Ryanair in 2014

[flightlover]

The only thing I can tell you for sure is that when it's Ryanair, it's all over the news much sooner than the rest. Journalists are supposed to be impartial, but it's all plain politics as usual. Crews and staff aren't as attached to Ryanair, so they'll be much quicker to spread the word about each and every single incident.
Despite that, I find that it's relatively quiet relative to the size of their operation.

There can be multiple reasons for the lack off news about Ryanair's mishaps. And not only for Ryanair but every company out there.

The obvious one being the best scenario: There is nothing to tell. Good on them, that's how it should be.

The second one being there is something to tell but no one is willing to spill the beans. Not willing to be fired and most likely being excluded from that particular industry.

So, although they are less attached to Ryanair, as you claim, they might as well don't dare to stand up and get burned. In this case they will start looking for another job. Or stay put and see it as a lack of standard and mock with it. The latter option is least preferred though, as this inevitably will bring risks to daily operations.

Remember: I'm NOT saying there is a problem at Ryanair.

[RTM]

Flanker, don't you get tired of yourself...?
The only one embarrasing himself is you, so don't try to make anyone believe it is Tolipenebas...

I can go on and on throwing your last post in your face bit by bit, but I am not going to. I will stick with just one...

I think that there is a faster, much more obvious option in the above described scenario, and it's a bit concerning that a pilot wouldn't mention it instinctively... it's called the DC pump.

My 737 experience is VERY limited, but,... a DC pump...? Really...? Please enlighten me...

[Desert Rat]

APU DC fuel pump?

[Inquirer]

Ryanair issued its first ever bonds yesterday, raising €850m (£687m) to help finance its order for 180 new Boeing planes.
The seven-year, euro-denominated bonds were eight times oversubscribed.
Chief financial officer Howard Millar said the bonds, which would pay holders 1.875 per cent, offered the firm a significant discount to financing costs from other sources of around 3.8 per cent.
“This is way ahead of anyone else. It’s a significant competitive advantage,” Millar told Reuters yesterday.

A competitive advantage, yes and no. Depends who you benchmark with.

Thanks to its high profitmargins, ryanair has a good rating with the agencies and can thus issue bonds at low interest rates, which is indeed an advantage.

BUT,

due to its low cost and regional business model, ryanair is having a very low annual turnover for the size of the company, which means they do not have the option to draw several hundred million -let alone close to a billion- from their own cashflow, like other companies can do.

Ryanair's turnover is just over 4BN, whereas that of IAG is over 18BN and that of LH even over 30BN to give some numbers. Needless to say the latter ones can thus more easily consider to revert to internal funding sources, and thus effectively pay close to zero interest, than ryanair.

[Flanker2]

Flanker, don't you get tired of yourself...?
The only one embarrasing himself is you, so don't try to make anyone believe it is Tolipenebas...

I can go on and on throwing your last post in your face bit by bit, but I am not going to. I will stick with just one...

Flanker2 wrote:
I think that there is a faster, much more obvious option in the above described scenario, and it's a bit concerning that a pilot wouldn't mention it instinctively... it's called the DC pump.


My 737 experience is VERY limited, but,... a DC pump...? Really...? Please enlighten me...

You need to take a lesson in irony and to finally admit that people here know what they're talking about.
Obviously the B737 doesn't have DC hydraulics, so it's as useful as the APU in this particular case. Still, I would've prefered a DC pump answer as many aircraft types offer this option.

As Sean and I have already pointed out numerous times, in the case of the B737 it's useless to have someone in the cockpit in the case that your accumulators are depleted and the aircraft starts moving, when parking brakes are supposed to hold for 8 hours minimum. If you're determined to do something about it, it would be more useful to send them out to find a set of chocks or building material such as wood or larger bricks to use instead of chocks.

