Professional Documents
Culture Documents
Ryanair Business Model
Ryanair Business Model
September 2011
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SUMMARY
In November of last year, Air Scoop published its first ever report on Ryanairs Business Model. The report was based on extensive research into the underlying mechanics of the most disruptive lowcost airline in Europe. It was also an attempt at drawing an exhaustive picture of the airlines development up until 2010, meant to serve, for years to come, as a reference work. This year, Air Scoop is publishing an updated report on Ryanairs Business Model, with a new task in mind. Starting from what was built last year, the 2011 Ryanair report has been conceived with a double objective in mind: to provide readers with a brief, compelling, synthesis of Ryanairs business model and highlight new elements and evolutions in Ryanairs skies. In no way is that report intended as a replacement of the one published last year, rather as a complement that should provide anyone interested in the European low-cost industry with a wealth of information on the markets most important company. Conceptually, the 2011 report was elaborated along two different axis of analysis. In a first part, the report starts by taking a look at Ryanairs revenues and expenses. According to the company itself, if Ryanair has grown so fast, it is thanks to an efficient mix of ever increasing sources of income and ever wider cost-cutting measures in all services. For this reason, the 2011 report looks, item by item, at Ryanairs cost-cutting, profit-maximising strategies. From the most discussed to the lesser known tactics, the goal is to show how Ryanair has managed and still manages to constantly extract increasing income from its passengers while maintaining rock-bottom prices, through a relatively complex fare system and a slew of ancillary services. The report also investigates Ryanairs largely misunderstood relationship with its own assets and how the airline managed to practically neutralise costs usually associated with aircraft and human resources, even turning airports into direct sources of revenues. The second part of the report is dedicated to a more analytical approach of the airlines structure, providing the reader with an analysis of what Air Scoop judges to be the three main strengths of the airline. Namely, Ryanairs legal strategy, whose dominant feature is an extremely proactive stance towards anything even remotely menacing to the airline, deterring irate customers from engaging legal action and submerging European regulators with complaints. Second, and perhaps most important, is Ryanairs financial structure itself, through which the airline has optimised every part of its business, taking advantage of varying legal and fiscal frameworks all around Europe. Third is the most visible, but also possibly the least understood, part of Ryanairs package for success, its communication. The airline, mainly through its hyper-charismatic CEO, Michael OLeary, has managed to be present in every form of media outlet almost daily. Whether it be in good or bad terms, Ryanair is being talked about, and gets into customers minds and on every newstand in Europe. Through this multi-faceted analysis, Air Scoop aims at providing the reader with a compelling view into the business of the hottest low-cost airline in Europe. By putting forward the airlines most public and hidden strengths as well as its most obvious and lesser known weaknesses, Air Scoop hopes to provide readers with a valuable insight into Ryanairs situation in 2011.
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TABLE OF CONTENTS
SUMMARY ..................................................................................................................................... 2 TABLE OF CONTENTS .................................................................................................................... 3 PART 1: How Ryanair changed the daily routine of the airline business ...................................... 4 A Services: selling fares and beyond .......................................................................................... 5 1- Tickets: how to reach rock-bottom prices .......................................................................... 5 2- Ryanairs ancillary revenues: how to add revenues to the airplane ticket....................... 11 B Turning costs into revenues .................................................................................................. 16 1- Planes: how to turn the most expensive commodity into a bargain ................................ 16 2- Personnel: human resources, human revenues ............................................................... 22 3- Airports: being paid to fly from nowhere to nowhere ..................................................... 27 PART II: The three pillars of Ryanairs business model ............................................................... 32 A- Legalism, finance and communication: Ryanairs sacred triptych ......................................... 33 1- Ryanairs legal strategy ..................................................................................................... 33 2- Financial relationships around the Ryanair Group ........................................................... 35 3- Ryanairs communication: be talked about, no matter how ............................................ 41 B- Limits and shortcomings of Ryanairs business model ........................................................... 43 1- Maintenance and safety: incompressible expenses? ....................................................... 43 2- Future perspectives: potential issues and evolution for Ryanair ..................................... 46 3- Putting it all into perspective ............................................................................................ 50 References .................................................................................................................................. 52
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PART 1: How Ryanair changed the daily routine of the airline business
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and charges related to tickets can be understood as ancillary the company relies on it in its accounting. Looking at a Ryanair ticket, it quickly appears that, beyond the advertised fare, lay a large number of miscellaneous charges and fees, often added at the last minute, sometimes avoidable (for a small number of customers) or just representing what customers would expect to see included in a traditional carrier fare. These additional charges and fees can be represented as a succession of circles surrounding the advertised fare, each one further from the centre as the expenses it covers become more avoidable. These four strata of charges form a complex web of rules destined to maximise passenger expenses by exposing them to numerous rules and taxes very hard to avoid. They can be understood according to different characteristics: 1 Variable amount fare: corresponds to the base fare Ryanair charges, and advertises, for a single trip 2 Additional compulsory charges: are charges related directly to the ticket or the act of travel that cannot be avoided by travellers except in the case of an exceptional rebate or promotional offer 3 Non-compulsory ticket related services: are charges and expenses that most passengers will not avoid, because they are directly linked with and often part of the process of buying the ticket 4 Ticket-related fees: are the penalties that passengers expose themselves to when failing to abide exactly to the complex rules of ticket buying with Ryanair.
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hyperbolic type of curves, with prices increasing exponentially as maximum capacity is progressively reached. It is worth noting that this phenomenon is not the fruit of a blind mechanism of offer and demand based on product rarity but rather a thoroughly thought through process marked by sporadic bumps in the curve signifying punctual price-increase followed by rapid decrease and stabilisation to try and maximise yield.6 Likewise, low-cost carriers have been found to adjust the moment they release tickets for sale according to projected demand and capacity on the route. If the projected demand is very high (out of which a proportionally high number of passengers will be willing to pay above original mark-up price) and capacity is low then the airline has all interest in waiting before releasing the ticket for sale, thus allowing for a steeper augmentation curve and a higher number of passenger paying more for the same service. On the contrary, if capacity is reasonable and demand not equally satisfying, the airline will have all interest in releasing its tickets for sale a long time in advance, in order to maximise chances of filling the plane to maximum capacity. Another factor in price-determination for Ryanair is its occupancy of a route. It has been found that on routes where it is the sole carrier, fares tend to be lower than on average. The reason for such a counter-intuitive phenomenon can be found in the fact that the routes on which Ryanair has quasimonopoly are very often set between two minor airports, sometimes quite remote from large centres of activity. Lower fares on these routes are then used as an incentive to increase demand7. Inversely, Ryanairs prices have been proven to be relatively insensitive to intense competition on a given route, with the sole difference in strategy being that tickets booked in advance tend to be granted greater discounts.8 Lastly, it should be noted that low-cost carriers are prone to discount flights that happen during the low that is mid-week for airlines while maintaining higher base price for flights taking place during the week-end or during holidays. A finer approach also reveals that flights departing very early or very late in the day may be priced for slightly less than flights taking place at more practical hours. Globally, Ryanairs pricing strategy make it apparent that, contrary to traditional carriers, the airline has made price its primary channel of attraction for passengers. This is coherent with a no-frills approach of the transportation industry. Additionally, in early 2011, rumours transpired that Ryanair may have set up a cookie tracking system on its website, allowing for an automated fare augmentation as users checked prices day after day9. Such an approach would be coherent with an attempt at educating consumers and forcing them to buy early so as to benefit from better prices. However, independent researches and attempts at reproducing the same price increase have proven inconclusive10, hinting towards a glitch in the online-booking system (be it from Ryanairs website or users) rather than a wilful exploitation of cookies information from Ryanair.
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Airport & Government charges: regroup several state-enforced charges generally dependent on the route covered by the travel or the location of the buyer. If the passenger is departing from a UK airport, one will have to pay the UK Air Passenger Duty (APD). This tax, intended to curb CO2 emission rates has been increased several times since 2006 and recently restructured. As it is, the companys website states that APD levies fees of 11 per passenger per flight inside the UK (bringing it to a 22 for a round trip) and 11 per passenger per flight from the UK to a European country12. Yet, Her Majestys Revenue and Customs states that such rates are applicable only to the lowest class seats in a 0 to 2000 miles range (Band A)13. As Ryanair expands its scope of travels, it might have to expose itself to heavier taxes and charges. Ryanairs website also states that depending on the country of departure for the flight, passengers might be exposed to several Government Tax depending on local regulations14. As an example, in France, passengers will be exposed to a Civil Aviation Tax of 4.11 for passengers departing from France to a European country and 7.38 for a non-European country15. It is worth noting that this is, according to Ryanairs own internal policy and Irish law, the only part of a ticket that the company is forced to refund to its customers. It has yet to happen, as the company passes onto its customers a charge covering administration fees that is systematically superior to the amount of the tax16. Airport Charges are, as stated on the companys website: [] a charge made by the airport authority to an airline for the use of the terminal, runway, emergency services, security facilities etc. In some cases this charge also includes the cost of passenger and ramp handling at the airport. This nonrefundable charge is made on a per passenger basis and varies from airport to airport.17 Ryanair has been well-known for its bitter on-going struggle with airports against these charges. As its growing customer base has given the company more and more momentum to negotiate with airports throughout the year, it has become bolder and bolder in its actions, boycotting Dublins airport in a protest against increasing charges and government taxes18. Furthermore, it is unclear whether rebates obtained from airports are directly passed onto passengers. Aviation Insurance levy: includes different expenses charged to cover exceptional events that may represent a cost to the company19. Soon after 9/11, Ryanair created an Aviation Insurance Levy. Indeed, the terrorist attacks of 9/11 contributed to the widespread idea that planes were much less safe than previously thought and insurance prices rose dramatically during the following year. To make up for that spike in costs, Ryanair introduced said-charge. The charge was originally set to 1.85 per passenger per flight but by 2006 it had undergone a 70% increase to reach 3.15. The charge is now 5.99 (or 5.22 based on current conversion rates) on Ryanairs website20. It has been criticised21 for not corresponding to real variations in insurance prices, as aviation insurance prices have since 9/11 consistently gone down. In 2006, the company defended itself by saying it was covering for losses generated by originally underpricing the levy. It remains to be determined whether, ten years later, the company has not yet made up for alleged losses. PRM (Passenger with Reduced Mobility levy): Originally named wheelchair levy, this fee has been recently rebranded as part of a general makeover of Ryanairs taxes and fees. The wheelchair levy was created after Ryanair lost a court ruling against Rob Ross in 2004. In 2002 Mr Ross, a sufferer of cerebral palsy and arthritis, was forced to pay 18 for a wheelchair because he was unable to walk to the check-in desk. Ryanair claimed it was not its responsibility but that of the airport to make sure that disabled passengers could reach the plane. Mr Ross took the airline to court and won a compensation of 1,336 after it was ruled that even though some airports were passing the cost of wheelchair services to airlines, it was discriminatory against disabled people to pass that cost onto them22. Following that decision and the repeal of its appeal, Ryanair declared that it would impose a charge of 0.50 (or 0.44) per passenger per flight to make up for the cost incurred 8
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by offering wheelchair transports to its disabled passengers23. The amount of this charge has been heavily criticised as largely exaggerated (considering that the airline boasts more than 73 million passengers per year, the charge should represent more than a 30 million gain for the airline) compared to the estimated cost of putting wheelchairs at the disposal of disabled passengers. Competing company easyJet estimated that such a service costs no more than 0.10 per passenger and campaigners for the disabled decried the company for profiteering from disabled customers24. EU 261 Levy: Also called Flight Delay/Cancellation Levy25, amounts to 2 (or 2). It has been introduced in April 2011, after the company was forced to pay compensations for flight cancellations even in case of force majeure (such as occurred after the Icelandic volcano ashes crisis in 2010). EU regulations 261 have been active for a few years now, but Ryanair said the elevated expenses generated by right to care obligations in 2010 forced it to introduce the fee26. Many commentators and rivals saw it as nothing more than a thinly veiled way of making up for rising fuel costs27.
