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| Ryanair |
Ryanair is an Irish low-cost airline with its head office at Dublin Airport, and with primary operational bases at Dublin Airport and London Stansted Airport.
Ryanair operates over 250 Boeing 737-800 aircraft on over 1,100 routes across Europe and Morocco from 44 bases. The airline has been characterised by rapid expansion, a result of the deregulation of the aviation industry in Europe in 1997 and the success of its low-cost business model.
Ryanair has grown since its establishment in 1985 from a small airline flying a short hop from Waterford to London into one of Europe's largest carriers. After the rapidly growing airline was taken public in 1997, the money raised was used to expand the airline into a pan-European carrier. Revenues have risen from €231 million in 1998, to some €1843 million in 2003 and net profits have increased from €48 million to €239 million over the same period.
Ryanair was founded in 1985 by Christopher Ryan, Liam Lonergan (owner of Irish travel agent Club Travel) and Irish businessman Tony Ryan (after whom the company is named), founder of Guinness Peat Aviation and father of Cathal Ryan and Declan. The airline began with a 14-seat Embraer Bandeirante turboprop aircraft, flying between Waterford and London Gatwick Airport with the aim of breaking the duopoly on London-Republic of Ireland flights at that time, held by British Airways and Aer Lingus.
In 1986, the company added a second route – flying Dublin–Luton International Airport in direct competition with the Aer Lingus / British Airways duopoly for the first time. Under partial EU deregulation, airlines could begin new international intra-EU services, as long as at least one of the two governments gave approval (the so-called "double-disapproval" regime). The Irish government at the time refused its approval, in order to protect Aer Lingus, but Britain, under Margaret Thatcher's pro-free-market Conservative government, approved the service. With two routes and two planes, the fledgling airline carried 82,000 passengers in one year. Passenger numbers continued to increase, but the airline generally ran at a loss and, by 1991, was in need of restructuring. Michael O'Leary was charged with the task of making the airline profitable. O'Leary quickly decided that the key to low fares was to implement quick turn-around times for aircraft, "no frills" and no business class, as well as operating a single model of aircraft.
In 1992, the European Union's (EU) deregulation of the air industry in Europe gave carriers from one EU country the right to operate scheduled services between other EU states and represented a major opportunity for Ryanair. After a successful flotation on the Dublin Stock Exchange and the NASDAQ Stock exchanges, the airline launched services to Stockholm, Oslo (Sandefjord Airport, Torp, 110 km south of Oslo), Paris-Beauvais and Charleroi near Brussels. In 1998, flush with new capital, the airline placed a massive US$2 billion order for 45 new Boeing 737–800 series aircraft.
The airline launched its website in 2000, with online booking initially said to be a small and unimportant part of the software supporting the site. Increasingly the online booking contributed to the aim of cutting flight prices by selling direct to passengers and excluding the costs imposed by travel agents. Within a year the website was handling three-quarters of all bookings. Today it is only possible to book seats via the website or via the "Ryanair direct" call-centre. No other possibilities are officially offered.
Ryanair launched a new base of operation in Charleroi Airport in 2001 The airport was relabelled as "Brussels South", even though it is 30 miles distant from the Belgian capital. Later that year, the airline ordered 155 new Boeing 737–800 series aircraft from Boeing at what was believed to be a substantial discount, (taking full advantage of the downturn in aeroplane orders after the slump in air travel following the September 2001 aircraft attacks in the United States) to be delivered over eight years from 2002 to 2010. Approximately 100 of these aircraft had been delivered by the end of 2005, although there were slight delays in late 2005 caused by production disruptions arising from a Boeing machinists' strike.
In 2003, Ryanair announced the order of a further 100 new Boeing 737–800 series aircraft.
In April 2003, Ryanair acquired its ailing competitor Buzz from KLM. By the end of 2003, the airline flew 127 routes, of which 60 had opened in the previous 12 months.
By mid 2004 the airline was operating from a total of 11 bases across Europe.
