EasyJet: allocated seating = £308m profit boost!

munchkin_utd

Easyjet have almost proved the Ryanair business model wrong in one fell swoop by introducing allocated seating and boosting profits by 308million in only 6 months.

Simple reason, the MILLIONS of people who would not countenance flying with them for business or pleasure due to the scrum for seats/ need or wish for seats for personal or practical reasons are suddenly a new found market for Easyjet!
http://www.theguardian.com/business/2013/nov/19/easyjey-shareholders-windfall-profits-up-50-percent

To be honest, every second line in the article is just common sense as to why you cannot expand endlessly by ignoring many folks over 40 who want a modicum of comfort/ folks with kids / business travellers - all who will simply make alternative arrangements rather than up with a scrum for a seat to start off their holiday/ business trip

(since the introduction of allocated seating) Increasing numbers of older, affluent passengers are flying with easyJet, driving profits at the budget airline to record levels and delivering a £308m windfall to shareholders.

Almost 61 million passengers flew with easyJet during the year, including 11 million business customers, a more lucrative group because they book later and are prepared to pay for more leg-room. This helped lift the average profit per seat to £7.03, up from £4.81 in 2012.

(Easyjet chief Executive) McCall said. Many older passengers, especially, "our parents' generation", do not want to be in the scrum for boarding, she said.

the one thing that Ryanair might not be able to replicate with their customer service offensive is such a strong showing in business customers, which Easyjet gets from flying to main city airports.

keith16

munchkin_utd wrote: »

the one thing that Ryanair might not be able to replicate with their customer service offensive is such a strong showing in business customers, which Easyjet gets from flying to main city airports.

Aren't FR talking about introducing this also?

In fact, I think this is a bit of a myth. I can only count 8 or 9 destinations from Dublin with another word beside the name of the city

e.g. Brussels Charleroi

And even with some of these, they do offer the main airport, so you can fly into Barcelona - Girona (100k from Barcelona) or Barcelona - El Prat, the main airport.

So it looks like, it's only cities like Brussels, Paris, Rome and Warsaw where I'm looking at a decent coach / train journey to the actual city.

Berlin and London at a stretch.

billie1b

keith16 wrote: »

Aren't FR talking about introducing this also?

In fact, I think this is a bit of a myth. I can only count 8 or 9 destinations from Dublin with another word beside the name of the city

e.g. Brussels Charleroi

And even with some of these, they do offer the main airport, so you can fly into Barcelona - Girona (100k from Barcelona) or Barcelona - El Prat, the main airport.

So it looks like, it's only cities like Brussels, Paris, Rome and Warsaw where I'm looking at a decent coach / train journey to the actual city.

Berlin and London at a stretch.

The amount of business pax Ryanair have on their early morning flights and late afternoon late evening to and from the UK and also further afield is well above what your thinking. They also took a lot of business pax from Shamrock over the last few years. A lot of them saying its easier and more convenient to fly with Ryanair

urajoke

keith16 wrote: »

Aren't FR talking about introducing this also?

In fact, I think this is a bit of a myth. I can only count 8 or 9 destinations from Dublin with another word beside the name of the city

e.g. Brussels Charleroi

And even with some of these, they do offer the main airport, so you can fly into Barcelona - Girona (100k from Barcelona) or Barcelona - El Prat, the main airport.

So it looks like, it's only cities like Brussels, Paris, Rome and Warsaw where I'm looking at a decent coach / train journey to the actual city.

Berlin and London at a stretch.

Rome the airport is CLOSER to the city than the main airport.

ballooba

billie1b wrote: »

The amount of business pax Ryanair have on their early morning flights and late afternoon late evening to and from the UK and also further afield is well above what your thinking. They also took a lot of business pax from Shamrock over the last few years. A lot of them saying its easier and more convenient to fly with Ryanair

I rarely fly Aer Lingus for work, it's usually Ryanair because they fly where I need to go at the time I need to go.

munchkin_utd

ballooba wrote: »

I rarely fly Aer Lingus for work, it's usually Ryanair because they fly where I need to go at the time I need to go.

From the irish point of view the connections to the UK are probably as good with Ryanair as anyone but farther afield they just dont have the same network that easyjet has.

Easyjet flies a dozen destinations to Amsterdam and double that to Charles de Gaulles, complimented by flights to Orly. With a lot of internal French connections too for journeys too far for the TGV to make sence on.
This takes business from Iberia/ Air France/ KLM etc because they are the EXACT same routes being offered.
And because they also offer a good frequency (which outside of the UK-IRL runs Ryanair doesnt) they are very attractive to Business travellers who can get in and out in a day, or at least have a choice of what to do.

circular flexing

keith16 wrote: »

So it looks like, it's only cities like Brussels, Paris, Rome and Warsaw where I'm looking at a decent coach / train journey to the actual city.