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Priority Boarding: is the option given to passengers to be the first to board the plane. When it started turning towards a low-cost / low-fare model, Ryanair quickly abandoned pre-assigned seat as it incurred organisational costs and slowed-down the boarding process. Instead it opted for a free-forall system where passengers pick a seat as they get on the plane much like in a bus or a metro. But as the airline felt passengers travelling in groups would be willing to have a few more chances to be seated next to each other, it started selling priority-boarding tickets. The priority boarding option is priced at 5 per passenger per flight when buying through the website or 6 when buying through the call-centre. This option has been regularly criticised for several reasons. First, the maximum quota of priority boarding tickets on a plane is considered far too great. Ryanair allows a maximum 90 tickets to be sold with priority boarding per flight. Considering that its 737-800 can hold a maximum of 189 passengers, it makes a potential of close to 50% of passengers possibly buying priority boarding, thus practically voiding the supposed benefits of being among the firsts to get inside the plane33. Next is the fact that in some airports, priority boarding may be completely useless, as passengers with priority boarding will be the first to get on the bus taking them to the plane and, consequently, the last to get inside the plane34. Eventually, it has been reported several times that priority boarding was not even respected as the crew was under so much pressure to accelerate ground turn-around while priority passengers boarded the plane through the front door, the rear was open to non-priority-boarding passengers35. Ryanair is currently launching a service including priority boarding and pre-reserved seats on a few routes for 10 per flight and per ticket36. Available seats are on the first two rows for a quicker exit on arrival or the two rows near the wing emergency exits for more comfort. SMS Confirmation: by choosing this option, passengers will have the possibility of receiving a text on their cell-phones confirming that they correctly booked their flight. This option is charged 1 per passenger per flight and presented as an opt-in feature at the end of booking process. It has, conceivably, been rendered virtually useless by the forced generalisation of online booking37.
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done sufficiently in advance. Ryanair does as well offer that option, but against a 50 fee if done online, or 75 fee when done at the airport or through a call-centre39. The reason is, with an advertised average fare of 41, the company bets on the fact that passengers will book another flight rather than reschedule. Considering that it does not offer refunds40 on any tickets it sells, this penalty can actually be interpreted as a direct source of revenue for the airline. Re-editing fee: Ryanair has a very strict policy on personal information and identification papers. Even when travelling inside the same country or between countries whose customs and immigrations services do not specifically require it, passengers are to present their passports or ID cards along with their boarding passes. Failing to present a valid passport will bar the passenger from getting onboard the plane41. Moreover failing to provide the airline with the correct information, misspelling a name of mistyping a date42 will incur a nominal name change fee between 110 if done through the website or 160 when done at the airport or through a call centre43.
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Everything is ancillary
In 2011, Ryanairs ancillary revenues accounted for 802 million, that is to say 22% of the companys total revenues, their weight increasing regularly since 1999. The revenues may not be as optional as stated in their literal definition. When we look at their importance and the way Ryanair markets them on the first page of its website, we understand that they are crucial to ensure the firms profitability. In Ryanairs 2010 annual report, the ancillary revenues are gathered under four categories:
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As Ryanair is not a member of the International Air Transport Association (IATA), the company is able to impose its own restrictive standards for hand bags. According to the IATA guidelines, the maximum limits for hand luggage is 56 cm x 45 cm x 25cm whereas Ryanair compels travellers to one hand bag limited to 55 cm x 40 cm x 20 cm. The advantages are triple for the company: It cuts down the overall weight of luggage brought by passengers. For passengers unaware of this restriction (either their luggage does not fit the Ryanairs template or they have a luggage and a hand bag), they are compelled to have the luggage checked-in at the airport and it generates extra revenues for Ryanair as the minimum price for such a luggage is 15. It generates money as Ryanair sells on its website a Ryanair-compatible handbag made by Samsonite for 99 (a new model launched in July 2011 with a 25% price increase compared to 2010) along with the sale of the ticket. This last source of revenues is accounted in the internet income section
Hotel reservations: Booking.com is Ryanairs partner for hotel reservations. It used to be Needahotel before 2007 and Expedia in 2007-2008. There is no clear information regarding the deal between the two parties. Yet, we may get an estimate as according to the declaration of Cendant, Needahotels owner, the company had to pay 10 million to Ryanair when the deal was broken47 Hostel reservations are made through Hostelworld.com (for hostels, B&B, budget properties) and villas booking through Alwaysonvacation, a subsidiary of Vacation Renter Solutions (where owners advertise for their villas).
Motor coach & train transfer: As Ryanair flights take off and land in secondary airports, passengers who do not own a car or do not want to let it in the airport parking lot have to find a way to cover the distance and to go to the airport. In order to increase its revenues, Ryanair sells train and motor coach tickets on its own website. Although this service had been delivered by Terravision, a UK company specialised in connecting secondary airports to cities all through Europe, since 2004, Ryanair sued its partner in 2010 for an alleged breach of a marketing contract, a 7 million prejudice according to the plaintiff48. This method is very similar to the way Ryanair dropped Expedia in 2008. This will be interesting to watch. As a consequence, Ryanairs offer for motor coach and train tickets is rather limited in 2011 compared to last year: the company sells train tickets to/for Stansted, Gatwick, Reus (an operation base which will be closed on October 2011 because of a dispute regarding subsidies), and a few cities in Italy. Other advertised transfers are private transfers.
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Travel insurance: travel insurance used to be operated by Axa but since March 2011, the service has been brought by UK General Insurance (Ireland) Limited. The insurance is delivered according to the UK insurance law (even if the passenger travels from a foreign country to another foreign country). Credit and debit card fees: When arrives the time to pay Ryanairs tickets on the website, an extra fee of 6 is added per flight and per ticket. Until September 2011, the only trick to avoid the fee was to use a prepaid MasterCard, which remains pretty rare in the United Kingdom. From October, 4th 2011, the only way not to pay this fee will be to use Ryanair Cash Passport, a specific type of prepaid Mastercard49. Other prepaid Mastercards will generate a 6 fee per flight and per ticket. In July 2011, Ryanair was fined 500,000 by the Italian Antitrust Authority for unfair business practices. The company was condemned for a lack of transparency, inadequacy and lack of information. In particular, the statement pointed out that Ryanair failed to notice passengers of additional costs such as the credit card fees. The airplane company was also told to stop credit card fees in June 2011 by the UK Office of Fair Trading which stated that this fee did not reflect the real cost of the transaction and was not clearly announced upfront50.
Car hire
Hertz has been Ryanairs long standing partner for car-hire services (maybe the only long-standing partner as the first agreement goes back to 1998). The two companies signed a 5-year renewal agreement in April 2009. The agreement between the two companies is based on a per-passenger fee according to Ryanair 2010 annual report51. In fact, in 2007, car-hiring generated a 223.972 million revenue for 42 million passengers where in 2010, this service generated a 29.9 million revenue for 72 million passengers (hence a commission of 0.41 per passenger and per flight). Mobile phone roaming services: Ryanair has offered roaming services in Europe through its partner Maxroam since March 2011. Passengers can buy a pre-paid SIM card with an advertised lower cost by minute52.
In-Flight
Beverages, food and merchandise: Consistent with its business model, beverage and food are not included in Ryanairs ticket fare. Yet, the company is recognised to be one of the most expensive ones when it comes to in-flight catering53. Cabin crew members are incentivised on the sales and caterers are charged a per-flight fee so that their products can be sold on Ryanair flights. Ryanair is so attached to its ancillary revenues that the company made a passenger pay for a drink and food after he fell because he was ill. It is interesting to note that the company does not have any blanket or defibrillator on board54. Publicity: Ryanair generates revenues through putting advertisement on and in its planes. Publicity may be visual or via the public address system: in the (free) in-flight magazine, on boarding cards, on overhead lockers and tray tables, on the side of its planes55.
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Internet income
Gift vouchers: Ryanair sells gift vouchers on the first page of its website. The use of this voucher is constraining: administrative costs are as high as 5 for the giver, the vouchers must be used within a 12-month timeline from the purchase, and all vouchers are issued as a multiple of 25 and 50. If a voucher is partially redeemed, the difference is lost, i.e. if the fare costs 32, the receiver will use all of a 50 voucher and will lose 18. The advantages are numerous for the company as it generates extra revenues in advance, it increases the number of passengers and due to the 25 and 50 constraint, creates extra revenues at no cost for the company. Revenues from Ryanairs website: as Ryanair does not allow sales through third parties and as each of its 72 million passengers must check-in through the website, the number of people visiting Ryanair.com is as high as 15 million monthly unique visitors. Ryanair monetises its website in two ways: it offers the possibility to advertise on the website and in the newsletters sent to customers and it also generates revenues from the various partnerships we detailed previously, turning the website not only into a website dedicated to air travel but a website where one may buy entire holidays on the cheap. An animated banner on Ryanairs Italian website for one month will cost 387,600 whereas as simple text link will be invoiced 120,000 for a year56. Frequent flyer activities: even if this is not in Ryanairs values to develop brand loyalty, the company launched a credit card in partnership with MBNA, GE Money, Banco Santander, respectively available to Irish (MBNA), Swedish and Polish (GE Money), and UK (Banco Santander) residents. Revenues are generated from the number of cards sold and the revenues created by the use of the credit cards. For the customer, use of the card will offer free flights with Ryanair under certain conditions. For instance, expenses are cumulated over a 6-month period. This time period is fixed in two strips: between December, 11th to June, 10th and June, 11th to December 10th.
Once again, as for the gift vouchers, the use of these free flights must obey to strict constraints: Limited seat availability No travel during July and August 8-month validity from day of issue Flights must be booked one month in advance All taxes and fees are paid by the reward traveller Like with plane tickets, the credit card by Ryanair does not seem as advantageous as at first view when taking into account the constraints and the number of promotions the company offers on its fares (from 0.99 to 10).
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As a conclusion, ancillary revenues are not minor in Ryanairs strategy. The airline promotes a low fare from point A to point B and monetises every service around the trip from checked-in luggage to car-hiring. In most cases, the company subcontracts the services and creates partnerships with third parties. This contract is based on Ryanairs strength: its 15 million monthly unique visitors. It does not come as a surprise that a job offer as an Online Sales Executive (ancillary revenues) requires Experience in monetising website traffic as a core competency57.
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Buying aircraft, the Ryanair way: in 2002, decided it was time to buy more aircraft, but not just a few, a lot more. The company was planning for a 25% per annum passenger growth and its stock market introduction had been successful enough to provide it with large amounts of cash to spend. After lengthy undercover negotiations with Airbus and Boeing, in the beginning of 2002, Michael OLeary announced it had reached a deal with for a hundred Boeing 737-800 and an additional 50 options, to be delivered gradually until 2008. For the company, the time seemed right and a lot of reasons stood behind its choice: Ryanair was in a strong position, gaining momentum to take the undisputed lead on the European low-cost market The terrorist attacks of 9/11 had triggered a heavy downfall in the demand for new and used aircraft, putting aircraft makers under heavy pressure Boeing was offering a competitive offer: an estimated 37% rebate. Boeing 737-800 offered more seat and lower per-seat cost than competing aircraft Ryanair already owned a sizeable fleet of Boeing 737-800 Moving to a mono-aircraft fleet would generate important economies of scale The opportunity for phased deliveries would allow the company to fuel a steady growth Widespread use of the Boeing 737-800 meant cheaper parts and a large pool of pilots to choose from Of course, what really closed the deal were the financial conditions Ryanair managed to obtain from Boeing and CFM (which was to provide the motors). Along with that was the advantageous loan offered by Americas Export Import Bank, covering 85% of deal, while Ryanair only had to bring in the remaining 15% in cash. The total transaction would have amounted to $9.1 billion, had the aircraft been bought at their normal mark-up price. However, the deal obtained by Ryanair is known to have brought the bill much lower. Ryanairs boss, Michael OLeary, is known to drive a hard bargain but in the 2002 Boeing negotiation he seemed to outdo himself. Not limiting his foray to only one aircraft manufacturer he pitted Boeing against Airbus, reportedly faxing each one the others offer so as to drive prices down. He had apparently managed to get Airbus to cut its prices by half and was getting ready for a public announcement when Boeing made a last-minute bargain that seized the deal58. Later, describing the deal with Boeing, Michael OLeary would be quoted in saying we raped them59. The deal was widely quoted, at the time, as illustrating the powerful negotiating skills of Ryanair and the strategic opportunism of its management. Ryanair had been able to see that the downturn the airline industry had been facing since the end of 2001 was temporary and that it could take advantage of it. By choosing to invest when nobody else wanted to, it gained in bargaining power; all the more as Boeing was facing dire financial difficulties and not in a position to refuse a 100 aircraft offer. Eventually, investing at that time gave Ryanair the momentum to make the most of the air travel crisis and effectively follow its growth predictions by being able to cater to customers once the crisis was over.
