Ryanair in 2015

[RoMax]

Ryanair will fly from Lelystad airport.
It is the biggest general aviation airport in the Netherlands and the runway is 1250mt long.

http://fd.nl/ondernemen/1088585/ryanair ... f-lelystad

I can't read the whole article, but when are they planning these flights? Because Lelystad will expand the runway and after that add 'real' terminal facilities, it's intended to become a secondary airport for Amsterdam (with the intention to keep as much point-to-point leisure traffic in Lelystad to relieve AMS for hub traffic). With FR hinting at a base at AMS but complaining at the high prices, it could be logical for them to go to Lelystad once it opens as a real commercial airport (from the current users of AMS no one actually wants to move for obvious reasons).

I just found the story on luchtvaartnieuws.nl so I'll answer my own questions.

FR wants to serve both AMS and Lelystad, from AMS they want to serve business destinations (naming London, Dublin but also e.g. routes to Eastern Europe) while leisure destinations will be served from Lelystad. It will take until 2018 before they can serve Lelystad (because the airport is not ready for these operations yet), but they don't want to wait that long before starting to serve the Amsterdam-region, so they'll launch AMS first. Not this year, it's not such a high priority (and at AMS they still face the problem of too high fees and slot restrictions of the H pier (LCC) which they want to use. So 2016 is more probable.

Meanwhile they confirm their focus at Eindhoven, where they expect 2 million pax this year (+7% compared to 2014). One extra based aircraft this year (up to 3) and 5 new destinations (up to 36). Eindhoven will see 145 weekly FR flights this summer.

[Passenger]

Ryanair will fly from Lelystad airport.
http://fd.nl/ondernemen/1088585/ryanair ... f-lelystad

Lelystad, right… Lelystad Airport is part of the Schiphol Group. Some months ago, they’ve asked all their low cost / low budget / charter airlines if they’re willing to move to the cheaper Lelystad Airport when that airport will be ready for business (Lelystad’s runway is 1.250m now). All Dutch carriers told Schiphol that they’re not happy to move to Lelystad and they prefer to stay at the more expensive AMS Schiphol. Could be that they just say so to get better conditions if they move to Lelystad – we’ll see in 2017/2018.



Tender for the “new” Lelystad Airport is ongoing at this very moment (and closes on 16/02/2015). Runway extension to 2.700m plus new taxiway plus new apron plus new roads plus new parkings. End of all works: April 2018 (thus before the new Berlin…).
http://www.lelystadairport.nl/Nieuws/Ac ... &newsId=81

Conclusion: it’s obvious that the press release “Ryanair will fly from Lelystad” is only ment for shareholders, who kick on companies with expansion plans. Same applies for the “Ryanair will fly from AMS” headline. One hour after such press release, the share price soars. However, once details are asked by specialized press, Ryanair admits that plans for AMS are put on hold for 2015, and they say “probably as from 2016, and only if we get good slots, if we can do a 25 min turnaround, if we get access to the H Pier, etc”.

Perhaps Ryanair cancelled its AMS plan because of their bad experience at BRU??? Ryanair expected a walkover here, and I remember that our inhouse nitwit gave Brussels Airlines six months to bankruptcy, once when Ryanair had started from BRU. However, Brussels Airlines and Jetairfly reacted in a way Ryanair never believed they could do: with competitive fares. Sure, Ryanair will have a decent load factor. But what’s their yield? Can't be that high as in Charleroi, given the direct competition from Jetairfly, Brussels Airlines, EasyJet, Corendon, ...

I'm looking forward to the price war at AMS, where KLM and Transavia will gladly accept the challenge...

[RoMax]

Perhaps Ryanair cancelled its AMS plan because of their bad experience at BRU???

For sure they didn't cancel their AMS plans. As said in my previous message here, they want to fly from both AMS and Lelystad, from AMS to business destinations like London, Dublin, etc. and from Lelystad to leisure destinations.

[sean1982]

In the exact same manier they intend BRU and CRL to work.

[airazurxtror]

However, Brussels Airlines and Jetairfly reacted in a way Ryanair never believed they could do: with competitive fares. Sure, Ryanair will have a decent load factor. But what’s their yield?

The customers of Brussels Airlines and Jetairfly should thank Ryanair for having forced these companies to lower their fares to a roughly competitive level.
But one could also ask : what is their yield ?

