What's The Price We Really Pay For Cheap Flights?

If you don’t know already, Ryanair announced a flash sale in October, offering flights for €9.99 now. With destinations across Europe flying from London, Belfast and Glasgow (amongst others), the cheap airline just got cheaper. In just one quick search, we found flights from Edinburgh to Germany or Spain for £5.86, which is about the same amount that you would pay for two cups of coffee. This is almost unheard of in 2018 when we expect to pay anything from £50 to £200 for some short-haul flights.

Sounds like a win-win situation: they get more passengers using their service and we get to travel for next to nothing. Almost feels like they’re doing us a favour, doesn’t it?

 

Why are Ryanair flights so cheap?

Ryanair is already known for having the cheapest flights in comparison to other budget airlines like easyJet and Jet2. For instance, easyJet reported in September 2017 that they sold 86.7 million seats over 12 months and earned a total profit of £305 million, 8% up from 2016 and with a positive outlook for 2018.

In March 2018, Jet2 said their operating profit was £130.6 million (28% up from 2017) and they carried 10.38 million passengers. Great news for them, right? Particularly when you hear that Ryanair’s profits have dropped by 7%. Well, Jet2 only generates 12% of the profit of the Irish airline, which is predicted to make €1.2 billion (£1.06 billion) in 2018.

 

bar chart showing profits of Ryanair, easyJet and Jet2

 

In light of that, you might be wondering how they make so much profit whilst they continue dropping their prices so low. If you look at the statistics, it becomes pretty clear: 130 million people fly with Ryanair in a year on 600,000 flights; that’s more people than there are in Mexico. BBC reported that the average fare is €46, so that means that in theory, their turnover is approximately €5.98 billion from seats alone, not considering extras like baggage, in-flight food or the hotels they now offer as part of a package with their flights.

So a flash sale which brings in a few thousand new customers at cheaper prices? It’s no water off their back, plus it makes them the one place that customers will think of when it comes to cheap flights.

But it’s never as simple as them just selling lots of seats and making money from it. There are costs to consider like aircraft maintenance, fuel and staff, which all have a huge impact on the company’s profits. If they’re selling flights for next to nothing, where is the money coming from?

 

What to expect when you pay €9.99 for a flight

Anyone with access to a TV, computer or smartphone will know that the Ryanair name is far from clean. It’s likely that you’ve heard at least one of the scandals that Ryanair has been involved in over the past few months on the news. If not, don’t worry, we’ve helpfully rounded it up for you:

  • On Friday 10 August, 396 flights were cancelled in Ireland, Belgium, Sweden, Germany and the Netherlands as a result of a 24-hour walkout over pay conditions. Approximately 50,000 passengers were affected.

  • On Friday 28 September, around 250 flights were cancelled due to strikes in Belgium, Germany, Italy, Spain, Portugal and the Netherlands when 2,000 employees protested pay and labour contracts. The 30,000 passengers who were affected were ‘notified’ of this. ‘Staff shortages’ continued to delay flights weeks after.

  • On Friday 19 October, a passenger on a Ryanair flight was racially abusive towards an elderly woman. Instead of the man being removed from the plane, the 77 year old woman was moved to another seat. Since then, Ryanair haven’t apologised to her, but they have let everyone know on Twitter about their stricter baggage regulations so they have ‘better punctuality’. In fact, at the time of posting this blog, the only acknowledgement of the incident has been a tweet:

Ryanair tweet about racial abuse on flight

 

We are “aware”, not sorry, not concerned and not working to rectify the damage that’s been done.

When you pay less, but the company doesn’t seem to be losing much profit, the money has to be taken from somewhere else. In light of recent events, it appears that it comes from staff paychecks and the care and comfort of passengers. This shows us that when you pay for a more expensive flight on a different airline over a Ryanair €9.99 flight, the price difference will determine the standard of staff conditions and customer service.

Of course, we don’t know this for certain as airlines notoriously keep their pricing strategies very close to their chests. One thing that’s pretty clear when you watch the interview with Delsie Gayle, the woman who was verbally abused on the Ryanair flight, is that the wellbeing of passengers isn’t even an afterthought to the airline. No apologies, no action and not a drop of compassion from them. It makes you wonder if this sort of behaviour has happened before and just hasn’t been caught on camera…

When you buy a cheap flight, you might expect the seats to be a little less comfortable, the food selection won’t be great, and the crew aren’t going to give you champagne on arrival. Paying for higher quality customer service isn’t a new thing in any industry, especially within airlines; it’s why we have economy, business and first class. Should we also expect our flights to be cancelled with very little notice, stranding us in another country and without knowing what else to do? Should we expect to be treated with disregard, even when someone is abusive towards us? Some people, after this recent event, have said they’d rather pay extra with a different airline to know for certain that they’ll be treated with respect. Maybe this is the final straw — maybe this is what will put Ryanair out of business.

 

Except...

Unfortunately, it’d take a lot to even make a real dent in the airline’s profits. Even if there was a boycott of the airline from all 80,000 of the passengers who were affected by Ryanair’s strikes in the past three months, there would still be 129.92 million people lining Michael O’Leary’s pockets. A few hundred disgruntled crew members and some unhappy passengers is like a drop in the ocean for the budget airline. Last year, Patrick Collinson wrote ‘you hate Ryanair — but you will fly it again’, which is exactly what O’Leary is counting on. You hate the ethics of the company, but you also hate paying double what you have to for your holiday. At this point, what can convince us that a €9.99 flight isn’t worth it?


Tweet us your thoughts about Ryanair @_transfertravel: are you put off flying with them due to the recent news stories?

Topics

  • Ryanair
Posted 25 October 2018

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