Subsequent acquisitions
2003 Boeing contract: experiencing better perspectives than previously thought, Ryanair went back to Boeing as soon as 2003, to revise its order. It added 25 more firm orders for Boeing 737-800 and added 75 options to the deal. This brought the total order to a potential 250 aircraft and extended the delivery calendar to 2010. It ensured the company could close the decade with increasing capacity and maintain an aggressive stance on the market throughout the period. Notably, Ryanair managed to negotiate the revised order on the same price basis it had done the year before. Once again proof of the airlines impressive negotiating ability, the deal also highlighted 17
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a daring strategic behaviour as the company took further advantage of the bargain it had obtained the year before. 2005 Boeing contract: a few years later, Ryanair went back once again to Boeing. The company was apparently set on taking action to ensure prolonged growth beyond 2010 and expand its fleet. Once again, the company managed to negotiate on the basis of its previous orders, overwriting preceding quantities. The deal revised and integrated the 2002 and 2003 orders, adding 70 firm orders and as many options to the remaining 89 firm orders and 123 options left standing. This was also the last deal negotiated with Boeing. Actually, it is almost surprising that Ryanair managed to keep buying at reduced prices as, since then, global economic trends were faring much better (and would do so at least until 2008). The only prolongations of that contract were made through punctual purchase of aircraft that had been listed as options in the deal.
In a recent interview60, Michael OLeary indicated that the airline still had to take delivery of a further 40 aircraft to be delivered until March 2013 hence it will have the full extent of its order from Boeing. Yet, it would need 60 aircraft to meet the potential demand. A breakdown of Ryanairs order with Boeing reads as follow:
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The company has also been able to monetise any blank space it had inside the planes, advertising on overhead compartments and over the Public Announcement system during flights. For a time, it even tried putting advertisement on its convenience bags and on the fuselage of its aircraft. Speculative projects include: making passengers pay to use the toilets: a controversial project regularly resurfacing in the press. While there are no actual legal limitations to this, technical difficulties would greatly limit profitability. Suppressing two toilets at the rear of the plane: like the preceding idea, while there are no legal limitations, leaving only one lavatory inside a 189-seat plane would have too high a negative effect on passengers. Installing standing seats on short haul flights: beyond the legal and technical limitations (the seats would have to be able to withstand 16G forces) to such endeavour, as of now only conceptual solutions exist for standing seats, and it appears there would be little to gain from them in terms of space. Aircraft usage: while, when it comes to using airplanes, Ryanair has to use more or less the same rules as other companies, a few salient features stand out in practice, most of them revolving around reducing turnaround time and fuel consumption: Avoiding large hubs and choosing to land at small, less congested, airports For reasons exposed before (as well as for financial reasons), Ryanair tends to select smaller airports to land its plane. While this has given the airline a reputation of taking its passengers from nowhere to nowhere62, it has also largely served Ryanairs self-proclaimed reputation for punctuality63, avoiding both slot systems and direct comparison with competitors. The companys huge customer base serves it well when it comes to negotiating premium service with small airport who take such amounts of potential passengers as a blessing. Relying on a point-to-point route system Most low-cost carriers have based their route system on the deduction that they would be more profitable if they maximised aircraft flying time rather than trying to ensure connections and that their passengers would find a way to get to their final destination no matter how long it took them. Ryanair is no exception and its route system generally ignores large hubs, even where it could, the company does not offer connecting flights. Having cabin cleaning performed by cabin crew Instead of relying on external contractors to provide aircraft cabin cleaning at airports during turnaround, Ryanair contractually has its employees perform cleaning between flights64. Planes are completely cleaned at the end of the day by a dedicated cleaning service but, in between flights, cleaning is offloaded on on-board crew. This has occasionally led to hurried deplaning of passengers so that the crew had enough time to start cleaning within the 25 minutes timeframe before the next flight65 and occasionally botched clean-up inside the plane. As a result, echoes of general filthiness have stained Ryanairs reputation66. Not using pre-assigned seats Pre-assigned seats may usually prove useful for carriers in that it allows for smooth charge repartition and balancing of the plane but, on the other hand, it also adds tremendous complication by requiring elaborate computerised check-in system and sequenced boarding of the plane. Because it practices a single-class formula, Ryanair actually has the ability to board its passenger quicker. The only constraint it has is to put priority boarding passengers forward when it actually does so67.
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Deplaning and boarding passengers through both doors of the plane For the same reason as the preceding point, Ryanair has the opportunity to board its passengers almost all at the same time. To minimise boarding time cabin crew are instructed to board passengers through both doors of the plane at the same time. This ends up to almost halving deplaning and boarding time. But can lead to severe interference between normal passengers and priority-boarding passengers68. Loading/unloading cargo in only one bay Even if Ryanairs maximum cabin luggage is much smaller, and much more tightly enforced than the industrys average, the charges it imposes on checked-in luggage act as a strong incentive on its passengers to travel lightly. As a result, the company tends to carry way fewer checked-in baggage than any other to the point where it is thinking about moving to a 100% carry-on luggage policy. Such small average cargo load allows it to open only one cargo bay for luggage, which makes for much quicker loading/unloading and, as a consequence, participates in decreasing turnaround time. Relying on a single type of aircraft to minimise maintenance costs and facilitate swift servicing This point has already been explored in depth, but the fact that Ryanair has extended the use of Boeing 737-800 to the entirety of its fleet is a strong factor in its quick turnarounds. The 737-800 is a common type of plane in the airline industry and it is easy to find a large pool of qualified contractors to work on it during turnarounds. Imposing strict fuel consumptions limits on its pilots to avoid repetitive refuelling This will be explored more into details further on, but Ryanair puts a lot of pressure on its pilots for them to limit fuel consumption. Usually pilots have decisional power over the marginal fuel supply they want to load in excess, in case external contingencies would require the plane flying longer than foreseen or consuming more fuel. Ryanair enforces a very strict policy, limiting that additional reserve to 300 kilograms (or, depending on prices, a volume costing a maximum of 227) of extra fuel69. That amount of fuel translates into very little additional flight time, on average five minutes extra once the tanks are empty, leaving planes in a very difficult situation if they are rerouted at the last minute. To ensure that pilots will not binge on fuel, the company allegedly internally ranks its pilots based on their capacity to economise fuel. Such drastic measures have been noted to lead to quicker escalation in case of emergency and more frequent maydays on part of Ryanair pilots requesting priority landing at airports70. Advantages and efforts to improve: there are many advantages for Ryanair in limiting turnaround time. As of now its strategy fills both objectives of cost-minimisation and profit-maximisation. Crew cleaning the cabin, fuel limits and a single type of aircraft all contribute to diminishing cost incurred. On the other side, deplaning and boarding rules, cargo loading as well as airport choices all contribute to accelerate general turnaround time the most efficient tool being, perhaps, the pressure put on crew and pilots to respect their timing and maximise aircraft flying time and general profits. Steps have been outlined towards streamlining the process even more. Moving to a 100% carry-on luggage policy would constitute a step in that direction. Indeed, on-time performances are a major component of Ryanairs communication strategy. Even if the company is not a member of IATA, even if it is widely known to be the only one flying its routes, to set its own timing goals and to make its own measurements, it has to maintain at least a tangible expression of willingness to be on time for its passengers. Rushing turnarounds is a key tool towards that goal71.
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Ryanair is not the only company in the airline industry to have flight attendants pay for their training, many other low-cost companies resort to the same practice. Interestingly, training prices vary widely between 2,000 and 3,000 overall between agencies. Many agencies advertise the fact that the training needs not be paid for until the student passes the exams and that failing will spare students of any cost. This is not entirely true as all of the recruiting agencies require a minimum deposit covering between 10% and 20% of the total cost of the formation. In order to avoid aspiring flight attendants being put off by elevated training costs, recruitment agencies have put in place a wide range of strategies. Many of them insist on the fact that students only have to pay once they have finished the training while offering lower overall costs in training is paid upfront and in full they also insist on the fact that students can choose to have their training expenses deducted from their first year salary on a monthly basis. A major argument put forward to entice aspiring flight attendants is the advertised 1,200 New Joiners Allowance students have access to once they are done with their training . Lastly, some recruitment agencies offer custommade loans through special partnerships with Irish Banks. Employment: Ryanair cabin crew share the same duties as any other flight attendants in the industry and some more. Base affectation, while supposedly free, is made on a first come first served basis and wages do not vary depending on the place of affectation. Consequentially standards of living can widely vary for flight attendants depending on where they end up residing. A few differences in on board duties make working as a flight attendant for Ryanair stand out from the rest of the industry. Crews are responsible for sales on board and, while they may earn commissions on their sales volume, those commissions have an upward limit and they may be judged depending on their performances. Flight attendants are also supposed to take care of commercial announcements over the Public Announcement system while in flight and must clean the cabin between each deplaning and each boarding. Their salaries is calculated on their per-hour wages, taking into account that only time spent flying is counted as time actually worked. This means that once the plane touches land they cease to earn money the same is true for pilots actually. To their hourly wages they may add commissions on product sold on board, but these have an upper limit. This means that to actually reach advertised average monthly wages, crews must multiply flights and pile up on hours. Yet, once they have managed to get enough flight time to reach a decent salary, they will still have to subtract the monthly cost of renting their uniforms from Ryanair and, for the first few years, an average 150 per month to cover the cost of their training. Another factor contributing in differentiating flight attendants situation at Ryanair from anywhere else is the multiplication of contracts and situation among them. This is due first to the fact that newcomers are employed between one and three years by their recruiting agency, even though they work daily for Ryanair. This allows for higher flexibility for the company but also factors greatly in flight attendants stress. Indeed, they may be fired at any point and allegedly it mostly happens within their twelfth month of employment and, if they have requested the optional 1,200 New Joiners Allowance will have to reimburse it.