[Inquirer]

Just a question about this airport: why was it ever built in the first place?
Having such a small runway means it can't possibly have been of great commercial use so far, so what were the original plans with it, when the land of this Dutch province was reclaimed on the sea?

[Stij]

In the exact same manier they intend BRU and CRL to work.

and CIA and FCO (which I never understood as CIA is actually closer to Rome than FCO...)
and Glasgow / Prestwick

Cheers,

Stij

[Inquirer]

I think they first need to redo some of their homework; the example at BRU has obvioulsy learnt them that the upscale market isn't as eagerly waiting for something as basic as their product still is as they had hoped.

Sure, they can pull it off on price alone on high demand routes with softer profiles like Rome, Barcelona, Lisbon, Dublin etc, but they clearly are not ready yet for the hardcore business routes like GVA, LIN, ZRH, OSL etc, which is also the reason why we aren't hearing much of their much debated massive expansion plans at BRU towards those kind of destinations any longer, despite those being exactly the kind of routes which would open up a whole set of new customers to them: they most certainly understand very well they can just as well serve any route with a softer profile from their secondary airports at much lower prices (and who knows also higher yields even), which may be why they apparently aren't even interested in adding as many new summer routes as they did last year at BRU, this spring.

I already said it a few times before: what they try to do they should do through a seperate brand, because their ryanair brand carries with it a negative reputation (even an explicit travel ban at many multinationals), their plane size may be too big to go to the needed trice daily frequencies on many of these kind of pure business routes (it's not for nothing easyjet operates with smaller planes) and their product flexibility and comfort is still way too basic for it to be of any value to real corporate travelers, yet they can't change all of that in order to suit a lucrative upscale market as good as say an easyjet, without increasing their total costs and thus opening up a void at the low end which will be happily filled by others then (genre Wizzair for instance).
It's logical: there's only so much you can do with 1 brand really, which is why all multinationals -be it airlines, car manufacturers, or consumer good companies- always have several brands to span the entire market range: a skoda is not an audi.

[airazurxtror]

and CIA and FCO (which I never understood as CIA is actually closer to Rome than FCO...)

Right, Stij - but Ciampino, although closer, has no rail link with the city center; a bus can take 45 min or more to arrive at Termini (there are sure to be traffic jams in the rush hours). You can take a bus to the metro end station Anagnina or to the FS station at Ciampino, but you don't gain much time that way.
Whereas at Fiumicino, besides the bus lines, there is the Leonardo Express to Termini and the regional train to Ostiense, Trastevere, Tiburtina, etc.
Ciampino is perfect when arriving there (one can get out of it in a few minutes) but it's no fun waiting there for a flight - the terminal is really basic ! Moreover, there were talks of closing it to civil traffic, as it is enclosed on three sides in a growing populated area.

[sn26567]

However, Brussels Airlines and Jetairfly reacted in a way Ryanair never believed they could do: with competitive fares. Sure, Ryanair will have a decent load factor. But what’s their yield?

I was just wondering the same. I just booked a few flights from BRU on FR (which I wouldn't have booked if prices hadn't been as low). I paid between 10 and 18 euros for a single fare, which is much less than what FR pays as airport taxes. Hence, the yield can only be negative and each additional customer at that price means an additional loss for Ryanair.

I fail to understand the logic of the Ryanair bean counters...

[Inquirer]

Because they see it as an entry ticket only, after which they hope (and know from statistical evidence) the average passenger will spend more money on additional things like extra fees due to their complex processes, on luggages, on drinks and food, on car leases or bus tickets etc?
I am sure the aim is not that you fly at an operating loss and spend not a cent while doing so.

[Stij]

Just booked a round trip for a trade fair in Verona in September and paid 27,5€ (outbound) and 35€ (inbound) per leg, 62,5 in total. SN was at 130€...
So, outbound, just the taxes...
Don't know the taxes in VRN...

I almost never check-in bags and almost never buy something on board, so I'm a loss!

Cheers,

Stij

[Inquirer]

Didn't know anybody else flew to Verona from BRU even?
Another revenue source may be regional subsidies, tied to volumetric parameters, maybe?

[Flanker2]

It doesn't quite always work like that Inquirer.
Sure, they try to make money with ancillaries, etc, but I don't think that FR would have to come to BRU to do that.