Are you going to put someone in the cockpit 24/7 just to make sure that if a fire starts when it's parked, there is someone to put it out? That happens quite often: just ask ET or more recently SU and they're poised to make a lot more damage than a plane rolling its elevator into a building.
Over the years, dozens of aircraft have been lost in ramp fires, costing the industry hundreds of millions if not billions of dollars, that one wonders if it's not cheaper for insurance companies to pay people to sit in them when they're parked unattended?
After all, isn't it crazy to leave an aircraft costing hundreds of millions, full of flammable materials unattended on the ramp, without fire monitoring possible from outside the aircraft?

[RTM]

Don't change the subject... again...
The aircraft wasn't on fire, period.

The rest is just a liability issue. Boeing pulled the umbrella bij stating you can't leave the aircraft unattended in this case if no chocks are available. The crew should have made sure someone was in the cockpit, ideally with electrical power on the aircraft, and since no ground handling was available I guess a GPU wasn't available either, so the APU should have been running. Someone with half a brain cell would have known this is what Tolepanebas meant. There is no discussion that it is very unpractical for the crew to stay in the cockpit. Nobody wants to do that, and it screws up the duty times, but that is no reason to walk away from your responsibility. Probably someone from maintenance should/would have to take over, if available.

The other scenario, where chocks were in place, but later removed bij striking personell... Wel then it is a simple case... That is vandalism, and in fact a criminal act. No blame on the crew in that case. But according FR's Jack of all trades, "CHOCKS WERE NOT AVAILABLE", su I guess that that wasn't the case.

[sean1982]

Thanks for the sarcasm RTM. I can understand that in Belgium it is frowned upon when somebody does more then one job. People are not really used to multi-task here. Unions don't like it, hence the cost structure is much higher.

Yes I am a purser and I am an instructor and I am an examiner and I am involved in the safety department.

[flightlover]

Thanks for the sarcasm RTM. I can understand that in Belgium it is frowned upon when somebody does more then one job. People are not really used to multi-task here. Unions don't like it, hence the cost structure is much higher.

Yes I am a purser and I am an instructor and I am an examiner and I am involved in the safety department.

How long has it been since you where in Belgium? The time that workers had to do just one job is making a fast exit these days. Especially at the airport. Everything has to be done with less people and for lower wages. It is no coincidence there are more strikes at the airport.

[sean1982]

RTM doesn't seem to find that normal. There's no reason why flexibility should lead to a strike (at least at FR), for every extra I do I get a premium.

[RTM]

FWIW, I admire people that work multiple jobs to provide for a decent living. Your functions are covered by one job however.
But it wasn't what I meant anyway. But lets leave it at that, I appologize.

[Lysexpat]

The crew should have made sure someone was in the cockpit, ideally with electrical power on the aircraft, and since no ground handling was available I guess a GPU wasn't available either, so the APU should have been running. Someone with half a brain cell would have known this is what Tolepanebas meant.
The other scenario, where chocks were in place, but later removed bij striking personell... Wel then it is a simple case... That is vandalism, and in fact a criminal act. No blame on the crew in that case. But according FR's Jack of all trades, "CHOCKS WERE NOT AVAILABLE", su I guess that that wasn't the case.

Maybe it is better to wait for the outcome of the investigation.
We don't know if the crew left the aircraft without a handover to engineers nor if chocks were in place when they left.
Also, although it is not done to leave an unchocked aeroplane unattended, the only thing Sean was trying to point out is that: even if it was, according to the manual full brake oressure should have been available for at least eight hours. So if the accident happened within eight hours something additional went wrong.
In the mean time it is a bit too early to shoot the FR crew down in flames, unfortunately this seems to be the only intention of some members of this forum.

[Lysexpat]

Chief financial officer Howard Millar said the bonds, which would pay holders 1.875 per cent, offered the firm a significant discount to financing costs from other sources of around 3.8 per cent.