Pilots
Pilots situation at Ryanair is different enough from that of flight attendants and other pilots in the industry to justify spending some time studying them. It would be easy to say that they are better off than cabin crews although on some points they are but they are faced with their own hardships. 23
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Recruitment: hiring possibilities for pilots are directly advertised on Ryanairs website. The company generally looks for both experienced pilots and cadets, but they do not follow the same path. Cadets and insufficiently qualified pilots are directed to one of two training agencies: CAE or Oxford Aviation Academy. They then follow standards formation procedures apart from the fact that Typequalification course, base and line training are exclusively focused on Boeing 737-800. Just as flight attendants, pilots are expected to pay for their formation. With both agencies training to become a pilot totals up close to 30,000, excluding costs of accommodation, travel and miscellaneous expenses. These costs are subject to seasonal variations as the market of pilots for hire and Ryanairs own needs for pilots evolve. Employment: in spite of Ryanairs own claim that its pilots are among the best paid in Europe, evidence seems to show that pilots pay is largely within industry average, if not lower. Their wages are calculated, just as flight attendants, based on hours flown and, additionally, depend on the number of sectors flown. Pay scale also depends on pilots qualification, status within the company and their own bargaining skills. All in all, because of Ryanairs intensive use of its workforce, pilots working directly with the company are almost sure to reach the legal maximum 900 hours flown per year and take home a decent pay. However, when looking at numbers, one must take into account that they do not have any benefits such as pension provision and they have to pay for their security badges and uniforms. Moreover, just as flight attendants, pilots often do not even have a copy of their own contracts and may be subjected to uncompensated base changes at any time. An important preoccupation for pilots working with Ryanair is related to the multiplicity of status under which pilots work for the company. In effect, not all of them are directly employed by the airline and, at anytime, a sizeable part of the fleets pilots are actually contractors. This allows the company greater flexibility in managing the size of its workforce. But the greatest advantage it provides is perhaps also the least tangible: correlated with that flexibility is the bargaining power its grants Ryanairs management. As a result, whereas almost everywhere in the airline industry, pilots exert much power when faced with corporate management, Ryanairs pilots are astoundingly silent. This explains how the company manages to push to practice extremely short turnarounds, flying long hours and refuelling the minimum possible.
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organisation sought again recognition in 2009, Ryanair rejected it. As of now the union is still petitioning to obtain recognition. While, according to Ryanair, it seems that BALPA was in all fairness rejected in 2001 from representing its pilots, it should not be interpreted as a sign of plain satisfaction from their situation. Indeed, the sole existence of an online forum such as Ryanair European Pilots Associations (REPA), whose purpose is to provide an effective pan-European voice and source of support and organisation for Ryanair pilots in a confidential and reliable manner is proof that there are problems among Ryanairs pilots that the company is not properly addressing. Further than simply targeting pilots, online campaigns such as ryanaircampaign.org or Ryanair-be-fair have been advocating a better recognition of Ryanairs employees and an integration of unions into Ryanairs negotiations with employees. The airline does not seem to enjoy such bad press and has repetitively taken steps to discourage employees from taking part in such movements. It did so, first by intimidating pilots who would share their grudge through REPA, then by actually trying to legally force the website to disclose the identity of registered pilots. Ryanair has a bad reputation at maintaining good relationships between employees and management, even if it avoids most confrontations. But absence of public confrontations such as strikes or litigations does not mean that employees are particularly happy at Ryanairs. Two main reasons explain the absence of major litigations: Because of the inner structure of its contract system, dissatisfied employees who have been demoted or fired can rarely turn back against the airline as a large part of them are actually contractually employed by an external agency be them flight attendants working with Workforce International Contractors or pilot contractors under Brookfield contract. Because of Ryanairs routine attitude towards contestation. Be it with customers or employees, the airline seems to believe in legal over-escalation as a rule of thumb. The case of its millionth passenger is quite illustrative of the companys assertiveness and in many cases it has displayed an amazing willingness to go to extreme length with whichever litigation it was involved in72. Yet, this is not always enough to deter litigations and, in 2011, a pilot actually managed to obtain some sort of reparation. He had been fired two years before that for passing union leaflets to colleagues during a flight. The pilot obtained a settlement of 65,000 just before the case went to court. Since the beginning of 2011, Ryanair has also encountered several difficulties in Belgium. First, the company was exposed by a local newspaper after employees confided they were exposed to abusive drug tests. Then it appears that the company managed to enter the crosshair of the Belgian Centrale Nationale des Employs (a major national union) which repeatedly threatened to block Ryanairs base at Charleroi. Later in the year, the union launched an all-out campaign against the low-cost company, publicising in the national press work conditions it considers illegal in Belgium.
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The French case: as recently as September 2010 Ryanair was brought to court in France in a case related to workers on its Marseille base. Ryanair is being accused of fiscal dumping by declaring its workers in Ireland when they actually live and exercise their work from France. The case is centered on the fact that Ryanairs employees based in France are in an illegal situation. Although European legislation concerning mobile workers states that these are considered to be working in the country of registration of the vessel they work on, a French decree from 2006 regarding cabin crew and pilots working in France superseding European rule states the contrary. The company announced that it would plead against the decree, declared that it was behaving in accordance with European law and would take the case to a European court. After a French deputy asked, in an open question to the European parliament, whether Ryanair employees situation at Marseille was legal, the deputies answered by stating that airline employees based in a foreign country are not covered by European directive 96/71/CE and should pay social contributions and taxes in the country they live and work. Apparently fearing a high-profile and highly politicised trial, Ryanair brutally announced it would leave Marseille if the case was taken further. It eventually did in the beginning of 2011. The Spanish case: Ryanair has many of its continental Europe bases in Spain and that has not failed to exacerbate tensions with competing companies and Spanish airline industry workers. In September 2009, the six major Spanish airline industry unions wrote and signed a common document, addressed to various officials and ministers of the Spanish government, denouncing unfair practices from the part of Ryanair. The document contained stark accusation of social dumping. Depicting Ryanairs practices of employing and paying its Spain-based workers under Irish law and depriving them of Spanish social security, unemployment benefits or public pensions. It also denounced the fact that only counted as hours paid-for those scheduled and not the actual hours-flown total and the fact that pilots and cabin crews were not given anything else than a bottle of water for a days work and were expected to perform cleaning duty not in the scope of flight attendants normal duties. Unions also severely condemned the convoluted status of contractors working for Ryanair, most of whom are allegedly employed illegally having no copy of their work contract and are being denied the status of independent worker corresponding to their situation under Spanish law. These allegations led Ryanair to reply directly to the Spanish government, contesting them in a lengthy document and closing on a stark reminder of the importance of Ryanair for Spanish tourism. Following this, the Spanish government declared, in response to the unions allegations that the Irish airline did not benefit from any form of privileges in Spain and that it complied at least as well as its competitors with Spanish law. The company was eventually fined but for a measly 6,251 which had little consequences for the airline. The Italian case: in August 2010, reports appeared that the Italian Tax Police (Guardia di Finanza) had been investigating for a few months against Ryanair. The governmental body suspects the Irish airline of having avoided declaration of over 350 million in revenues. These coming from domestic flights operated in Italy by the company, they should have fallen under Italian taxation. The Italian Tax Police is still currently trying to determine in what extent can Ryanairs implantations in the country, and particularly its number of employees working year long from Italy, be legally considered a permanent establishment which would entail Ryanair paying full taxes for the business it makes in the country.
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This system is described in an article published in South Corsica (France) regarding Figari Airport74. The Chamber of Commerce created an association, the Ple des Comptences Ariennes Sud Corse (Aviation Experts Association of South Corsica) in 2009 when Ryanair opened the routes. Its official goal is to buy ads in airlines magazines and communication supports. It is difficult to provide the exact amount of subsidies perceived by Ryanair from each airport. One can only extrapolate from known data and facts released by a few airports to get an idea of how big subsidies are in Ryanair annual revenues and benefits. In March 2010, the French-Dutch airline carrier, Air France-KLM filed a lawsuit with the European Commission against Ryanair for receiving illegal aids and disrupting competition. Air France-KLM conservatively estimated that Ryanair received subsidies from at least 10 to 11 per passenger. Even if the study was made on French airports, the numbers appear to be consistent with European airports. With a number of 72.1 million passengers carried in 2010-2011, a conservative estimate of stateaids funds received by the low-cost carrier is 72.1 million passengers x 10 = 721 million With revenues of 3.630 billion for year 20102011, subsidies represent 20% of Ryanairs total revenue, which, like ancillary revenues, cannot be considered as marginal. For 2010-2011, Ryanair declared a profit of 401 million. The subsidies represent 180% of Ryanairs profit. The day subsidies cease, Ryanair profitability will be in jeopardy. What these numbers reveal is that the so-called profitability of the low-cost model is fragile: the companys business model relies on two pillars which are marginal for most other airlines. Secondly, the current market capitalisation of the company is based on an inaccurate estimate of its profitability and hence of its capacity to maintain sustainable growth.
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into renovating and improving airports. When Ryanair leaves them after a few months, they are left with debt and a huge waste of public money. Secondly, the company has been under investigation by various authorities (either at national or European level) on grounds that the subsidies were not compliant with the law. Providing subsidies is legal in Europe under certain conditions: subsidies must be given for a maximum of three years they must decrease over time they must be declared Subsidies received by Ryanair fail to match these three conditions. Some airports have provided subsidies for more than 10 years, subsidy demands by Ryanair have been increasing over time (hence some airports refusing to open their pockets for extra money), and it is really difficult to get accurate information, airport by airport, of the money given to Ryanair because the vast majority of subsidies remain undeclared. Subsidies are hidden behind a lot of different denominations and can be received either directly or through a Ryanair subsidiary, Airport Marketing Services Limited, dedicated to marketing aids: Direct yearly fees Baseline concessions on landing fees Marketing aids (for new routes) Per-passenger concessions on landing fees Per-passenger concessions on airport assistance Per-passenger landed subsidy France75 : most of the information related to subsidies in France are provided by the French national and regional Cours des Comptes, courts of audit depending on the French government. They audited the accounts and management of local and regional Chambres de Commerce (CCI - Chambers of Commerce) in 2008. The role of the chambers of commerce is to help develop and sustain local economy. The results of the audit found that the CCI were directly financing Ryanair, thus developing a specific private company on tax payers money. The amount of subsidies for 2008 was estimated to be around 35 million76.
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Spain77: The situation is Spain is not far from the one in France with payment of subsidies by the chambers of commerce (Camara de Comercio) on public money. Yet the financing systems seem to be a little more complex. Even if there was no national investigation, information were revealed after some airports refused to pay for extra subsidies and when Ryanair decided to stop flying to these airports.
Portugal78
Italy79
Belgium80
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Malta82
Slovakia83
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of the very same country they live in (needless to say that Irish work contracts are less protective than Belgium91 or French ones). For instance, Ryanair cabin crew may have to change bases without compensation and on short notice. If they decide to leave the company, they are bound to pay administrative costs. Ryanair considers that its work contracts are valid under European law 593/2008 EC92 and 96/71/EC93. The former indicates that employees can be subject to contractual specifications in respect of the law of another member state. The latter relates to workers travelling temporarily abroad to ensure the provision of service. What Ryanair does not say is that 593/2008 EC indicates that employees should get the social benefits of the country in which they live and that 96/71/EC was made for construction workers who were working abroad for short periods of time For this reason, this law does not apply for seagoing personnel who are doing the same type of job as cabin crew. Airports: subsidies are legal in Europe but their use is strictly framed: subsidies must be given for a maximum of three years they must decrease over time they must be declared As the company does not meet these requirements and wants to spend as little as possible at airports, subsidies are dissimulated under marketing aids or reduced fees. A subsidiary of Ryanair, Airport Marketing Services, is dedicated to this activity. Ryanairs system of subsidies inveiglement is clearly described in an article from Alcinida94: Ryanair demanded 600,000 for three years to maintain an all-year service of the Figari airport. The local Chamber of Commerce created an association Ple des comptences ariennes Sud Corse" (Aviation Experts Association of South Corsica) whose goal is to buy advertising in airlines magazines and websites.