FR is going after market share.
When you go after market share, selling part of the capacity below cost is a form of investment.
For every pax that takes a FR flight, Ryanair loses let's say 30 Euro's. But their competitor loses 150 euro's.
As the departure date approaches, the fares gradually increase. Competitors will have to price their tickets even higher in an attempt to make up for the lower load factors as FR snapped the lower yield early bookings. FR can then also increase their fares into positive yields and make up for the money lost on the early bookings and probably get close to break even average yields.

I'm surprised that FR has remained idle though.
They could have expanded their operations even more in 2015, but haven't announced anything yet.
Perhaps they are anticipating a collapse in demand and/or a VY retreat?

[Kapitein]

Didn't know anybody else flew to Verona from BRU even?

Air Dolimiti flew it several years ago with CRJ-200 and ATR-42/72.
FR will have a pressconference next month in BRU.
BTW, FR is very happy in BRU

[airazurxtror]

I'm surprised that FR has remained idle though.
They could have expanded their operations even more in 2015, but haven't announced anything yet.
Perhaps they are anticipating a collapse in demand and/or a VY retreat?

They are short on aircraft; only 15 new 737-800 due this year and 36 next year.

http://www.jethros.org.uk/fleets/fleet_ ... yanair.htm

[Stij]

Air Dolimiti flew it several years ago with CRJ-200 and ATR-42/72.

And a loooong time ago Sabena flew it as well!

Cheers,

Stij

[Inquirer]

FR is going after market share.
When you go after market share, selling part of the capacity below cost is a form of investment.
For every pax that takes a FR flight, Ryanair loses let's say 30 Euro's.
But their competitor loses 150 euro's.

Yet the issue I have with that theory here is they have no competitor on the Verona route mentioned for instance, so at least there, the theory doesn't hold much ground.
On top of that, buying market share in a volatile market, is mostly money wasted.
If next time they are twice as expensive, will André fly them again, or simply stay home for his bargain day trip to Italy? That ticket was no money lost for any competitor at all and in fact it's no profitable customer gained for them in the long run either, IMHO, something they know too.
It's just done because they want to push the capacity in the market, meaning they found themselves well ahead of the demand curve, hence them not expanding much further over winter, contrary to the popular expectations, as the aim is not to lose even more money than they already do over the quiet periods here.

Competitors will have to price their tickets even higher in an attempt to make up for the lower load factors as FR snapped the lower yield early bookings. FR can then also increase their fares into positive yields and make up for the money lost on the early bookings and probably get close to break even average yields.

Yet it seems to me that their competitors arent suffering from lower volumes at all, so the aim of simply buying customers from competitors through lower prices seem to be failing.
Much to their surprise probably, they are attracting predominantly customers who'd not have flown at all from BRU otherwise and they are doing so often at below cost prices even in the off peak periods, like for instance André.
The reason for this is the fact competitors seem to have done exactly the opposite of what you say they do: they have significantly lowered their prices, increased their capacity (by more seats and/or more frequencies even) and somewhat surprisingly to many, they have massively grown while doing so!
The fact the market reality doesn't seem to match very well with the textbook theory, may be the main reason why their much debated rapid expansion at BRU has been put on hold this winter and I think it may may be pretty modest next summer too, compared to last year. My bet it will be fewer new routes, started during high peak season only to avoid being caught in the same situation as they were last year, which is why any official announcement of it can come later than the rest.

Would also be interesting to know how Vueling has been doing over summer in fact: I think they may be the real victim of all this as they are the smallest, and were largely unestablished on most routes offered.
In this context, it's interesting they seem to be cutting on a few routes where they have competition, and focus on routes where they have less competition, a strategy which may not be such a bad idea, not only to them, btw; the untapped market is probably big enough for more than 1 airline in BRU, so why try to kill eachother on just a handful of identical routes???

Definitely interesting to follow up on, that's for sure.

[Inquirer]

Air Dolimiti flew it several years ago with CRJ-200 and ATR-42/72.

And a loooong time ago Sabena flew it as well!

Cheers,

Stij

That's possible, yet you said you had a price quote of 130 euro from Brussels for September?
Can't find their flights to Verona even???
So now I am confused.

[Stij]

Hi Inquirer,

I understand! I'm sorry, I confused you! That was to VCE!!!

To me, all three airports (VCE, TSF and VRN) are almost equivalent as most of my business trips are to the Veneto region in general and not to the city centers, so I see them as alternatives.

Cheers,

Stij