Berlin and London at a stretch.

Hahn is almost 2 hours by coach from Frankfurt.
Skavsta is 2 hours by coach from Stockholm.

devnull

Warsaw Modlin is closer to central Warsaw (40km) than London Stansted is to Central London (48km).

murphaph

keith16 wrote: »

Berlin and London at a stretch.

In Berlin's case both FR and EI fly to the same airport, Schönefeld. Tegel is going to close (sometime) any way leaving all flights to Berlin going into Schönefeld (the new airport on same site there). I generally fly EI only because the timings are better for getting home (EI have a Friday evening flight to Dublin and a Sunday evening flight back, FR only fly mid afternoon to Dublin and very early on Sundays to Berlin). Having a small child I would also avoid FR (until their new rules come in, then I'll give them a go again).

bk

munchkin_utd wrote: »

Easyjet have almost proved the Ryanair business model wrong in one fell swoop by introducing allocated seating and boosting profits by 308million in only 6 months.

I don't think that is fair, I think Ryanair had exactly the right business model for the last 15 years that allowed them to grow into the largest airline in Europe!

But times have changed and yes, Ryanair needs to now adjust their business model to compete and we are already seeing them do that.

As was mentioned in another article on this subject, a commentator pointed out that if you wanted a cheap car, you boy a Skoda. But a Skoda you buy today is very different (much better) then the Skoda you would have bought 15 years ago.

Peoples expectations of quality of service increase over time and companies need to move with that.

Aldi/Lidl are another example of this phenomenon, while they started out with small dingy stores, they have now been upgrading them all into nice bright airy stores. With this they are now also doing far more branded goods, lots more advertising and I just saw a few days ago that Aldi now take credit cards!

When Ryanair started out, people were use to paying extortionate fares for fancy services from the big carriers. It made perfect sense for Ryanair to do the complete opposite and over the cheapest fares possible and cut out all the frills and make it as cheap as possible.

But over time, the big carriers have cut their costs and their ticket prices and while probably still more expensive, they have radically reduced the gap, to where Ryanair are losing customers who aren't quiet so price concious and are willing to pay a little more for better service.

Ryanair will have to respond to this like Easyjet have by improving their service while attempting to maintain costs and ticket prices.

And I believe they can do so and that they are very well placed to do so. Many of the improvements Ryanair are making really won't cost them much and might in fact make them more money as they gain more passengers:

- Redesigned, much easier to use website, very easy and cheap to do
- Allocated seating, if they can keep down boarding times, shouldn't cost anything.
- Reducing boarding pass charges, etc. shouldn't cost much as I believe most people had already learned to always print their boarding pass, etc.
- Duty free/hand bag now allowed, costs nothing.
- Lights off at night, costs nothing, might actually save fuel!
- Less annoying announcements, stop selling stupid Lottery cards. I've never actually seen anyone buy a lottery card, I don't think it will cost them anything.

And of course if all these steps make them a more attractive airline to fly with, then they will potentially gain many passengers like EasyJet did.

Some things will cost them though, like having to add some more central hub airports if they want to target business passengers throughout Europe and I'd also like to see them overhaul their cabin, with slightly more comfortable seats and a more modern, bright interior.

Easyjets cabin looks bright, modern and professional, with no yuck garish yellow to be seen.

I hope Ryanair follows suit, at least on new aircraft orders. At least for new orders it shouldn't cost them anything extra to do.

The only criticism I'd have is that Ryanair are a year late to this game. Obviously Easyjet has beaten them to this new strategy (and to a lesser extent Norwegian) and thus Easyjet is gaining lots of very positive free PR and news and thus people who wouldn't otherwise have, might now reconsider them.

Ryanair has further to go with this new reality then Esayjet has. But I certainly wouldn't say it is too late for Ryanair, I believe we are already seeing them change very quickly to this new reality and between this new Ryanair, Easyjet and Norwegian, I think you could see lots of extra pressure on weaker carriers this winter and many might fold, leaving a gap for the above three to fill. I certainly wouldn't underestimate Ryanair.

If I was Aer Lingus, I'd be VERY worried about these new developments, Ryanair will be increasingly encroaching in on their product.

markpb

murphaph wrote: »

Having a small child I would also avoid FR (until their new rules come in, then I'll give them a go again).