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By acting like that, Ryanair demonstrates its retaliation capacity and overloads the European Commission with cases similar to the ones the airline is facing, buying the company time in the subsidies controversy. Another legal central issue for Ryanair is the one surrounding Dublin and Stansted airports. The two airports are crucial for the airline as an important amount of traffic is realised between the two bases. The airline regularly flares up against the British Airport Authority which owns Stansted airport and the Dublin Airport Authority. Ryanair accuses them of monopoly practices and advocates for lower landing fees and charges. It seems that Ryanairs voice was heard by the British Competitive Commission which announced in July 2011 that the British Airport Authority would be compelled to sell Stansted airport and either Glasgow or Edinburgh airport98. The situation is similar in Ireland, the only difference being that the capital city is serviced by one airport (with two terminals) only. Once again, the authorities are accused of slowing down the development of the company due to high taxes. In a recent press conference, in August 2011, Ryanair pointed out a decreasing number of passengers and increasing taxes at the airport. The airline offered to buy one of the two terminals at a maximum price of 350 million (Terminal 2, the terminal opened in November 2010, had cost 600 million)99. Even if no piece of the airport had been for sale at that time, the situation could evolve in the coming months as the Dublin Airport Authority is in debt of 1.2 billion. The airlines CEO is also virulent against the Irish Minister of Transport, Leo Varadkar, regarding the 3 travel tax maintained by the Minister. The politician refuses to abolish landing and passenger charges on the five million extra passengers Ryanair claims it would bring to Irelands three main airports (Dublin, Cork and Shannon)100. Even if Ryanair does not appreciate the European Union and sometimes calls it rubbish101, it decided to hire Charles McCreevy, a former Irish Minister for Tourism and Trade but also the European Commissioner for Internal Market and Services from 2004 to 2010. It does not come as a surprise that in complement of legal actions, putting lobbying into place thanks to the address book of a former European Commissioner is efficient. Even if M. McCreevy cannot take part in discussions of the European Commission related to Ryanair investigation due to potential conflicts of interests, he is known by European politicians and civil servants and is not prevented from talking to them and influencing them in the direction desired by its current employer.
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Overview
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The complexity of Ryanairs financial structure is actually hidden beneath Ryanair Holdings subsidiary, Ryanair Ltd. The company serves as a nexus point for the various investments and subsidiaries Ryanair possesses. Most of the subsidiaries appear to have been created with a particular purpose in mind, some of them obviously dedicated to reinvesting Ryanairs cash, or managing marketing subsidies or aircraft leases. Even in its financial structure, the company shows an impressive determination in minimising all possible expenses. Subsidiaries dedicated to aircraft leasing and financing have all been created on the Isle of Man, probably to make the most of advantageous fiscal conditions.
Aircraft financing
An in-depth analysis of possession structure for the aircraft in use by Ryanair reveals that the company actually owns very few of its aircraft. Instead, those are placed under finance leases under the property of other companies. While this does not mean that Ryanair is not liable for payment of its aircraft, it might allow the company to not declare these aircraft as taxable assets. The internal 38
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financial structure of companies actually owning the plane can be rather obscure. They are generally positioned outside Europe, often in fiscally advantageous places such as the state of Delaware in the U.S.A such is the case for King Leasing or RIL Aviation.
Personnel
Cabin crews
It is worth noting that, while Ryanair is under contract with four different recruiting agencies, only two of them serve as employment agencies, the two others redirecting recruited cabin crews toward them when it comes to creating a formal employment contract. This is consistent with Ryanairs will to only employ personnel under Irish law. Another salient feature is the close relationship Ryanair seems to entertain with Bank of Ireland. All personnel are required to open an account with the bank to receive their pay. Furthermore, most recruitment agencies only offer training loans through Bank of Ireland.
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Ryanair relationship with pilots, strained as it may be at times, is not as complex as the one it entertains with cabin crews. The company has no problem directly recruiting skilled and experienced pilots and in keeping with a well-established tradition of making the most of whatever situation it may have some power one it consistently avoids directly hiring freshly trained cadets and older pilots. Instead, it has outsourced most of the training process as well as the employment process, choosing to direct newly arrived pilots through Brookfield Aviation International, through which they are they hired as external contractors. Airports
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Ryanair is renowned for the way it has taken advantage of regional airports need for ever growing passenger volume. To the point where the company has often been accused of abusing taxpayers money by requiring payments from heavily subsidised airports. While, in the end Ryanair does profit from money that came from local taxpayers, the company never explicitly request it and all the choice is left in the hands of airports: either they pay, with whatever money they have, or Ryanair is not opening routes to their location. In order to avoid airports being pinned down for direct abuse of public money in an unfair situation because of the constant aids handed to Ryanair over the years a scheme has been repeated between airports. A scheme whereby the airport will create an association dedicated to the promotion of regional touristic assets, and while being heavily subsidised by the airport will pay marketing fees for promotional actions to an offshore subsidiary belonging to Ryanair. The subsidiary is generally, if not always, in the Channel Islands, and allows Ryanair to both escape taxes on marketing fees it receives and blur the amount of monetary transfers between the airline and airports.
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Secondly, Ryanairs website focuses on sources of ancillary revenues. By advertising its partners offers on its website homepage, the airline leverages its 180 million annual unique visitors to generate revenues through commission-based contracts with third parties. The company financial communication obeys to the same law. Ryanair is compliant with the International Financial Reporting Standards (IFRS) and provide required information; the low-cost carrier applies the same rules for its annual report as it does for its website. Four pages only are in colour, the other look like they were basically typed on Word with a Times New Roman police. Cheapness is also perceptible in advertising. Once again, the company is consistent with its positioning. The only thing Ryanair communicates on is price. Contrary to traditional carriers, Ryanair does not plan communication campaigns long in advance. It uses events in the news to advertise firstly on its website (it is less expensive) and from time to time in the newspapers. This strategy is the same across all countries: in the UK103, Italy104, and France105.
Communication is an expense; therefore let journalists and bloggers speak for you
There is no better way for your company to be known that to be in the news, cited by journalists and bloggers. To attract their attention, Michael OLeary relies on provocative declarations and acts. The more controversial the proposal, the more the company is cited in the general news, hence creating free advertisement for the airline. They can run from making passengers pay to use the toilets109 to a transatlantic business class offering in-flight fellatios110. Ryanair found another way to make the front page: its CEO sent flowers to unions which decided to go on strike during the summer111 or publicly thanked them for going on strike112. Far less expensive than a traditional communication campaign, the buzz borne from a controversial proposal or action will grow and be conveyed by the medias on TVs, in the press and on the internet. 42
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As a saying goes by (say whatever you want about me, good or bad, as long as you speak about me), Ryanair strictly follow this rule and does not diverge from it.
Care process
In Europe, the European Aviation Safety Agency (EASA) establishes maintenance norms113. Maintenance conditions are defined in commission regulation n2042/2003114 and in decision n2003/19/RM, Part 145 of November,28th 2003 and all maintenance procedures carried out are supposed to be done according to these guidelines to be EASA standards compliant. Ryanair, owning and operating exclusively Boeing 737-800 aircraft also performs maintenance checks in accordance with the U.S. Federal Aviation Administration (FAA) guidelines. These norms define conditions of acceptable maintenance checks and required personnel qualifications115. As part of its effort to comply with FAA regulations, Ryanair has, over the last few years, had to implement a number of additional maintenance procedures and minor changes on its Boeing 737-800.
All of Ryanairs planes return each evening to Ryanairs bases where they are examined by Ryanairs engineers, except for several bases (Charleroi, Skavsta, Ciampino, Hahn (soon), Bergamo, Marseille117, Girona, Madrid, Alicante, Weeze, Kaunas, Bristol, Brindisi, Bari, Pescara, Trapini, Bologna, and Cagliari) where external contractors perform examinations.
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This arrangement allows Ryanair to carry out most of all the routine maintenance procedures its aircraft need. Yet, the company is still unable to perform some of its heavy maintenance needs inhouse and relies on external contractors with which it enters into short-term contracts. Concerning heavy maintenance, the new three-bay hangar built in Prestwick should allow the company to start accommodating the maintenance requirements expected to arise as soon as Winter 2010 due to the aging of a part of its fleet. Engine overhaul services have been contractually offloaded to General Electric Engine Services118. Since June 2008, the contract covers all the aircraft bought under the different Boeing orders. Pursuant to the contract, General Electric Engine Services ensures repair and overhaul of every engine at its own facilities119.
Litigations
When time came to increase maintenance capacity, Ryanair sought to expand on what it already had by looking first at its Irish base in Dublin airport. Trying to secure more space for line maintenance, in February 2010, Ryanair made an announcement it was willing to invest in a maintenance hangar at Dublins airport. The hangar in question, hangar 6, formerly used by SR Technics, a maintenance contractor, had been sold by SRT to the Dublin Airport Authority (DAA). Following this acquisition the DAA signed a 20-year lease for the hangar with Aer Lingus. Claiming that Aer Lingus was not using the hangar at all, Ryanair demanded the Irish Government cancel the lease and give it control of the hangar120. Upon encountering resistance from the government and the DAA, the company launched one of the media offensives121 it is used to, defending that it would create 500 jobs by turning the hangar into a maintenance facility and accusing the government of incompetency for refusing to support its offer. When the Minister responded by asking why Ryanair would not build a new hangar airport land or accommodate its facilities in other hanger, Ryanairs management avoided response, insisting on job losses. But the promised job creations were far from certain as Aer Lingus, the hangars new user had planned on hiring 250 new employees for maintenance and as Ryanair rarely hires locally. Eventually, the Irish Government refused to bulge and Ryanair chose to construct new facilities at Hahn airport122.
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the total 8 million invested in the hangar126. These subsidies were distributed under Scottish Executives Regional Selective Assistance programs, due to the fact that Prestwick Airport is part of the Tier 2 Scottish assisted Areas127. Though, companies eligible under Regional Selective Assistance criterion do not need to be Scottish, the amount of help granted is dependent on the companys size128. Thus, it seems that creating a new, local, company to manage Prestwicks hangar could actually be of some interest to Ryanair. A similar arrangement can be found at Stansted airport where all maintenance accomplished for Ryanair is operated by a company called Stansted Aircraft Maintenance Systems Ltd129. The company is British but positions are advertised and filled through Ryanair130, reasons for such a structure in Stansted remain obscure. At other airports such as Bremen, Hahn, or Skavsta, line maintenance is provided by medium to large external contractors such as Boston Air131 or Priority Aero Maintenance132 for Ryanair. The only maintenance base where Ryanair seems to operate maintenance directly under its name is in Dublin Airport133. For turnaround check and rotable repairs, Ryanair relies exclusively on external contractors. It is a part of its strategy to minimise the number of in-house employees. The only part of maintenance it operates in-house is heavy revision and airframe maintenance at its main bases134. When it comes to handling maintenance contractors, it has been reported that Ryanair forces external contractors to lower their costs for the company. Allegedly, the company coerces contracted companies into creating Ryanair-dedicated subsidiaries employing lower-paid employees. As a result, engineers taking care of Ryanair planes on the ground are often found to be less experienced, less skilled and less paid than any others135. This comes down to lighter aircraft handling costs for Ryanair but could also lead to major safety and security issues surrounding planes overtime.