During 2004, Michael O'Leary warned of a "bloodbath" during the winter from which only two or three low-cost airlines would emerge, the expectation being that these would be Ryanair and EasyJet. A modest loss of €3.3 million in the second quarter of 2004 was the airline's first recorded loss for 15 years. However, the airline recovered posting profits soon after. The enlargement of the European Union on 1 May 2004 opened the way to more new routes as Ryanair and other budget airlines tapped the markets of the EU accession countries.
In February 2005, Ryanair announced an order for a further 70 Boeing 737–800 aircraft, along with an option for a further 70. This was expected at the time to allow Ryanair to increase passenger numbers from the 34 million expected in 2005 to 70 million in 2011. Some of these aircraft would be deployed at Ryanair's 12 European bases, others to 10 new bases the company intended to establish over the next seven years.
In June 2006, the company announced that in the quarter ending 30 June 2006, its average yields were 13% higher than the same quarter of the previous year and its passenger numbers were up by 25% to 10.7 million, although year-on-year comparison was difficult, because of the movement of Easter from first quarter 2005 to second quarter 2006. Net profits (€115.7 m) increased by 80% over the same quarter in 2005. Management indicated that the level of growth may not be sustained for the remainder of that year, despite adding 27 new aircraft and opening new routes.
Ryanair's passenger numbers have grown by up to 25% a year for most of the last decade. Carrying under 700,000 annually in its early years, passenger figures grew to 21.4 million in 2003. The rapid addition of new routes and new bases has enabled this growth in passenger numbers and made Ryanair among the largest carriers on European routes. In August 2004, the airline carried 20% more passengers within Europe than British Airways.
Ryanair posted record half-year profits of €329 million for the six months ending 30 September 2006. Over the same period, passenger traffic grew by more than a fifth to 22.1 million passengers and revenues rose by a third to €1.256 billion.
Fourth quarter 2006 profits far exceeded analyst expectations and over the period from October 2006 to February 2007, the stock rose by some 50%. The press suggested that Ryanair was now selling on its 737-800s at higher prices than the cost of acquisition from Boeing. They also noted that average fares keep increasing.
In January, following a BBC investigation, Ryanair conceded that a claim it had cut its CO2 emissions by half in recent years was "an error".
In the meantime, Ryanair continued to expand and establish new European bases.
In May, Ryanair launched BING. This application brings daily fare specials to the user's computer.
On 31 August 2008 the Sunday Times reported Ryanair was saving money by pressuring pilots to limit their discretionary fuel reserves. The discretionary reserves are in addition to the legal requirement for 5% extra fuel to be carried as a contingency, plus adequate fuel reserves to divert to an alternative airport, plus enough fuel to hold for 30 minutes at the destination airport. Ryanair has already suffered one incident in the past three years due to a low fuel situation. This move was popular at all airlines because of the high cost of fuel in the summer of 2008. Carrying lower reserves allows the plane to get better mileage than when it is overloaded with the excess weight of unused fuel.
On 21 February 2009, Ryanair confirmed they were planning to close all check-in desks by the start of 2010. Michael O'Leary, Ryanair's chief executive said passengers will be able to leave their luggage at a bag drop, but everything else will be done online. This became reality in October 2009.
In February 2010, Michael O'Leary threatened that if London Stansted did not give Ryanair any more low-priced landing fees, the airline would move many of its routes from Stansted to London Gatwick (which provided lower landing offers to the airline) and open a base there, or even pull out entirely from Stansted.
On 28 March 2010, Ryanair announced that the on-board mobile phone service would be temporarily unavailable. Michael O'Leary explained that the contract with OnAir (who provided Ryanair the service) had been terminated after a 13 month proving period. As a result, Ryanair have invited other in-flight communications providers to tender for access to Ryanair's in-flight phone service.
As of February 2010, Ryanair had an average fare of €32. Ryanair stood by that fact that its average fare was less than half of competitor EasyJet's of €66, and therefore called the rival carrier a "high fares" airline.
