Cracks in Ryanair’s lowest cost model

By Bjorn Fehrm

September 27, 2016, ©. Leeham Co: Ryanair has canceled 2,000 flight over the last few weeks. The background is a lack of pilots, after a change of holiday accounting period.

The cancellations come against a backdrop of pilots leaving for other companies (notably Norwegian) and an EU ruling in favor of Ryanair’s flight crews.

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2017, a tougher year for European airlines?

By Bjorn Fehrm

January 5, 2017, ©. Leeham Co: The last two years have seen increased profits for the airline industry. Lower priced fuel gave the industry time to breath and to finally earn a reasonable Return on Invested Capital (ROIC).

Earnings as a percent of revenue for the industry has been increasing from 5% on a worldwide basis in 2014 to around 10% for 2016, Figure 1.

Figure 1. Airline industry profits. Source; IATA presentation October 2016.

The US and European airlines have been topping the earnings with 18% on revenue for the third quarter of 2016. There are many signs this will not continue in 2017, especially for European airlines. Read more

11th 737 MAX on the assembly line as Boeing gears up for delivery next year

Oct. 11, 2016, © Leeham Co.: The 11th 737-8 MAX is already on the Boeing production line at the factory in Renton (WA).

Southwest Airlines will receive the first 737 MAX next year. Boeing photo.

Southwest Airlines will receive the first 737 MAX next year. Boeing photo.

This one is for Lion Air, the Indonesian Low Cost Carrier that’s ordered 201 of the airplanes.

Previous 737-8s that already are built are also for LCCs Southwest Airlines of the USA.

The initial line up of customers scheduled to receive the MAXes next year is in stark contrast to decades ago when the names on the sides of the airplanes would be American, United, Lufthansa or Japan Air Lines. It’s illustrative to the changing airline industry.

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Ryanair: from 17 clicks to 5, we are changing

By Bjorn Fehrm 

20 Jan 2015: On the second day of Growth Frontiers 2015 conference in Dublin, Ryanair former CFO, now Board Member Howard Millar, told us about a changed company.

“Ryanair is today the largest airline in Europe with 82 million passengers carried during Fiscal Year 2014 (April 2013 to March 2014). Growth is at record level and RyanAir is planning to grow to more than 100 million passengers during the ongoing Fiscal Year 2015. Read more

Very un-British report on Ryanair-AerLingus

This amused us a lot–from the free British e-newsletter from Airline Fleet Management.

Talking Point
Pesky pursuer Ryanair claims Aer Lingus is a done deal

Ah, Ryanair. It’s like the Granny no one wants a sloppy kiss from, or the colleague no one wants to sit next to at the Christmas dinner. In fact, many of its hardened customers don’t really like it that much. Bottom of the friends list though is Aer Lingus.

To Aer Lingus, Ryanair is a sleazy old man with relentless ambition and bad intentions. Despite continuous rebuttals, it keeps trying to woo, or win Aer Lingus by force.

Ryanair now says it is “confident” that its €700m takeover bid for Aer Lingus will gain approval from the European Commission, despite the regulator recently sending the airline a list of objections based on rules governing competition.

The carrier said it has devised a number of remedies, including: “new airline bases in Dublin, new entrant competitors on over 40 routes to/from Dublin, Cork and Shannon, as well as specific competition solutions that guarantee increased price competition”.

It has until December 31 to finalise these plans before the watchdog makes its final decision.

Ryanair already owns 30 per cent of Aer Lingus and has had two failed attempts at a takeover. In 2007, the Commission turned down a bid for completion issues and in 2009, Ryanair dropped its second bid.

Poor Aer Lingus, when is it going to convince Ryanair that ‘no means no’?

Mary-Anne Baldwin, Editor, Airline Fleet Management