Safety Issues
When it comes to safety issues Ryanair makes no secret that it has an almost spotless record of fatalities onboard any of its planes. However this information needs to be contextualised as it would be rather unfair to compare 26-year-old Ryanair with any traditional carrier twice that age. Aircraft safety and flying procedures have drastically improved over the past decades. While Ryanair is not responsible for any case of crash or passenger fatality, the company has a generous track record of incidents with its planes. Generally these incidents fit a pattern, which allows outlining several categories of incidents likely to happen with Ryanair: Bird strikes: More than a dozen bird strikes on Ryanairs plane have been recorded since 2006. However, the problem of bird strikes is not unique to Ryanair. Bird strikes have an industry-wide impact136 for air travel and represent a strenuous cost to airlines and passengers as well as a cause for concern safety-wise. While Ryanair is not the only company affected by such a problem it remains to be determined if using small, remote, airports increases the companys exposure to such events. Bird strikes on Ryanair have generally been followed by a complete revision of the engine affected. Perhaps one of the most iconic incidents of that type took place on Ryanair plane flying to Ciampino on November 10, 2008, the loss of power on the engine led to an emergency landing 137. Damage on the engines was sufficient to have the aircraft written off. Yet most of the time, the plane is actually salvageable and, expect when engines are damaged in a way that may jeopardise the plane landing, usually passenger are not injured. Passenger related incidents: This type of incidents can be fairly common on Ryanair flights. They are mainly related to two causes, either passenger suffering of a major health problem and requiring immediate medical attention, or, on the other side, unruly passengers refusing to comply with airline 45
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policies. While unruly passengers can be found on all flights, it seems that, thanks to its low price policy, Ryanair is a favourite for stag parties and students binge weekends138, while this is not routine, recurring events of drunken passengers disrupting procedures on board have been reported. However these events, generally do not translate into any damages for other passengers. When it comes to medical emergencies, a recent incident has highlighted a possible lack of qualification on part of cabin crews, as a passenger suffering a heart attack was given nothing but a sandwich and a glass of water, which he had to pay for139. Insufficient maintenance: A consequent number of incidents have hinted towards insufficiencies in maintenance on Ryanairs aircraft. While a consequent part of reported incidents where linked to faulty sensors and alarm signals, the fact that these are faulty are in themselves a sign of bad maintenance. Other occurrences are more worrying, revealing weaknesses in the general state of planes. Several incidents related to misaligned flaps, engine malfunction and landing gear troubles have occurred over the past five years, leaving doubts regarding the adequacy of Ryanairs maintenance. Poor pilot training: Several incidents have revealed limits in Ryanairs pilots skills. Since 2007, four tail strikes were recorded, as well as a couple of cases in which planes ran off runaway for fault of properly landing and a case when a Boeing 737-800 struck a building with one of its winglets. It appears that some of Ryanairs pilots are not always fully capable of managing their aircraft in difficult situations such as bad weather or abnormal conditions. This can also be explained by the fact that pilots are under very heavy pressure from Ryanairs management to meet turnaround timings, leading to a number of high-energy approach and dangerous manoeuvres at low altitude140. Fuel shortage emergencies: As stated earlier, Ryanairs aircraft fly with marginal fuel reserves lower than industrys average. While these are not always listed, for lack of being declared proper emergencies through a mayday, various sources report Ryanair planes frequently requesting priority landing due to being short on fuel. Nevertheless, up to now, no major problem has emerged from these situations of very low fuel reserves. It remains to be seen if such a policy stands the test of time. Disregard for safety regulations: Recently, indications of disregard of regulations onboard Ryanair planes have surfaced. It appears that some of Ryanairs Boeing 737-800 are flying without all their carts, compromising the latching of carts stored in the galleys. It also appears, that crews do not always use fire proof rubbish bags on carts and in the toilets, which could result in a potential fire hazard during a flight141. It is unclear whether these are occasional occurrences or the result of systematic cost-cutting on part of the airline.
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The biggest vulnerability for Ryanair regarding its commercial practices lies with their legality. As of now, Ryanair has always managed to remain within the realm of the law with the fees and taxes it charges. However, around Europe, echoes of discontent have risen from consumer associations and legislators, hinting at a possible future where Ryanair would have to include all miscellaneous fees in its advertised fares. In 2011 only, British consumer association Which?, launched a widely publicised, so-called, super complaint against unfair use of credit and debit card fees142 by retailers, taxis and low-cost airlines. Foremost among airlines targeted was Ryanair, which charges 6 or 6 per passenger per flight for the use of credit/debit cards. The British Office of Fair Trading, recipient of the complaint, subsequently accused low-cost airlines of profiteering from the surcharges and requested that, at the minimum, these be declared upfront, instead of at the end of the purchase143. Although Ryanair has officially denied it charges such a fee, the airline has simply changed its name to that of administration fee. The OFT has publicly called on the government to make these fees illegal; the outcome of this remains to be seen. In Spain, Ryanair has been under attack by another consumer association, FACUA Consumidores en Accion, which contented that Ryanair was the most abusive company in Spain144, according to a survey it made. Unaffected by the announcement, the airline took the association to court for slander145, but the trial ended abruptly with a Spanish judge declaring that FACUA was within its right to express itself in such a way146. Earlier that same year, Ryanair had clashed with the Spanish Ministry of Industry over the fact that it had been slammed with 64 different fines for unfair commercial practices147. The total sum of the fines came up to 1.23 million. Ryanair threatened to cut flights and jobs in the country if the government refused to lift the fines immediately. The matter remains unresolved and, even though Ryanair has cut flights in Spain, it is almost certain those cuts were motivated by financial reasons rather than retaliation as the airline could hardly afford to lose an inch in the booming Spanish market. In 2011, Italian authorities fined Ryanair 500,000 for unfair commercial practices under antitrust rules. Several other airlines were sanctioned, but Ryanair took most of the brunt as the authorities accused it of making use of deceptive advertising, lacking indication of add-on fees, difficult if not impossible refunds, untranslated general terms and conditions and unjustified additional charges. Ryanair immediately declared it would appeal the decision; the outcome of the affair remains uncertain. It is not the first time the low-cost airline is the object of fines. As long as these are one-time fines, they do not seem to be too much of a bother for the company. However, repeated, year after year, fines might have an impact in the opposite direction, motivating authorities to strengthen local laws regarding commercial practices.
Aircraft
The question of oil prices: the biggest unknown regarding Ryanairs future perspective is an industrywide problem, namely, the future evolution of oil prices. Behind this question lie the answers to most of Ryanairs future perspectives, be them prices, ancillary revenues, aircraft policy or even human resources. Prices for fuel used in the commercial airline industry are extremely sensitive to oil prices. For the past few decades, oil prices have been slowly but surely rising. However, since 2007-2008, brutal peaks and fall-backs in the trading of future commodities have seen fuel prices hit new highs. The 47
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wild and partially unpredictable variations in year over year prices have made fuel hedging all the more difficult. This has, in turn, made airlines extremely cautious regarding their previsions of future expenses. Most airlines have tried to protect themselves from brutal, excessive, variations of jet fuel prices by adding a fuel surcharge to their fares, indexing the charge on current fuel prices. Ryanair, with its usual communication savvy, has taken advantage of that situation to turn it into a marketing advantage. The company is now basing part of its communication on the fact that it does not add fuel surcharges. The surprise creation of a EU261 fee in the beginning of 2011 was interpreted by many as a proof that Ryanair had had to create some sort of additional surcharge to cover climbing oil prices, yet it has not prevented the company from claiming it did not have any fuel specific surcharge. It remains that Ryanair, like any other airline in the industry, remains vulnerable to future augmentations in fuel prices. For years, the Irish low-cost has had a bad reputation for inadequately hedging fuel148. Actually, what Ryanair seems to fear most is not a global economic crisis as more price-sensitive passengers tend to be attracted to its offers but an unstoppable rise of fuel prices due to rising demand and dwindling reserves. That last case, though probable, would have limited consequences for Ryanair as it would touch relatively equally all other actors in the industry. Potential aircraft fleet evolution: at the time of this writing, it should be noted that, contrary to the airlines long-term planning habit, Ryanair could be running short of new aircrafts in the near future. The company tried to get back to Boeing in 2009, with a prospective order of 100 firm aircraft with a further 100 options. According to Ryanair, it was planning on negotiating once more on the basis of its previous order. But Boeing, probably rendered more confident by a more favourable economic context, refused to further grant any particular rebate to the Irish low-cost. Negotiations turned sour and finally hit a dead-end when Michael OLeary announced that he would rather distribute its aircraft buying cash on dividends for his investors than buy at higher mark-up than he was used to149. Despite the amount of bravado the CEO displayed with that decision, his companys situation was not much bettered by the dividend. Ryanair still needs more planes if it wants to grow and, come 2013, it will have hit its limit. Ostensibly shunned by Airbus and Boeing, Ryanair made clear this year that it would have no problem turning to Chinese aircraft maker Comac or its Russian equivalent United Aircraft. It even went so far as to sign a Memorandum of Understanding with Comac over the conception of its future narrow-body airliner the C919. While the MoU generated a lot of wild speculations regarding Ryanairs future plans, a few sizable obstacles remain. A major hurdle is that buying from Comac would mean going back at least for at time to a dual aircraft fleet, depriving Ryanair of much appreciated economies of scale. But, perhaps, the most important obstacle lays with the fact that the C919 will not be ready for commercialisation until at least 2018. Even if Ryanair were the first buyer, it means the company would not get new aircraft for five years. Transatlantic venture: since 2008, Ryanair, through its CEO Michael OLeary, has repeatedly raised the possibility that it could launch a transatlantic venture, connecting Europe to the United States with an extremely cheap economy class and a standard business class. The idea, while regularly repeated with success in the press, has also been derided as no more than a marketing gimmick something confirmed by the fact that the company has made no real move toward realising the project. Moreover, it is worth noting that trying to establish transatlantic flights would require a huge shift in strategy for Ryanair. Requiring a whole new fleet of adequate aircrafts. Lack of appropriately priced offer on that front seriously limits Ryanairs possibilities for the time being. Furthermore, structural complexities of transoceanic operations would force Ryanair to review a major part of its 48
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employment policy. These factors contribute in making the venture a highly speculative idea rather than a serious possibility.
Personnel
Regarding its recruitment and employment of personnel, Ryanairs perspectives seem rather positive for the company. There are no shortages of aspiring flight attendants and evolutions of the airline industry point in the direction of and ever larger wealth of available pilots. However, on that point, the airline is the object of regular attacks, and may suffer from a potential large-scale, successful attempt at unionising its employees. In 2011, Belgian union CNE has been extremely active against Ryanair, denouncing publicly working conditions with the airline, what it judged as abusive drug test and unfair and unlawful employment practices. The union does not legally represent Ryanair employee but has managed to create pressure on the airline through its ability to put Charlerois airport staff on strike. Currently, the union has launched a campaign150 against Ryanair and announcement it would seek legal action against Ryanair and Crewlink151. It remains to be seen whether the union could actually succeed in securing representation of Ryanair employees, however the campaign could also lead to an involvement of Belgian authorities, a perilous situation for Ryanair.
Airports
Though it appears that questions have been raised all over Europe regarding the legality and/or the fairness of airports subsidies to Ryanair, a limited amount of legal inquiries have been led. These have but proven conclusive, either for Ryanair or for defendant of a fair approach to airport subsidies. The Strasbourg case: one of the very first cases of legal action against Ryanairs subsidies form airports took place in France, in 2003. Following a plaint by Brit Air - a subsidiary of Air France a French tribunal in Strasbourg ruled that the subsidies estimated at 1.4 million per year that had benefited Ryanair were illegal152. The airline promptly appealed the judgment, but the court of appeal found no reason to invalidate it and that the airline would not be able to receive any more aids from Strasbourgs airport. First declaring that it would appeal again, the airline eventually decided to move its operations across the border and set its routes in Baden-Badens airport, in neighbouring Germany153. The Charleroi case: historically, the first legal approach at a European level of Ryanair subsidies system has been the Charleroi Case. Ryanair opened its first route with Charleroi airport in 1997 and, several years later, decided to actually open a full-time base at the airport in 2000. As its arrival at the base had generated a move in traffic from less than 20,000 passengers to more than 500,000 by 2000, the company was able to negotiate very advantageous conditions for its establishment. In effect, Charlerois airport authority accepted to lower its landing taxes by 50%, its per person landing charge from 13 to 1 and its baggage handling fees from 4 to 1. Ryanair was also to receive 245,000 per year for cabin crew accommodation costs and 350,000 for pilots training. A European commission investigation was launched in 2002 following a complaint alleging that the subsidies Ryanair was receiving from Belgian state authority through Charlerois airport were not legal. While, at first, the Commission concluded that some of the aids given to Ryanair were not legal because they spawned from a private bilateral agreement and amounted to little else than a tax rebate, giving the airline an unfair advantage. However, the commission recognised the legality of
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few subsidies namely, marketing subsidies if these were limited in time (with a maximum of three years), amount and were to diminish over time154. That ruling left room for speculations regarding the continuity of Ryanairs business model. Without airport aids, the companys cash inflow would, in effect, be severely restricted. However, following an appeal by Ryanair155, a European Court of First Instance found that technicalities in the inquiry invalidated the judgment. The CFI especially pointed out the Commission reluctance to apply the private market investor principle. Following that ruling, the Commission decided not to appeal, leaving the case in a legal grey and giving full margins for Ryanair to demand subsidies from airports156. Later cases: in January 2010, the European Commission formally closed an investigation into Ryanairs deal with Bratislava airport. The inquiry had lasted two years and examined the legality of state-aids received by Ryanair from airport. Consistent with its liberalisation of European airspace logic, the Commission concluded that Ryanairs agreement with airports could be justified by a costbenefit analysis157. In sum, the Commission estimated that public airports had acted like market economy investors thus legitimising the fact that public airports could operate like private airports because it was rational to consider the deal as potentially beneficial for the management of the airport158. Other cases are still open regarding airports in Lubeck, Schonfeld, Tampere, Aarhus, Alghero, Po-Bern and Hahn but it could be speculated that the Bratislava decision will serve as a precedent on which the Commission will make further judgments.
