Michael O’Leary, Ryanair airline’s chief executive has an ambition that many would only think of perhaps in their dreams. The buoyant CEO intends to offer zero fares flights in 10 years’ time. He tags all this to the increasing attractive deals being offered to his airline by European airports. O’Leary claims that the process is already starting to happen given that various airport fees and charges have either been lowered or abolished.
Average fares on Ryanair last year were €46 (£39) inclusive of one checked bag. However, the figure is likely to come down this year by 10% to 15%. In his justification for the free flights, O’Leary explains that his view about airports is that are just shopping malls. Thus why should people be charged for being delivered to shopping malls?
Question: How Will The Airline Make Money?
Everyone is in business to make the most out of it in terms of revenue. So given O’Leary’s 10-year vision, how will the airline make money? Remember O’Leary was touting his intent to an audience of airport directors at the Airport Operators Association annual conference in London. Of course, his offer means that the 119m passenger carrier will always be full. Apart from this, the Irish airline’s fleet is rapidly growing and has the capacity to pass 200m by 2024.
— Ryanair (@Ryanair) December 20, 2016
However, he argues that the company will make money out of sharing the retail revenues at airports. After all, there will be so many people running through the airports. Apparently, Ryanair does not necessarily have to rely on real people to earn money. It makes more from no-shows. There would also be more growth from taking price receptive passengers off the likes of Air Berlin in Germany, Lot in Poland or Alitalia in Italy.
O’Leary Has Turned A Failing Irish Airline Into A Huge Success
In many organizations, such a declaration by O’Leary is likely to call for a send-off, but apparently not with the Irish airline. His idiosyncratic management style has yield incredible results; making the airline one of the most successful low-cost carrier in Europe. Hence, the board does not feel the pinch of his address to a multitude of airport directors.
Amidst the fierce competition between airlines in Europe this winter, Ryanair was able to make an average of £15 profit per passenger. However, it expects to make as little as £3 per head between October and March.