As I've said on anther Ryanair thread, I've flown with my baby girl three times (at 3 months to London, 6 months to Barcelona and 15 months to Venice) and had no problems with Ryanair at all. I've also made a few trips with her on Aer Lingus and noticed no difference in service or helpfulness between the two. I admit that once you go past one child, it might get a little more awkward (until their new rules come into effect).

munchkin_utd

markpb wrote: »

As I've said on anther Ryanair thread, I've flown with my baby girl three times (at 3 months to London, 6 months to Barcelona and 15 months to Venice) and had no problems with Ryanair at all. I've also made a few trips with her on Aer Lingus and noticed no difference in service or helpfulness between the two. I admit that once you go past one child, it might get a little more awkward (until their new rules come into effect).

to be honest I'm 100% with you. I flew with them with a broken foot and they couldnt have been more helpful.
It still didnt convince the wife that flying with them with the kids was an option over the past 4 years, till a month ago when it was Ryanair or nothing (and the latter nearly happened as it was an awful job to convince her)
Sure I even had flights booked for herself and the 2 kids with Ryanair from Hahn to Kerry (enroute from Munich to Cherbourg by car) to shorten the journey back home last christmas which I was driving anyhow thanks to Irish car rental prices at xmas, and the wife decided it was less hassle to just sit in the car for the guts of a day and then a 19hour overnight ferry!!! Thats how BAD Ryanair is percieved (and they still got my money for the flights not flown!)

Problem is, image is everything.
If Ryanair is seen as an unsafe shower of cowboys, then lots wont fly with them
If they are percieved as having an inconvient system of boarding then others wont fly with them
If they cannot guarantee** someone a seat beside their partner on a long flight that may be 3 or 4 or even 5 hours long, then some will make alternative arrangements
If they cant guarantee a mother that she will have her 2 kids beside her, and not get trampled in a stampede, then they will decide not to fly ryanair.-

bk

And fortunately they seem to be changing all of those things *, which should be a concern for all other airlines.

* Well expect for the safety one which is pure FUD spread by the big old national carriers. Ryanair has one of the youngest fleets in the business and a pretty impeccable safety record.

The story about your wife driving rather then flying with Ryanair is simply nuts. Just pay the €40 (4 passengers) for the reserved seats and you would have been fine.

Even if you hadn't reserved seats, it really isn't an issue as they usually leave families on first anyway.

MuffinsDa

bk wrote: »

Even if you hadn't reserved seats, it really isn't an issue as they usually leave families on first anyway.

When you have small children, "usually" is not good enough. Especially if your public face (MOL) have over years made it known to you that you worth nothing to him and shouldn't expect anything. It's perception + attitude!

Seat selection is relatively new, maybe it wasn't available at the time they were booking.

Newonhere

in 9 years of commuting between Belgium and Ireland Ryanair were by far my preferred choice as they were mostly on time whereas on EVERY occasion that I flew Aer Lingus there was a delay of at least an hour and with most business travelers the most important aspect of the commute is timekeeping.

Peppa Pig

munchkin_utd wrote: »

I even had flights booked for herself and the 2 kids with Ryanair from Hahn to Kerry (enroute from Munich to Cherbourg by car) to shorten the journey back home last christmas which I was driving anyhow thanks to Irish car rental prices at xmas, and the wife decided it was less hassle to just sit in the car for the guts of a day and then a 19hour overnight ferry!!! Thats how BAD Ryanair is percieved (and they still got my money for the flights not flown!)

So not exclusively a Ryanair problem then?
Would the car rental prices have meant going Aer Lingus from Munich to Dublin and driving to Kerry was also not an option?

Everyone to their own but the thoughts of having 2 small kids in a car for 11 hours followed by a 19 hour ferry followed by a 4 hour drive would not appeal to me. I'd take the hassle of getting on a Ryanair plane anyday.

basill

The term "business traveller" is used far to often and bandied around. For AL it means someone who is on a flexi fully refundable or business class ticket, lounge access, rewards scheme member etc. Wearing a suit and tie and heading to Grimsby to sell some widgets wanting a return ticket for 29.99 is not the sort of customer that the national airlines want. This is just one of the reasons why FR has been struggling with falling loads of late. People believe the hype and when they can't get a cheap ticket they look elsewhere. Their customers have been made highly price sensitive due to the PR and generally have no idea nor care how much it actually costs to deliver them safely from A to B.

Peppa Pig

munchkin_utd wrote: »

Easyjet have almost proved the Ryanair business model wrong in one fell swoop by introducing allocated seating and boosting profits by 308million in only 6 months.

