its employees, it remaining has the potential to hurt far more across the industry in the long term. Make no mistake – Ryanair offers low fares not because it wants to, but because it has to. When (if) the competition goes away Ryanair fares will rise. This is good neither for the staff at the competition who may lose their jobs, nor for the gullible punters who buy Ryanair’s cheap fares because sooner or later they might be shafted with higher Ryanair fares.

Andy

It offers low fares because that is its business plan. If Ryanair prices went to high competition would soon reappear, that is the market they work in.

Airlines have been forced out of business for centuries long before Ryanair turned up, it happens in all cut throat industries. Of course im not saying monopolies are good but its all a damm site better then the days of state aided airlines with huge prices imo.

* Vastly increased the problems attributed to the airline industry in terms of global warming and climate change. Were the low-fare sector not around, airline growth would have been much more limited and the man in the street’s perception of aviation in terms of climate change would be much reduced

Andy

Once again this goes back to only certain sections of society would be able to travel by plane. For someone to hide behind this argument to list private flying as a hobby it’s extremely hypocritical.

All in all, my opinion is that the airline industry in general would have been (and could be in future) far better off without the likes of Ryanair..
Andy

How would it be then? Back to the 80’s days of Aer Lingus and BA’s charging £200+ for London to Dublin?

Ryanair has many positives which you have failed to mention. Such as the amount of jobs it has created throughout Europe. The increased tourism many areas have received because of there low cost flights. And best of all cheep flights for all.

Member for:

19 years 1 month

Posts:

1,877

Send private message

By: Skymonster - 30th July 2008 at 23:29

Very good comment. I booked 3 flights last month for travel in the next week for the grand total of £7.26

Good for you. And what does your £7.26 do for the poor sods who have to work in and who are paid by the airline industry (and not just in Ryanair, but in other carriers too)? And what does it do for the environment?

Andy

Member for:

19 years 1 month

Posts:

1,877

Send private message

By: Skymonster - 30th July 2008 at 23:22

What a pathetic thing to say.

Not pathetic at all. Whilst I acknowledge that Ryanair and others of their ilk have done a lot to allow a certain segment of the population to fly regularly, the low-fare segment in general has also:

* Made the airline industry a far less pleasant place to work for almost everyone in the industry – has degraded terms and conditions, reduced pay and increased stress in the industry right across the board. What is the true price of your check ticket for those who work (or have worked) in the industry?

* Whilst some will undoubtedly say that my wish to see Ryanair go away would hurt a lot of its employees, it remaining has the potential to hurt far more across the industry in the long term. Make no mistake – Ryanair offers low fares not because it wants to, but because it has to. When (if) the competition goes away Ryanair fares will rise. This is good neither for the staff at the competition who may lose their jobs, nor for the gullible punters who buy Ryanair’s cheap fares because sooner or later they might be shafted with higher Ryanair fares.

* Vastly increased the problems attributed to the airline industry in terms of global warming and climate change. Were the low-fare sector not around, airline growth would have been much more limited and the man in the street’s perception of aviation in terms of climate change would be much reduced

All in all, my opinion is that the airline industry in general would have been (and could be in future) far better off without the likes of Ryanair. I do not regard my opinion as “pathetic” – it is merely my opinion as a person who is required to monitor and to an extent understand the dynamics of the airline industry as a part of their job, and as a former airline employee who is damned glad that they don’t work in the industry now that the low-fare airlines have made it what it is. As I said, I don’t think that ultra low fares are worth it in terms of their impact on airline staff across the board, and on the environment and in my opinion those who do think they’re worth it are being rather niave.

Andy

Member for:

19 years 1 month

Posts:

335

Send private message

By: Jet 22 - 30th July 2008 at 22:17

Which will hopefully just hasten their demise! 😀

Andy

To say i am not a FR fan that is a bit harsh. Maybe a bit more classier in the way they charge for stuff, so you dont get charged for check in (hey that is their job that is what they get payed to do so why in gods name are we paying into FR’S pocket when they are getting payed), charged for hold luggae (erm if you didnt offer soo many cheap flights in the first place you wouldnt have the dilemar:diablo:).