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Air Scoops report Ryanairs business model 2011 available in French (November 2011) and in Spanish (January 2012) http://www.air-scoop.com/ http://www.bit.ly/FR2011
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References
1
See C. de Marken Computational Complexity of Air Travel Planning , ITA Software, http://www.demarcken.org/carl/papers/ITA-software-travel-complexity/img0.html 2 Ibid, depending on season and airline rules. 3 See, for example, http://www.motherboard.tv/2010/7/1/ryanair-completely-outdoes-itself-offers-verticalseating--2 , http://infoireland.wordpress.com/2010/04/07/ryanair-ups-checked-baggage-cost-to-e20/ 4 P. Malighetti, s. Paleari, R. Redonbi, Pricing strategies of low-cost airlines : The Ryanair case study , Journal of Air Transport Management, Vol. 15, 2009, pp. 195-203 5 Ryanair Annual Report 2009, p.54, found at http://www.ryanair.com/en/investor/download/2009 6 O. Koenigsberg, E. Muller & N.J. Vilcassim, easyJet pricing strategy : should low-fare airlines offer lastminute deals ? , Quantitative Marketing and Economics, 17 January 2008 7 P. Malighetti, s. Paleari, R. Redonbi, 2009, Op. Cit. 8 Ibid 9 http://www.bitterwallet.com/save-money-on-ryanair-fares-by-deleting-your-cookies/42133 10 http://www.tnooz.com/2011/04/12/news/why-ryanair-the-cookie-monster-is-just-an-urban-myth/ 11 See, http://www.oft.gov.uk/news-and-updates/press/2009/79-09 , for precisions on relevant regulation, see also, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:293:0003:0020:EN:PDF 12 http://www.ryanair.com/en/questions/what-is-covered-by-taxes-fees-and-charges-in-my-reservation
13
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel= pageExcise_InfoGuides&id=HMCE_CL_001170&propertyType=document 14 http://www.ryanair.com/en/questions/what-is-covered-by-taxes-fees-and-charges-in-my-reservation 15 http://www.developpement-durable.gouv.fr/Guide-de-la-taxe-de-l-Aviation.html 16 http://www.thisismoney.co.uk/bargains-and-rip-offs/article.html?in_article_id=418459&in_page_id=5 at the time of this writing, the Government Tax Refund Administration Fee is 20 per passenger per flight. 17 http://www.ryanair.com/en/questions/what-is-covered-by-taxes-fees-and-charges-in-my-reservation 18 http://www.ryanair.com/en/news/ryanair-announces-flight-and-job-cuts-at-dublin-airport and see http://www.dublinairport.com/at-airport/latest-news/080710.html for Dublin airports response 19 It seems worth adding that these charges may be waived on exceptional deals and promotional ticket offers. 20 http://www.ryanair.com/en/questions/what-is-covered-by-taxes-fees-and-charges-in-my-reservation 21 http://www.guardian.co.uk/business/2006/may/08/consumernews.money 22 S. Creaton, Ryanair, the full story of the controversial low-cost airline , 2009, Aurum Press Ltd, pp. 235-236 23 http://news.bbc.co.uk/2/hi/business/3443739.stm 24 http://www.telegraph.co.uk/travel/735151/Disabled-groups-attack-33p-Ryanair-levy.html 25 http://www.ryanair.com/en/questions/what-is-covered-by-taxes-fees-and-charges-in-my-reservation 26 http://www.ryanair.com/en/news/ryanair-to-introduce-eu261-compensation-levy-of-2-euro 27 http://www.dailymail.co.uk/news/article-1371634/Ryanair-impose-new-passenger-charge-pay-YOUR-rightcompensation.html 28 http://www.ryanair.com/en/news/gen-en-230108 29 http://www.telegraph.co.uk/travel/travelnews/4736024/Ryanair-to-remove-airport-check-in-desks.html 30 http://www.ryanair.com/en/news/ryanair-moves-to-web-check-in-only 31 http://www.guardian.co.uk/money/2010/feb/15/ryanair-costs-currency-conversion 32 http://www.guardian.co.uk/money/2010/feb/15/ryanair-costs-currency-conversion 33 http://www.timesonline.co.uk/tol/travel/news/article3976441.ece 34 http://goireland.about.com/od/travelingtoireland/qt/ryanair_priority_boarding.htm 35 http://www.airlinequality.com/Forum/priority_board_ryanair.htm 36 http://www.just4airlines.com/j4_dox/email/rss.mv?story_id=53036 37 http://www.ihateryanair.co.uk/ryanair-sms-booking-confirmation-scam/ 38 http://www.guardian.co.uk/money/2009/may/14/ryanair-online-check-in 39 http://www.ryanair.com/en/questions/table-of-fees 40 The only refundable parts of a ticket are government taxes but administration cost incurred by such refunds (typically UK Air Passenger Duty) are known to be higher than the tax itself. For more information on this see http://www.thisismoney.co.uk/bargains-and-rip-offs/article.html?in_article_id=418459&in_page_id=5 41 http://www.guardian.co.uk/money/2009/sep/06/ryanair-visa-check
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42
Conditions for this last charge are supple and subject to interpretation by the check-in attendant, depending on the situation, the charge may not always be applied. 43 http://www.ryanair.com/en/terms-and-conditions#regulations-tableoffees 44 http://oxforddictionaries.com/view/entry/m_en_gb0026760#m_en_gb0026760 45 http://news.bbc.co.uk/2/hi/7914542.stm 46 http://www.moodiereport.com/document.php?c_id=40&doc_id=28218 47 http://www.hotel-blogs.com/guillaume_thevenot/2009/01/exclusive-ryanair-chooses-bookingcom-as-theirhotel-partner.html 48 http://www.irishtimes.com/newspaper/ireland/2011/0701/1224299848294.html 49 http://www.guardian.co.uk/money/2011/sep/14/ryanair-launches-own-mastercard 50 http://www.dailymail.co.uk/news/article-2009120/easyJet-Ryanair-OFT-orders-travel-companies-drophidden-rip-surcharges.html 51 page 10 http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf
52
http://ryanair.maxroam.com/Home.aspx?lng=en&lngHeader=en&partner=SIMCARD&utm_source=ryanairGB& utm_medium=90x120btn&utm_campaign=simcards&cur=EUR http://www.prepaidmvno.com/2011/02/14/ryanair-launches-free-mobile-phone-roaming-service/ 53 http://www.dailymail.co.uk/news/article-2013223/Ryanair-drinking-water-12-times-expensive-supermarketThe-huge-mark-ups-budget-airlines.html 54 http://www.heraldscotland.com/news/home-news/ryanair-charged-ill-passenger-for-tea-and-biscuits-as-hefeared-heart-attack-1.1060542?localLinksEnabled=false 55 see photo on http://www.newswhip.ie/national-2/ryanair-is-now-the-airline-of-choice-for-prime-ministersand-ex-taoisigh-29421 http://www.ryanair.com/en/news/ryanair-and-cewe-develop-advertising-partnership 56 http://airportmarketingservices.com/pdfs/ratecard.pdf 57 http://www.ryanair.com/fr/careers/job/FROSE01 58 http://theairlineblog.blogspot.com/2009/06/buying-airplanes-ryanair-way.html and http://findarticles.com/p/articles/mi_qa5291/is_20080131/ai_n24392313/pg_2/?tag=content;col1 59 Siobhn Creaton, 2007, Op. Cit., p.212 60 http://www.lowcostportugal.net/viajar/aeroportos/exclusivo-entrevista-ao-ceo-da-ryanair-michael-olearyvideo/2011/09/ 61 See Ryanair Annual Report 2011, http://www.ryanair.com/doc/investor/2011/Annual_Report_2011_Final.pdf 62 Sir Stelios, CEO of EasyJet talking about Ryanairs point-to-point system, http://airobserver.wordpress.com/2009/09/29/stelios-tackles-ryanair-at-the-word-low-cost-airline-congress/ 63 http://www.ryanair.com/en/about 64 http://www.europeanceo.com/news/home/headlines/article489.html 65 See Channel 4 Broadcast, Ryanair Caught Napping as a part of the Dispatches series, first broadcast on th February,13 2006, accessible at http://www.youtube.com/watch?v=ZkKPirksymQ 66 http://www.smallbusinessvoodoo.com/1168/ryanair-when-customer-service-goes-down-the-toilet/ 67 http://goireland.about.com/od/travelingtoireland/qt/ryanair_priority_boarding.htm 68 http://www.airlinequality.com/Forum/priority_board_ryanair.htm 69 http://www.timesonline.co.uk/tol/news/world/ireland/article4641716.ece and http://extras.timesonline.co.uk/ryanair.pdf 70 http://airobserver.wordpress.com/2009/11/18/spanish-pilots-complain-about-ryanair-fuel-saving-practices/ and http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4641399.ece 71 Ryanair, Annual Report 2010, p. 54, http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf 72 http://www.independent.co.uk/news/world/europe/ryanair-ordered-to-pay-damages-for-reneging-on-freeflights-offer-to-millionth-customer-645902.html 73 http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000193311.pdf 74 http://www.alcudina.fr/L-avenir-de-Ryanair-dans-l-Extreme-Sud-appartient-aux-professionnels-dutourisme_a175.html 75 http://www.air-journal.fr/2010-04-16-ryanair-tente-un-coup-de-poker-en-ouvrant-une-ligne-depuis-parisvatry-53474.html http://www.reims.cci.fr/zoom/initiative/paris-vatry-cap-sur-oslo-et-stockholm-article20744.html
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http://www.uecna.eu/IMG/pdf/Contrat_CCI_Ryanair_English_version2.pdf http://www.whichbudget.com/blog/market-analysis/49-airlines/405-low-cost-carriers-european-subsidiesalghero-airport-case-study http://poitou-charentes.france3.fr/info/le-departement-de-charente-contre-ryanair-67530935.html http://www.midilibre.fr/2011/04/25/ryanair-ouvre-une-nouvelle-liaison-a-bas-cout-beziers-paris,309210.php http://www.observatoiredessubventions.com/2010/toutes-les-subventions-de-ryanair/ http://www.europe1.fr/International/Ryanair-La-liaison-Bruxelles-Figari-suspendue-301327/ http://www.charentelibre.fr/2011/01/26/la-rochelle-porto-la-cci-allongera-la-subvention,1018084.php http://www.lunion.presse.fr/article/marne/lagglomeration-devrait-verser-400-000-euros-a-ryanair-en-2011 http://www.lemonde.fr/economie/article/2011/02/16/l-aeroport-de-pau-dit-stop-aux-subventions-exigeespar-ryannair_1480857_3234.html http://www.liberation.fr/economie/0101652428-ryanair-fait-plier-l-indre-et-loire 76 http://www.aerobuzz.fr/spip.php?article636
