Ryanair in 2013

[sean1982]

next step ... listen to the staff as well

[sn26567]

Two days ago, MOL accepted to reply on Twitter to questions from the "audience". He was caught unaware of what would happen and it resulted in a spectacular crash-landing. I think it made him realise how far his conception of a low-cost airline was away from the public perception. The reading of this report in The Independent is enlightening:

http://www.independent.co.uk/news/uk/ho ... 95204.html

[sean1982]

Hmm ... I was wondering how long it would take before this article would show up here. Partly true .... but again the WHOLE twitter conversation has to be read in order to find out that a lot of comments in this article have been pulled out of context.

[Sai]

I'm not a MOL nor a Ryanair-fan, I actually never flew with them...but seriously How to answer such statements or sarcastic questions...From that moment you actually stop all two-way communication and there is no way to give a sensible reply imho. And if he finally replies in a sarcastic way too, everyone starts to point fingers at him. Pfff...media

[Inquirer]

I'm not a MOL nor a Ryanair-fan, I actually never flew with them...but seriously How to answer such statements or sarcastic questions...From that moment you actually stop all two-way communication and there is no way to give a sensible reply imho. Pfff...media

Yes, but it does show to what extend perception is determining people's attitude towards a certain business.

Whereas ryanair have long maintained they couldn't care less, they have had to learn the hard way that indeed it does box them fairly and squarely into a niche and that that niche isn't particularly the most interesting one to operate in, so they now want to outgrow it, just like most full service airlines are trying to "unservice" themselves in order to tap the much bigger middle market segment.

I have always felt the way forward for airlines on short haul in Europe is pretty much the Easyjet model, in which no frills are combined with frequency and flexibility and it seems that this is what most are now finally moving towards to.

I think Ryanair will have a very though time adapting to that model, just as legacies have (had) a very though time adapting to it, not because it is so complicated to do, but because of the perception they will always carry with them and which will haunt them forever.

Carriers like LH for instance have decided to even ditch their brand name to get rid of any perceptions no longer wanted (Germanwings), so I fear that if Ryanair is serious about all this, they may have no choice but to do the same and come up with another brand too, otherwise people will always think of any surcharges as a ripoff even if they are actually cheaper than similar surcharges from competitors, just like legacies suffer from the perception of always being more expensive, even if they can offer great all inclusive deals too.

And finally, yes, it should not be discarded that in such a repositioning and rebranding process, even a very outspoken CEO like Oleary may have to go just to show change had indeed come.

[sean1982]

Sorry but staying that FR is "just serving a niche" is quite ridiculous when they carry over 80 million pax a year and growing. If people would feel "ripped off" as so many of you are claiming here, they would simply not get those numbers. The simple truth is that the market is evolving and FR is adapting. Will they have difficulty with this? Possibly a few growing pains, but don't forget they are making money along the way while most legacies are losing hands full on their European network.

[fcw]

Two days ago, MOL accepted to reply on Twitter to questions from the "audience". He was caught unaware of what would happen and it resulted in a spectacular crash-landing.

One of the questions asked was: “Were you born an a******* or has it progressed throughout your life?”
Says it all!

The reading of this report in The Independent is enlightening:
http://www.independent.co.uk/news/ukl

Not exactly an objective article. here is another one WITH transcript of the tweets, read it and judge for yourself.
http://www.telegraph.co.uk/travel/trave ... itter.html

[Inquirer]

Sorry but staying that FR is "just serving a niche" is quite ridiculous when they carry over 80 million pax a year and growing.

No need to feel offended by the term niche.

The market segment served by your employer IS a niche in that it sets itself in the market with a set of clearly distinguishable product characteristics which only convenes a certain TYPE of passenger, so regardless the numbers, that does constitute a niche and one it is clearly trying to break out from.

[sean1982]

Why should I be offended? But what you are claiming is not true: we carry all sorts of passengers from business travelers to holiday makers to students who can hardly afford to fly and everything in between.

[fcw]

No need to feel offended by the term niche.

The market segment served by your employer IS a niche in that it sets itself in the market with a set of clearly distinguishable product characteristics which only convenes a certain TYPE of passenger, so regardless the numbers, that does constitute a niche and one it is clearly trying to break out from.

