Ryanair: The Best Airline You've Never Heard Of

Eddy Elfenbein submits: Dublin-based Ryanair Holdings (RYAAY) is revolutionizing air travel in Europe. They've borrowed their business model from Southwest Airlines (LUV), and they're having the same kind of success.

What's their base rate for a round-trip flight from London to Pisa? One Euro cent. Of course, there are some setbacks:

Not everyone is happy with Europeans' unchecked mobility. People in countries newly served by budget airlines complain that British bachelor and bachelorette parties are taking over Eastern European cities such as Riga.

European Weekends, a Nottingham-based events coordinator, offers one package that features a "Soviet nurse banquet," with prices starting at 55 pounds ($108) per person.

The cost covers five shots of vodka, five female entertainers, a "lesbian nurse show" and a meal.

"I know about guys who go to Prague for a weekend of cheap beer, prostitutes and fighting," Vertovec says. "People there really complain about it -- and that's due to low-cost airlines."

In the last nine years, the stock is up more than 15-fold.

Comments

[Martin Cowen:]

Couple of points:

The passengers flying to Prague for cheap beer and hookers will not be flying with Ryanair because Ryanair does not currently fly to Prague.

"European Vacations" is legally entitled to carry 500 passengers a year. The UK outbound leisure market is around 40 million a year. Its market share is so small it's not worth working out.

Ryanair has got where it has by: rigorous cost control, leveraging ancillary revenues from its web site, high end yield and revenue management, negotiating a great deal with Boeing for new planes and by operating a highly efficient intra-European low fares airline.

2007 Feb 23 06:13 AM