Saturday, March 25, 2006

"The only reason I can think of is stupidity."

Ryanair, the low fare airline in Europe, carried more passengers than British Airways in February.

Its CEO, Michael O’Leary, gave a pretty blunt interpretation of how to make money in the airline biz back in 2004:

FLUG REVUE: Are there any things in aircraft which you regard as superfluous and would happily do without?

O'Leary: Most of it is standard furnishings that everyone needs: seats, air-conditioning, lighting and so on. We have opted out of adjustable seat backs. We used to spend $2 million a year repairing them. On average, our flights are only one hour 15 minutes long. So why do we need adjustable seat backs? Get rid of them! The sunblinds save us around $1 million a year. They cost about $50,000 per aircraft new. If you can save $50,000 on something so pointless, then you simply leave it out. But most of the fittings one cannot do without. Let me give you another example: we don't carry any freight. Why? It makes the plane heavier, costs more kerosene and the Eurocontrol air traffic control charges are higher. So we cut all that out.

FLUG REVUE: Why have the low-fare airlines been following such a different pattern in Europe and America? The Americans, for example JetBlue, have live TV. And Frontier has big kitchens so that they can serve fresh coffee.

O'Leary: The only reason I can think of is stupidity. There is only one authentic low-cost airline in the USA, and that is Southwest. And only one in Europe, and that is Ryanair. JetBlue may sell cheap tickets, but its profitability is falling back again, as you can see if you look at its business figures.

Read the
rest here.

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