I do agree, niches can small or big.
To continue growing Fr has to expand their niche. The FR niche is the people who pay for their travel themselves. Some of these don't like the FR style and it is these ones who are targeted by the changes.
This move is definitely bad news for the BruAirs and easyJets of this world as FR is clearly trying to steal passegers from them.
I am willing to bet a 100€ that FR will transport 100 million passengers in four years from now.

[Inquirer]

I do agree, niches can small or big.
To continue growing Fr has to expand their niche.

Indeed, because in the end, let's step back and look at the big picture, shall we?

What is the total market of short haul passengers in Europe?
It will probably depend on exactly what definition you first agree on, but according to Eurostat, it was at 775M in 2012, yet Ryanair captures (merely) over 10% of that with a unique business concept which it refers to as ultra low costs, whereas the overwhelming portion of the rest of the market is shared between carriers which refer to themselves as say 'normal' low costs and network airlines, both of which are increasingly growing towards each other.

Ryanair indeed needs to move and needs to do so quickly, or the likes of Easyjet, Germanwings, Norwegian, vuelling etc will happily spit the much bigger portion of the total market amongst themselves, while Oleary remains stuck with his niche sized market share of the total market, especially if the general view of just a handful of airline(groups) surviving in the long run indeed materialises.
What's 80 million passengers is such a landscape?

Personally I think they are facing an uphill battle because they've started too late and have to get rid of a very negative public perception first, but that's just my opinion.

[sean1982]

"Only 10% of the European market"? How many airlines are there in Europe? How many can claim to have 10% of the market? That is the big picture! Even if FR fails to climb out of your perceived niche, they will still be making half a billion Euro profit a year. That is the big picture

[sn26567]

In today's Twitter continuation (transcript here: http://www.telegraph.co.uk/travel/trave ... pened.html) MOL reveals that his favourite airport is Charleroi's "great new terminal".

[Inquirer]

"Only 10% of the European market"? How many airlines are there in Europe? How many can claim to have 10% of the market? That is the big picture! Even if FR fails to climb out of your perceived niche, they will still be making half a billion Euro profit a year. That is the big picture

If you are not open to the fact that holding roughly 10% of the total market through a very unique product does indeed constitute a market niche then there's no use discussing anything here really.
It seems however your management has seen the big picture and starts to acts accordingly; now all it needs to do is to explain it to their staff, it seems, because indeed you have to stop being a niche player to be sustainably successful in 10 - 20 years from now, a strategic horizon ordinary employees are not supposed to be worried by, but which should be and is very much on the mind of senior management indeed.

[sean1982]

You keep circumventing the fact that the issue is not how much of the market FR is holding, but between how many is the other 90% shared. The "niche" is not going to disappear. In 20 years people will still want to fly cheap.

And this is coming from an "ordinary" employee, not sure what makes you less ordinary then the rest?

[Sai]

MOL reveals that his favourite airport is Charleroi's "great new terminal".

Sorry to go a bit off topic. But are there visual renderings or images or info of the plans of CRL's new terminal somewhere?

[sean1982]

I think he means the current terminal?

[cnc]

"Only 10% of the European market"? How many airlines are there in Europe? How many can claim to have 10% of the market? That is the big picture! Even if FR fails to climb out of your perceived niche, they will still be making half a billion Euro profit a year. That is the big picture

you have your point but stop that crap about FR making a profit! operational "profit" is a 300 million loss! the profit is tax money from all over europe. if somehow that comes to a halt your beloved FR is in more trouble then most legacy carriers

[sean1982]

I would suggest you would stop playing that broken record over and over again ... if you want too look at it like that fine ... but then please subtract ALL tax money from ALL carriers will ya!

[cathay belgium]

Hi,

you have your point but stop that crap about FR making a profit! operational "profit" is a 300 million loss! the profit is tax money from all over europe. if somehow that comes to a halt your beloved FR is in more trouble then most legacy carriers

Very true indeed, but it isn't and as long as nobody reacts.. FR is very succesful

Just another way of seeking/earning money... like selling bustickets..

euh Metallica... maybe... Sad but True !

CXB