In March 2011, Ryanair opened a new maintenance hangar at Glasgow Prestwick International Airport. Making the Prestwick facilities Ryanair's biggest fleet maintenance base, performing all aircraft checks with the exception of D checks.The new hangar boosts capacity of the established maintenance facilities at the airport from two aircraft, to five. That same month, Ryanair is in breach of European Union rules by not offering an online complaints service to customers, according to the European Commissions European E-commerce Directive, any company selling goods online must offer customers the opportunity to complain via email. Ryanair currently has no email contact listed on its website instead requiring disgruntled customers to contact them by fax, letter or premium rate telephone number for urgent inquiries.
On May 2011, Ryanair has announced to cut capacity by temporarily ground 80 jets from 267 aircraft in the winter schedule between November 2011 and April 2012 due to high cost of fuel and others. However, the airline will take delivery of 25 new aircraft over the coming months, but will not put them into service until April 2012.
Ryanair has been criticised for many aspects of its customer service. The Economist wrote that Ryanair's "cavalier treatment of passengers" had given Ryanair "a deserved reputation for nastiness" and that the airline "has become a byword for appalling customer service ... and jeering rudeness towards anyone or anything that gets in its way".
In 2002, the High Court in Dublin awarded Jane O'Keefe €67,500 damages and her costs after Ryanair reneged on a free travel prize she was awarded for being the airline's 1 millionth passenger.
The airline has come under heavy criticism in the past for its poor treatment of disabled passengers. In 2002, it refused to provide wheelchairs for disabled passengers at London Stansted Airport, greatly angering disabled rights groups. The airline argued that this provision was the responsibility of the airport authority, stating that wheelchairs were provided by 80 of the 84 Ryanair destination airports, at that time. A court ruling in 2004 judged that the responsibility should be shared by the airline and the airport owners; Ryanair responded by adding a surcharge of £0.50 to all its flight prices. On 30 March 2011, it announced that from 4 April it would add a surcharge of €2 to its flights to cover the costs arising from compliance with EC Regulation 261/2004, which requires it to pay for meals and accommodation for passengers on delayed and cancelled flights.
Ryanair's five largest bases in order of size are London-Stansted (greater than 120 daily departures), Dublin (greater than 70 daily departures), Milan-Bergamo (approximately 70 daily departures), Brussels-Charleroi (between 45 and 50 daily departures) and Alicante (approximately 40 daily departures). Pescara airport is currently the airline's smallest base with approximately five daily departures from the airport. Some non-base airports have more daily departures than some of the base airports. Bratislava, Kraków, London-Gatwick, Palma de Mallorca and Paris-Beauvais are all non-base airports but have more daily departures than Ryanair's bases at Brindisi, Pescara and Shannon. Some of these non-base airports also serve more destinations than some of the airlines larger bases like Barcelona-Reus, Bremen and Bristol.
Ryanair flies in a point to point model rather than the more traditional airline hub and spoke model where the passengers have to change aircraft in transit at a major airport.Ryanair prefers to fly to smaller or secondary airports usually outside of major cities to help the company cut costs and benefit from lower landing fees. For example Ryanair does not fly to the main Düsseldorf airport, it instead flies to Weeze, 70 km from Düsseldorf. Secondary airports are not always far from the city it serves and in fact can be closer than the city's major airport, this is the case at Belfast, Gothenburg and Rome. Ryanair does still serve a number of major airports including Barcelona, Berlin Schönefeld, Dublin, Edinburgh, London-Gatwick, Madrid and Porto although the majority of these cities do not have a secondary airport that Ryanair can use.
Ryanair has 44 European 'bases'. Despite Ryanair being an Irish airline, and having a significant presence there, it has a significant presence in France, Germany, Italy, Poland, Spain, the United Kingdom as well as many other European countries although the airline has no bases in France and Poland. The United Kingdom is its biggest market, containing the airlines largest base and nine others as well as a total of seven other non-base airports. Its three largest British bases in order of size are London-Stansted, Liverpool and East Midlands airports.
Ryanair's largest competitor is EasyJet, which unlike Ryanair has a focus on larger or primary airports and also heavily targets business passengers. Ryanair in more recent years has focused on sun destinations such as the Canary Islands and Greece. EasyJet often criticises Ryanair for its choice of airports and Ryanair often refers to EasyJet as a high fares airline.