Member for:

19 years 1 month

Posts:

2,085

Send private message

By: tomfellows - 30th July 2008 at 21:14

I am no happier than anyone else that the cost of everything is on the up, but when it comes to flying I think we are heading into a situation where we will once again have to pay a price that realistically reflects the cost of flying.

We have had it good for some years, but can we really expect fly for £1.00 when the actual cost of flying us is many, many, many times that?

1L.

Very good comment. I booked 3 flights last month for travel in the next week for the grand total of £7.26. I’m interested to see how many of the 189 seats will be filled.

Member for:

19 years 1 month

Posts:

6,514

Send private message

By: PMN - 30th July 2008 at 14:01

What a pathetic thing to say.

Have to agree. 🙂

Paul

Member for:

19 years 1 month

Posts:

296

Send private message

By: cal900 - 30th July 2008 at 13:36

Which will hopefully just hasten their demise! 😀

Andy

What a pathetic thing to say.

Member for:

19 years 1 month

Posts:

1,877

Send private message

By: Skymonster - 29th July 2008 at 13:58

the bod from Ryanair said they are going to lower fares by 5% this winter :rolleyes:

Which will hopefully just hasten their demise! 😀

Andy

Member for:

19 years 1 month

Posts:

281

Send private message

By: Vicbitter - 29th July 2008 at 11:19

Originally Posted by steve rowell View Post
as per usual Joe Public will cop it in the hip pocket

Dunno, Stansted is my nearest airport so the local news had a bit about Ryanair on,the bod from Ryanair said they are going to lower fares by 5% this winter :rolleyes:

Member for:

19 years 1 month

Posts:

1,009

Send private message

By: OneLeft - 29th July 2008 at 10:38

as per usual Joe Public will cop it in the hip pocket

I am no happier than anyone else that the cost of everything is on the up, but when it comes to flying I think we are heading into a situation where we will once again have to pay a price that realistically reflects the cost of flying.

We have had it good for some years, but can we really expect fly for £1.00 when the actual cost of flying us is many, many, many times that?

1L.

Member for:

19 years 1 month

Posts:

1,719

Send private message

By: Mr Creosote - 29th July 2008 at 08:08

Might help if you could book flights on the stupid Ryanair website 😎

Might help if they traded-in the old One-Eleven shown on the BBC report last night. 😀

Member for:

19 years 1 month

Posts:

14,422

Send private message

By: steve rowell - 29th July 2008 at 07:09

Ryanair profits drop 85 per cent

Ryanair has warned it could make an annual loss of up to 60 million euros (£47.4m) due to high oil prices.

I think all the worlds airlines are in the same boat..and there doesn’t seem to be any respite from rising fuel costs in the near future..as per usual Joe Public will cop it in the hip pocket

Member for:

19 years 1 month

Posts:

11,401

Send private message

By: Ren Frew - 29th July 2008 at 01:47

Might help if you could book flights on the stupid Ryanair website 😎

It would also help if they didn’t ignore every customer service issue that is genuinely raised ! I think the Ryaniar model is wearing thin…:eek:

Cue the usual… “Ah but it’s so cheap” debate ! 😀

Member for:

19 years 1 month

Posts:

5,162

Send private message

By: A330Crazy - 29th July 2008 at 00:34

Im not suprised they are going under – their flights a little on the cheap side to say the least – ive got 2 flights to DUB booked with them – first cost me only 2p return and the second £2.

Making no profit what so ever, surely. Still im not complaining! :p

Member for:

19 years 1 month

Posts:

4,177

Send private message

By: tenthije - 28th July 2008 at 16:56

Well, Ryanair is always a bit cautious in their pre-anouncements. They say now profits will be smaller then expected, so when they actually announce the profits the markets will react favourably.

Member for:

19 years 1 month

Posts:

281

Send private message

By: Vicbitter - 28th July 2008 at 15:33

Might help if you could book flights on the stupid Ryanair website 😎

Sign in to post a reply