RYANAIR pre-tax losses £155 million

old_motters

bagand96 wrote: »

Ryanair's business model depends heavily on aircraft trading and this is an area where they will continue to feel the pinch as offloading 5 year old 737s will be harder when other airlines dont have the cash to buy them.

Very interesting, thanks for sharing that.

PolishBigSpender

sturll wrote: »

The problem O Leary has got is that usually when the costs of a business increase this is passed onto the consumer in the price of the goods/service.

This is where there are big problems for Ryanair, it is well know that many people (arguably most) fly with Ryanair because it is a cheap airline. If Ryanair charged lets say the same as BA then it would be interesting to see how many would continue to put up with the extras charged, poor customer service, poor follow up of complaints etc... O Leary knows this and so right at the top of his to do list is 'keep flight prices low' Beacuse of this he has to find alternate ways to addc costs.

And as we all know he adds all these charges knowing full well that whilst there may be someone who pays with an Electron card, carries no bags, checks in online, buys nothing in the air and doesn't use the toilet - There will always be much more that don't have an Elctron card, take bags etc etc

Very very good business model, very restricted in terms of price increases.

For once, you've actually posted something that's factually correct. I very much doubt anyone would fly Ryanair if BA is offered at the same price - as you say, the whole thing depends on cheaper prices.

One thing to consider - Ryanair has around 2 billion pounds in cash in the bank. They simply aren't worried by losing a small amount - and to make such a small loss when O'Leary did completely get it wrong with fuel hedging is nothing short of a testament to just how well organised the business is.

It's also fair to say that Ryanair is the only game in town in some respects. For instance, from my local airport - Ryanair is the only sensible option to the UK. Yes, there is connections through Warsaw/Frankfurt, but these are infuriating and far more expensive. For that reason, Ryanair will continue to do very well on routes where they have little or no competition.

But the crucial thing here is that Ryanair wouldn't have lost any money if it wasn't for the Aer Lingus stake. The business itself is more than financially sound - and I very much doubt that O'Leary is particularly bothered about the Aer Lingus writedown, especially as the damage has been done.

bagand96 wrote:

Ryanair's business model depends heavily on aircraft trading and this is an area where they will continue to feel the pinch as offloading 5 year old 737s will be harder when other airlines dont have the cash to buy them.

Trust me, there will always be a demand for second hand 737's. Currently, there's a huge backlog at both Boeing and Airbus - and getting hold of planes in a decent, nearly new condition is next to impossible. For that reason, Ryanair will continue to have success - particularly as the aircraft leasing companies are not struggling in the slightest.