I know you have no time for Ryanair and I saw the EasyJet lady being interviewed yesterday and didn't recall the introduction of allocated seating as the only reason, for the profit jump.
Indeed, reading what was said is a different story.
BBC News

Article wrote:

"allowing passengers to book their seats had had a big impact on profitability"
"The airline also cited growth in Europe and the takeover of Flybe's slots at Gatwick airport as factors behind the profit rise"
"However, it warned that it would see a tougher start to the new financial year, due to the success of the business a year earlier, when pent-up demand after the Olympics drove a leap in business."

So allocated seating, Gatwick slots and the Olympics, doesn't really prove the Ryanair model wrong. She commented on the Legacy carriers as being miles behind EasyJet but not Ryanair.

munchkin_utd

Peppa Pig wrote: »

I know you have no time for Ryanair <snip>

I have TONS of time for Ryanair. I was the one who had convinced the wife (i thought) to fly with them so I spent €133.98 of my money on a flight for the wife and 2 kids to skip straight from Frankfurt to Kerry rather than a trek in the car with me the entire way.

Its my wife who has no time for them and decided to let already purchased tickets lapse. And from looking at the reciept it seems that I even paid for priority boarding! Mad stuff.
But have I an oversensitive spouse (who has many times flown alone on AerLingus with the 2 kids before and with the one when there was only 1) or have Ryanair that effect on people?

I think Ryanair are brilliant if you are the type of customer they arent proactively trying (till now) to put off going with them and I have flown with both them and Easyjet for weekends away, without wife and kids in tow obviously.
And when you wait till all are already boarded you avoid the scrums and walz onto the plane relaxed as anything.
I know all that. I also more than apreciate their punctuality, which Easyjet cant even get close to.

I even flew with Ryanair on crutches with a broken foot a couple of years back and found them brilliant altgether. Always making sure I was ok. Offering to help on the steps. They couldnt have been nicer.

But their PR and some procedures/ raft of rules do put people off flying with them.
Now that they (and Easyjet) are fixing this to an extent, its good for the customer and seems to have been at least a factor in being good to Easyjets profits.

Neworder79

keith16 wrote: »

Aren't FR talking about introducing this also?

In fact, I think this is a bit of a myth....

So it looks like, it's only cities like Brussels, Paris, Rome and Warsaw where I'm looking at a decent coach / train journey to the actual city.

Ciampino is closer to Central Rome 16k than main Fumicino 30k, everyone just presumes it's further because of the longtime Ryanair jokes.

bk

munchkin_utd wrote: »

But have I an oversensitive spouse (who has many times flown alone on AerLingus with the 2 kids before and with the one when there was only 1) or have Ryanair that effect on people?

I don't mean any offence, but I think your wife is massively oversensitive and also that you need to put your foot down more often!!

I've been travelling to Poland for years (Polish Girlfriend) and the flight is always packed with people with kids, many of them multiple kids and I've never seen any issue with families with kids.

In fact given that Ryanaur operates to many "immigrant" family locations in Poland, Lithuania, etc., I find they are far more geared towards families then AerLingus.

Even if you didn't have priority boarding, they ALWAYS asked people with kids to come forward and board first.

One time I did see a family arrive onboard late and the staff politely asked some people to move so that the family could sit together and of course people were more then happy to oblige.

I've also seen Ryanair staff kindly entertain nervous kids.

It really isn't an issue like you and your wife are making it out to be and no way was driving and ferry for so many hours anywhere even close to being a better option!

The term "business traveller" is used far to often and bandied around. For AL it means someone who is on a flexi fully refundable or business class ticket, lounge access, rewards scheme member etc. Wearing a suit and tie and heading to Grimsby to sell some widgets wanting a return ticket for 29.99 is not the sort of customer that the national airlines want.

I work for a VERY well off massive US IT multinational and only senior director level and above gets to travel business class. The vast majority of staff in most IT companies travel economy even when flying across to San Fran.

This is the reality of the recession hit world we live in.

Your widget sales man in a suit, if he is flying once a week, with no luggage, is Ryanairs ideal customer, specially if he is more likely to book more expensive last minute tickets.

And such regular customers would definitely be a loss to Aer Lingus.

This is just one of the reasons why FR has been struggling with falling loads of late.

Actually loads were up 6% this October versus last year!

The current bad press about Ryanair feels more like a sneaky plan by Ryanair to get free PR and drive up sales and potentially put some other airlines out of business.

dm09

Neworder79 wrote: »

Ciampino is closer to Central Rome 16k than main Fumicino 30k, everyone just presumes it's further because of the longtime Ryanair jokes.

Yup, also Gothenburg City Airport (The airport Ryanair use) is a lot closer to the city centre than the "main" airport Landvetter, I agree it is a common miscoception.