British Airways and Ryanair

BusPass_2

Just noticed that British Airways have posted a half year loss of £292 Million.

Ryanair recently posted a half year profit of 387 Million euros.

I have a couple of return flights booked with Ryanair to Paris and Malaga cost totalling £54.80.

I have priced flights this morning flying on the same dates with British Airways, total cost £806!!!

Yet BA makes a whacking great loss and Ryanair make a whacking great profit.

I'm no economist or high heid yin in the aircraft industry but how does that work?

inflationbusting

One of the main factors is that you've selectively chosen a few fares for your reasoning. £806 probably refers to a fully changable refundable fare, which Ryanair is not. Either way, that isn't reflective of the average that a BA customer would pay on short-haul for a comparable ticket.

In fact, there are probably some fares which BA are cheaper than Ryanair on certain flights. Barcelona, for instance.

The short answer is that BA have much larger costs than Ryanair, hence the term 'low cost carrier'.

But in reality there are more reasons than this. Just comparing headline figures doesn't provide all the insights.

Takecareofthepennies

BA are a full-service carrier, meaning they don't charge you extra for checked luggage, airport (or indeed web) check-in, onboard catering etc. You may not be comparing like for like.

Also, a part of Ryanair's profits are made on the back of their employees. However much Unions at BA moan at the moment, employment conditions are a completely different kettle of fish at Ryanair.

LB1985

Short article on this very topic here:

http://www.thisislondon.co.uk/standard-business/article-23765307-staff-and-fuel-costs-are-too-high-as-passengers-fly-anyone-but-ba.do

stoneman

BusPass wrote: »

.

I have a couple of return flights booked with Ryanair to Paris and Malaga cost totalling £54.80.

I have priced flights this morning flying on the same dates with British Airways, total cost £806!!!

And I just priced up some flights to Barcelona in March for 2. RA were £250 including CC charge and 1 bag in the hold, oh and 46 euros for a 1 1/2 hour trip to north east Barcelona. BA were £205 for 2 bags in the hold, 2 cabin bags any weight, CC charge, free snacks and drinks on the flight, and 14 euros for a 20 minute transfer to central Barcelona.
See, we can all do that one.:rolleyes:

BusinessStudent

stoneman wrote: »

And I just priced up some flights to Barcelona in March for 2. RA were £250 including CC charge and 1 bag in the hold, oh and 46 euros for a 1 1/2 hour trip to north east Barcelona. BA were £205 for 2 bags in the hold, 2 cabin bags any weight, CC charge, free snacks and drinks on the flight, and 14 euros for a 20 minute transfer to central Barcelona.
See, we can all do that one.:rolleyes:

YES! - it will be. Your not playing the "game" - which is to be FLEXIBLE and not have set dates!!

You can go for either £20 or £28 return from London Stansted in January and Feb.

Why on earth do you need to take large suitcase with you anyway? Take hand luggage and it will be free.

You mentioned the flights 1.5 hours long - why do you feel the need to have to eat during the flight? Surely you could go without!

BusPass_2

Thanks for all your replies

Inflation busting - I have not been selective, nor have I been random, I have compared very specifically actual charges for when I want to fly.

LB1985 - Thanks very much for a very illuminating article.

Stoneman - Sorry you have chosen to be so hostile but my price differential is hugely greater than yours!! I wouldn't have made my original post if both prices were in the same ball park.

Business Student - I agree with you. I don't need to carry a suitcase and I can survive a couple of hours without food.

LHR777

To compare prices like this does not make sense.

On many ocassions Ryanair lead in base price will be cheaper than BA, if it wasn't it wouldn't be in business.

It is well documented that BA do offer good value fares, when booked in advance, offering a multitude of benefits over Ryanair.

However, on many ocassions BA do not chose to compete on price with Ryanair, and in the example of Barcelona above, BA have offered a price, which they believe they can sell at.

If you look at the BA books it doesn't have a problem filling planes with the prices it charges, the problem relates to the cost base which is unflexible and in this sharp downturn leads to big losses. This is where all the problems are.

Ryanair has a very flexible cost base, for example it's pilots are out sourced. Meaning capacity can easily be adjusted and profits maintained, especially when you start charging for online checkin.

In summary Ryanair benefits greatly from it's cost base to maintain profitability, while BA is currently getting hammered.

inflationbusting

Buspass: 'Comparing very specifically' is pretty equivalent to 'selective' in this sense. Of course, it's most likely that it was unintentional on your part. It's likely that the Ryanair fares (either one or both) were bought on promotional fares, whereas the BA ones were not.

However, if you would compare average fares for equivalent services ie: BA short-haul across a wider range of passengers, there would be more meaning to it. But as LHR777 alludes to, the problems are in the costs, rather than the structure of pricing.

I'll give you an example of why it doesn't make sense:

Just noticed that Woolworths had posted a half year loss of £292 Million.

Tesco recently posted a half year profit of 387 Million euros.

I bought a Tesco value chocolate bar today for just 9p.

I went into Woolworths today and priced a Dairy Milk bar for £2.99!

Yet Woolworths made a whacking great loss and Tesco make a whacking great profit.

I'm no economist or high heid yin in the retail industry but how does that work?

Got to consider the whole context; not many insights are to be gained by just comparing one price.

BusPass_2

Good answer and I fully take your points.

My original point , which I obviously did not make very well, was that as a customer I found huge discrepancies in fares and at the same time both service providers were announcing results which appeared illogical given their quoted fare prices.

Oh and incidentally, Woolies went belly up and Tesco are still in business.

stoneman

BusinessStudent wrote: »

YES! - it will be. Your not playing the "game" - which is to be FLEXIBLE and not have set dates!!

You can go for either £20 or £28 return from London Stansted in January and Feb.

Why on earth do you need to take large suitcase with you anyway? Take hand luggage and it will be free.

You mentioned the flights 1.5 hours long - why do you feel the need to have to eat during the flight? Surely you could go without!

OK I'll answer you in order.
I think I was being quite flexible, I looked in the whole of March, any dates, as long as there was a 6 day gap, the OP had specific dates. 1-0
I didn't want to go from STN, sorry if that's asking too much, bit far away from me, kinda like Gerona being too far from Barcelona as well. 2-0
I never said I wanted to take a LARGE suitcase, just costed in 1 X 20KG case. See, me and the wife like to change our clothes now and again on a 6 day trip (something that students find hard to comprehend) Hat trick!
Well, being a moneysaver, those FREE drinks and snacks on board will save us buying anything to eat at the airport, or bringing our own food.
They think it's all over, it is now!!!
BusPass,
Yes I did misunderstand your point in the first post, glad you cleared it up.