A competitive advantage, yes and no. Depends who you benchmark with.
due to its low cost and regional business model, ryanair is having a very low annual turnover for the size of the company, which means they do not have the option to draw several hundred million -let alone close to a billion- from their own cashflow, like other companies can do.
Ryanair's turnover is just over 4BN, whereas that of IAG is over 18BN and that of LH even over 30BN to give some numbers. Needless to say the latter ones can thus more easily consider to revert to internal funding sources, and thus effectively pay close to zero interest, than ryanair.

FR is the highest rated airline wordlwide according Standard & Poor's and Fitch, so no need to doubt about the benchmarking .
I fail to understand how you can make this look bad. Do you think there is a single airline in the world which is able to self fund its entire fleet?
I do know a couple of airlines who are unable to secure loans with any bank at any rate though. They can only afford to lease older and less performant aeroplanes. When these airlines post a loss you even call that good news.
Could it be possible you have a hidden agenda?

[Inquirer]

FR is the highest rated airline wordlwide according Standard & Poor's and Fitch, so no need to doubt about the benchmarking .

I am not talking about the rating, but about the conclusion this is a significant commercial advantage.
Like I've said, it is depending on who you compare to, because as I have tried to explain, some airlines for instance can get money at zero interest rates so to say by taking it straight from their much higher cash flows, an option which is by far more limited to Ryanair due to their ultra low fare model and thus also their relatively low annual turn around, despite the volume of their business.
It's just simple and objective accounting, really.

Could it be possible you have a hidden agenda?

If trying to make clear much of the naive financial doom and gloom we read overhere in oneliners copy-pasted straight from commercial press releases is often far less clear cut when you look at it more closely, is having an agenda, then yes.
Other than that, no.

But please understand the competitive aspect of a BBB+ rating is fairly relative, especially as most direct competitors are very closely rated too (just one or two notches) or with access to even less costly financing options, be it from much larger cash flow volumes than Ryanair or the right to issue government backed bonds even.

[Flanker2]

Leave aside the hidden agenda, let's look at the coherence of your arguments.

Inquirer, when you compare FR leasing its aircraft or funding a purchase through bonds, it doesn't matter what the total revenues of the company are.

What matters is how much cash flow you have and what your margins are.
All the big airlines you talk about have huge revenues but they also have huge costs, hence lower margins than Ryanair. Longhaul operations just work like that.
But at the end of the year, they can be happy if they have the same cash flow to revenue ratio as FR, I doubt any company comes near at all.
The fact that they have lower fares does give the impression that they have less cash flow, but thanks to their big margins, it's not the case.

When you can pick up funding at rates similar to average inflation as FR did, FR's financial cost of borrowing the money is almost free. I don't think that there are any airlines in the world that can claim such a luxury and that is part of why FR can offer such low fares to its customers.

BA and LH are also borrowing huge amounts of money to fund their operations. Those funds don't come from within, they are from financial institutions and they're not cheap.
Sure they also have money from advance bookings, but payments on widebodies are much more expensive too and airlines also have to pay huge deposits years in advance for aircraft purchases.
One more issue for airlines such as BA and LH is that many of their high revenues come from corporations that pay the services short before or after they are offered, while Ryanair pax book quite early in advance.

Interesting thought but I'm afraid it's not that black and white.
Fact is, if you can pick up funds from outside at very low rates, then you do that.
It's not the first time that FR picks up money on the market: http://www.independent.ie/business/iris ... 97061.html

I've also said since long that SN should have done this instead of continuing to make the lessors richer. If their Airbus aircraft were funded at start-up, those they have since the beginning would be fully paid by now, and could be making the difference between profitable or not.

[Inquirer]

Inquirer, when you compare FR leasing its aircraft or funding a purchase through bonds, it doesn't matter what the total revenues of the company are. What matters is how much cash flow you have and what your margins are.

Actually it's a bit of both IMHO, because what is important is the ratio of cash flow vs annual turn-over in fact, as that gives you an idea how much margin there is to take part of that cash flow out as a free loan.

When you can pick up funding at rates similar to average inflation as FR did, FR's financial cost of borrowing the money is almost free.

