Europe’s most profitable airline, wants to make air travel free. Not free as in free from regulation, but free as in zero cost. By the end of the decade, he promises, “more than half of our passengers will fly free.”
The remarkable thing is, few analysts think his prediction is far-fetched: Ryanair already offers free fares to a quarter of its customers.
By a wide marginEven without free flights, Ryanair has become one of Europe’s most popular carriers. Last year it flew 35 million passengers to more than 100 European destinations, while its customers paid an average fare of just $53. The airline enjoyed revenues of $1.7 billion, up 20 percent over 2004, at a time when most competitors were stuck in a holding pattern.
Even more impressive, Ryanair’s $368 million in net earnings gave the airline an industry-leading 22 percent net profit margin. (By comparison, Southwest Airlines’s (Research) net margin was 7.2 percent.) “Ryanair has the strongest financials in the European airline industry,” says James Parker, an equity analyst with Raymond James.
Fly for free in EuropeI’ve been doing a lot of looking at cheaper way s to get from point A to point B and Southwests Special pricing is freaking good. I’m talking 1 way tickets to San Diego for less then $50, 1 way tickets to Fort Lauderdale Florida… alll the way across the US for only a bit more then $80. So to read that a European Airline is cheaper then Southwest astounds me. I’ve heard that the Scottish are frugal but this Irishman really shows that you can fly cheap, but pay for the extras. And it seems a pretty good way to do business. If United, Northwaest and Delta actually started looking at how these profitable airlines are doing business (By actually slashing costs and passing THAT to the customer) I think we’d see fewer bankruptcies and more growing airlines and happier people.