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http://www.lavanguardia.com/20110727/54191763902/negociacion-conryanair.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+lavanguardia%2Falminu to+%28Lavanguardia.com+-+Al+minuto%29 http://www.expansion.com/muestra_foto_grande.html?foto=/imagenes/2010/12/21/empresastransporte/12 92886660_g_0.gif&alto=379&ancho=600&md5=db73f1ea0a87ae7f22f22568a36da7cf http://www.theolivepress.es/spain-news/2011/02/14/granada-say-no-to-ryanair/ http://www.granadahoy.com/article/granada/645792/quotlo/ha/hecho/ryanair/es/chantajear/las/institucione s/y/empresarios/la/ciudadquot.html http://www.hosteltur.com/fdb/191/lowcost.pdf http://www.travelweekly.co.uk/Articles/2010/04/01/33390/thomas-cook-threatens-canaries-cuts-overryanair-subsidy.html 78 http://economico.sapo.pt/noticias/ryanair-quer-transportar-17-milhoes-de-passageiros-parafaro_85168.html 79 http://www.whichbudget.com/blog/market-analysis/49-airlines/405-low-cost-carriers-european-subsidiesalghero-airport-case-study , http://lanuovasardegna.gelocal.it/dettaglio/la-sogeaal-senza-soldi-br-aumento-dicapitale-in-vista/1756426
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http://europa.eu/rapid/pressReleasesAction.do?reference=IP/04/157&format=HTML&aged=1&language=FR& guiLanguage=en 81 http://www.neurope.eu/articles/Ryanair-faces-new-subsidies-claim/42273.php http://presse.lufthansa.com/fileadmin/downloads/en/policy-brief/03_2010/LH-Policy-Brief-March-2010Ryanair.pdf 82 http://archive.maltatoday.com.mt/2010/04/04/t8.html 83 http://www.eubusiness.com/news-eu/ireland-slovakia.2fr/ 84 http://www.ouest-france.fr/actu/actuLocale_-Ryanair-relance-ses-lignes-Nantes-Marseille-et-BrestMarseille_39382-1887059------29019-aud_actu.Htm 85 http://www.liligo.co.uk/travel-blog/travel-news/2011/05/16/the-eu-wants-all-inclusive-airline-tickets-6015/ 86 http://www.thisismoney.co.uk/money/article-1366600/EU-orders-Ryanair-email-address-customerscomplain.html http://www.bloomberg.com/news/2011-03-16/eu-says-ryanair-needs-customer-e-mail-access-daily-mailreports.html
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91
http://www.lesoir.be/actualite/economie/2011-08-13/les-vraies-conditions-de-travail-chez-ryanair856459.php http://www.lesoir.be/debats/editos/2011-08-13/mais-qu-attend-ryanair-pour-voler-plus-haut-856457.php http://www.latribune.fr/entreprises-finance/services/transport-logistique/20110817trib000642885/lesincroyables-conditions-de-travail-chez-ryanair-une-fois-de-plus-denoncees.html 92 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:177:0006:0016:EN:PDF 93 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31996L0071:EN:HTML 94 http://www.alcudina.fr/L-avenir-de-Ryanair-dans-l-Extreme-Sud-appartient-aux-professionnels-dutourisme_a175.html 95 http://www.internationallawoffice.com/newsletters/detail.aspx?g=d7b9dca1-0bbe-4c8d-a9f3-65238dffb2f5 96 p. 109 http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf 97 p. 109 http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf 98 http://www.ryanair.com/en/news/ryanair-reaction-to-baa-appeal-on-monoply-break-up http://www.ryanair.com/en/news/ryanair-welcomes-competition-commission-s-decison http://www.telegraph.co.uk/travel/travelnews/8652931/Passengers-will-benefit-from-the-sale-ofStansted.html 99 http://www.independent.ie/business/irish/oleary-offers-euro350m-to-buy-a-terminal-at-dublin-airport2847946.html http://www.dublinairport.com/gns/at-the-airport/latest-news/10-11-19/Taoiseach_Opens_Terminal_2.aspx 100 http://www.thejournal.ie/ryanair-breaks-passenger-record-and-calls-for-an-end-to-travel-tax-192980Aug2011/ http://www.rte.ie/news/2011/0803/ryanair-business.html 101 http://www.ttgdigital.com/news/ryanair-rubbishes-european-commission-study/4681277.article 102 http://findarticles.com/p/articles/mi_qa5291/is_20080131/ai_n24392313/pg_3/?tag=content;col1 http://www.mirror.co.uk/news/top-stories/2011/07/06/ryanair-chief-michael-o-leary-on-business-fortuneand-family-115875-23249988/ 103 http://www.terminalu.com/travel-news/hacked-off-with-high-fares-rebekah-brooks-featured-in-ryanairscontroversial-ad/12352/ 104 http://www.dgmag.it/vacanze/ryanair-voli-low-cost-con-berlusconi-testimonial-35644 105 http://www.lefigaro.fr/politique/2008/01/28/01002-20080128ARTFIG00439-une-publicite-de-ryanairprovoque-la-colere-de-l-elysee.php 106 http://www.independent.ie/national-news/ryanair-chief-defiant-over-semtex-jibe-at-aer-rianta367526.html 107 hhttp://www.telegraph.co.uk/travel/weird-wide-world/7861374/Ryanair-boss-Michael-OLearys-funniestquotes-part-one.html 108 http://www.ryanair.com/en/news/ryanair-apologises-to-sir-stelios 109 http://www.dailymail.co.uk/travel/article-1263905/Ryanair-toilet-charges-phased-in.html 110 http://www.independent.ie/national-news/membership-of-milehigh-club-goes-on-offer-1414650.html
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http://www.google.com/hostednews/afp/article/ALeqM5grKz6f4UUJFa8mQIkANmqVkzFvmQ?docId=CNG.e38 6ba88e61d9632c4ea2054fcb81efb.471 112 http://www.quotidiendutourisme.com/site/transport-greves-ryanair-remercie-les-7-mercenaires-d-airfrance-61012.html 113 http://www.easa.europa.eu/ 114 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:315:0001:0165:EN:PDF http://easa.europa.eu/ws_prod/g/doc/Agency_Mesures/Certification_Spec/decision_ED_2003_19_RM.pdf 115 Ryanair, Annual Report 2010, http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf 116 Ibid, p. 56 117 Until January 2011, at which date Ryanair closed its base at the airport, see http://www.ryanair.com/en/news/ryanair-announces-closure-of-marseille-base 118 http://www.geae.com/aboutgeae/presscenter/services/services_20041101.html 119 Ibid, p. 64 120 http://www.finfacts.ie/irishfinancenews/article_1019060.shtml 121 http://www.ryanair.com/en/news/o-leary-invites-tanaiste-to-meet-on-300-jobs 122 http://www.ryanair.com/en/news/ireland-loses-ryanair-hangar-and-up-to-200-jobs-to-germany-andfrankfurt-hahn-airport
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123
See, Ryanair, Annual Report 2010, http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf 124 http://apps.scottishenterprise.com/SupplierDirectory/ViewSupplierInContext.aspx?SupplierGuid=5214793C-2FE5-47A0-B55F3CBBE4161269&displayID=104925 125 http://www.ryanair.com/en/careers/job/FREO309 126 http://news.bbc.co.uk/2/hi/uk_news/scotland/glasgow_and_west/8508429.stm 127 http://www.scottishbusinessgrants.gov.uk/rsa/files/AA%20Map%20-%20Extended.jpg 128 http://www.scottishbusinessgrants.gov.uk/rsa/189.166.167.html 129 http://www.companiesintheuk.co.uk/ltd/stansted-aircraft-maintenance-systems 130 http://www.ryanair.com/en/careers/job/FRESTNB2 131 http://www.bostonair.co.uk/news/ Boston Air also provides maintenance for Ryanair at other airports than Ryanairs bases. 132 http://www.aerospace-technology.com/contractors/maintenance/priority/ 133 As shown by its recruitment offers http://www.ryanair.com/en/careers/job/FREO409 134 Ryanair Annual Report 2009, Op. Cit., p.51 135 Page 3, http://www.elconfidencialdigital.com/images/HTMLText/Carta_Sindicatos-Ryanair.pdf 136 See J.R Allan, The Cost of Bird Strikes and Bird Strike Prevention (found at http://www.detectinc.com/downloads/Paper%20John%20Allan%20The%20Costs%20of%20Bird%20Strikes%20and%20Bird%20Str ike%20Prevention%207p%20BSC%202002.pdf ) and J.R Allan and A.P Orosz The Cost of Birdstrikes to Commercial Aviation, Bird Strike Committee Proceedings, 2001 Bird Strike Committee-USA/Canada, Third Annual Joint Meeting, Calgary, AB, 2001, University of Calgary, Lincoln (found at http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1001&context=birdstrike2001 ) 137 http://www.flightglobal.com/articles/2008/12/11/320045/detail-emerges-on-ryanair-birdstrike-accident-atrome.html 138 As illustrated by the way dedicated companies recommend the airline, http://www.activeholidays.lt/Stag_Weekends/Stag_Weekends_in_Vilnius/For_Ryanair_arrivals/ , http://www.thedogsbaltics.co.uk/flights.aspx 139 http://www.businessinsider.com/ryanair-sandwich-heart-attack-2011-8 140 http://www.guardian.co.uk/business/2007/feb/20/theairlineindustry.travel 141 http://ryanairdontcarecrew.blogspot.com/2011/05/ryanair-break-safety-issues-and-boeing.html 142 http://conversation.which.co.uk/consumer-rights/which-super-complaint-surcharges-submitted/ 143 http://www.dailymail.co.uk/news/article-2009120/easyJet-Ryanair-OFT-orders-travel-companies-drophidden-rip-surcharges.html 144 http://www.eleconomista.es/empresas-finanzas/noticias/3176649/06/11/FACUA-Rayanair-es-la-aerolineaque-mas-abusos-comete.html 145 https://www.facua.org/es/noticia.php?Id=6043 146 http://www.eleconomista.es/flash/noticias/3207947/07/11/El-juzgado-desestima-la-peticion-de-RyanairFacua-podra-seguir-criticando-.html 147 http://www.expansion.com/2011/05/08/empresas/transporte/1304891675.html 148 See http://www.telegraph.co.uk/finance/2947948/Ryanair-stung-by-fuel-hedge.html and http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5645152.ece 149 http://www.telegraph.co.uk/finance/newsbysector/transport/6840993/Ryanair-to-pay-dividend-afterBoeing-talks-fail.html 150 http://www.cne-gnc.be/index.php?m=151&n=1154 151 http://www.rtbf.be/info/economie/detail_la-cne-poursuivra-en-septembre-ryanair-et-crewlink?id=6605313 152 http://www.liberation.fr/economie/0101465289-subsidies-annulees-pour-ryanair-a-strasbourg 153 http://www.liberation.fr/economie/0101452891-ryanair-strasbourg-rappelle-air-france-a-la-rescousse 154 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004D0393:EN:NOT 155 http://www.independent.co.uk/news/business/news/new-fees-deal-with-charleroi-airport-gives-ryanairshares-a-lift-559923.html 156 http://www.air-scoop.com/pdf/Airports-report_low-cost-airlines.pdf ; http://192.124.238.248/fbpdf/dp052.pdf 157 http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/56&format=HTML&aged=0&language=EN 158 http://www.irishtimes.com/newspaper/finance/2010/0128/1224263291710.html
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