Yet is this such a unique competitive advantage as they claim?
For that, it's good to see who that competitor is they claim the advantage over.
If they compare to say a virtual start-up competitor, then yes indeed, they are right because that one won't have access to the same kind of funding in that case, but it's not really very relevant of course.
If they compare to existing direct competitors like Easyjet however, the difference becomes virtually non-existent because they have similar bond market access too already.
And to make the irrelevance of it all even more obvious, if I dare to compare to say Air Berlin, the advantage becomes a disadvantage even because these guys happen to have access to zero interest rate funding from their shareholder Etihad, which in itself is -as we all know- the United Arab Emitate itself (rated at AA, btw), something which Alitalia will be able to enjoy soon too, if the take-over is let to go through by the EU! Can you imagine that?
I personally think the EU must stop all this from happening, because as I am sure you'll agree, it's highly market distorting if companies like Alitalia are let to have a financial upper hand on healthy European competitors through foreign funding.

So to conclude and as you say yourself: things aren't as black and white as simply comparing a rating or an interest rate paid on bonds.

FWIW- Ryanair has made it a habit of sneaking financial claims into their PR, claims which are widely picked up by people who take them all for true without really understanding the full (ir)relevance of the claim and in many cases, there is even a fair bit of mental flexibility needed to accept the claim as true in itself already, something not always understood very well by those same enthusiasts either.

[Flanker2]

Most airlines or even corporations pay 5-10% on their loans.
LH's last bond issue dates from 2009(about the worst moment to pick up money on the market ) and they're paying 6.5% on that, even though the yields on those notes are quite a bit lower.

1.8% is quite exceptional for a corporation, given the underlying risk.
It is lower than government bonds, so...

If U2 issues bonds, IMO they will be at least 2.5%.
Easyjet is doing ok now, but they have had their share of ups and downs.

I think that SN would have had no problem picking up money on the open market if it were in better shape.
Belgium's ridiculously low bank interest rates would have made sure that individuals and funds would have picked them up, even at rates of 3%. It's a borrower's market and when that ends we'll see our next crisis, this time with a property bubble bursting in Europe.
If you look at the going price of stapled brick nowadays... it's almost too ridiculous.

[Inquirer]

Most airlines or even corporations pay 5-10% on their loans.

As said: that airlines can't make it up higher on the rating scales than triple B is indicative of the weakness of this economic sector throughout. Luckily the financial market is depresses, so even with lower lmedium grades like Ryanair's interest rates like those are something of the past for now.

At the end of the year, they can be happy if they have the same cash flow to revenue ratio as FR.
The fact that they have lower fares does give the impression that they have less cash flow, but thanks to their big margins, it's not the case.

Ive bothered checking these 2 claims: In 2013 free cash flow stood at 2,375BN for LH to continue using the same example, with a ratio to turnover of 8 percent. In contrast, for Ryanair, that same ratio is 19%, but the nominal cash flow itself is only 828M due to the low turnover.

It's a borrower's market.

I entirely agree, but didn't you say you were calling for such a thing long ago?
I hope not in 2009 (or soon after), because then your remark about the LH bond at 6,5% would have to be directed towards yourself too and it would have been a fairly stupid idea in hindsight.

[Lysexpat]

Inquirer, I must admit being lost here, once again your financial knowledge is outstanding and the lesson is well appreciated.
I do hope your view in this matter is unbiased though, as when you are on my domain your views are always heavily biased against Ryanair. (Rant over and I don't work for Ryanair by the way.)

[sean1982]

I do hope your view in this matter is unbiased though, as when you are on my domain your views are always heavily biased against Ryanair. (Rant over and I don't work for Ryanair by the way.)

Idle hope

[sean1982]

RYANAIR LAUNCHES RYANAIR FAMILY EXTRA

Ryanair, Europe’s favourite low cost airline, today (17 June) unveiled its new family product, Ryanair Family Extra, offering families a range of discounts on travel and an improved service on Ryanair flights.

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