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March 19, 2010

 

Passionate Cost Cutting Leads to Standing Room Only

How often have you heard long time flyers lament that air travel has become like riding the bus? Well, according to an interview with Michael O'Leary, CEO of Ryanair Holdings Ltd. -- the Southwest Airlines of Europe -- in this morning’s WSJ, Ryanair might bring air travel one step closer to parody with urban transit. Quoting O’Leary, The Journal writes "Another [cost cutting option] we're looking at is taking out the last 10 rows of seats and putting in handrails. In that case, you'd be able to offer on each flight, say, 125 seats. But you'd also have standing room for maybe another 100 passengers. And the proposition would be that if you want a seat, you pay €30 ($44). But if you're willing to stand, you pay €1.”



What's interesting about Ryanair’s putting their cost cutting plans "on steroids", as The Journal calls it, is that they appear adamant in their philosophy that there's no such thing as a free lunch -- or snack, lavatory, baggage check or seat for that matter. O’Leary says "... paying for checked-in bags: It wasn't about getting revenue. It was about persuading people to change their travel behavior -- to travel with carry-on luggage only ...[and] Now we're looking at charging for toilets on board -- not because we want revenue from toilet fees. We'd happily give the money away to some incontinent charity. What it means is, if by charging for toilets on board, more people would use the toilets in the terminals before or after flights, I could take out maybe two of the three toilets on board, add six extra seats and reduce fares across the aircraft by another three or four percent."

At a time when price/cost competition is perhaps the most acute concern across all industries, following Ryanair's lead of further commoditizing their sector may not be a universal long term solution. The world economy will recover. And when it does, a value added edge in competition will be leading the charge.

- William Busch

Comments
Sorry, the FAA requires these things...

Federal Airline Regulations Section 121.311 - Seats, safety belts, and shoulder harnesses.

"each person on board an airplane operated under this part shall occupy an approved seat or berth with a separate safety belt properly secured about him or her during movement on the surface, takeoff, and landing"

There - the Feds know best what is good for you!
# Posted By Thomas Kase | 12/9/09 5:10 PM
This has a whiff of the gas station about it. Remember when you paid for gas, and as part of that payment someone put the gas in the tank for you, cleaned your windshield, checked your tires, and maybe even gave you some kind of promotional branded gift?(A friend has an entire record collection his mother got from a particular chain.) All that is gone - we pump our own gas and handle the payment, too, if we use plastic. If we're lucky, the station has squeegees out for us to use ourselves, and perhaps we'll have enough quarters on hand to use the extortion-priced air pumps. Has this brought prices down? (I'll wait while you stop laughing...) All this kind of effort does is to lower the bar on service and acclimate us to less and less while prices eventually go right back up. I appreciate cheap airfare as much as the next person, but turning a plane into a flying subway car is not my idea of progress.
# Posted By Joy Campbell | 12/9/09 8:31 PM
Thomas,
That’s a bit U.S. centric. The FAA reports “Under the International Convention on Civil Aviation (Chicago Convention) each country is responsible for the safety oversight of its own air carriers. Other countries can only conduct specific surveillance activities, principally involving inspection of required documents and the physical condition of aircraft.”
Perhaps Ryanair will need to include “Please put your helmet on” when preparing for take-off, landing and turbulence.
# Posted By Bill | 12/10/09 5:07 AM
The article reference was from the Journal (WSJ) - in the US. Also, for better or worse, the FAA sets the rules for the vast majority of passenger miles flown in the world.

Maybe the EU equivalent of FAA can see fit to change the rules for some local puddle-jumper outfit - but the laws of physics apply in Europe as well. Sudden weight shifts in a plane - e.g. if those one hundred standing passengers all fall backward during takeoff - would rapidly move the plane's center of gravity - not good. Stall much?

Don't count me among those who like bureaucrats - few groups of people are as status quo minded. They would outlaw fire if they could.
# Posted By Thomas Kase | 12/11/09 8:13 AM
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