How Ryanair’s time honoured farming methods helped to milk the cash cow to a tune of £406 million
When a company reports healthy annual profits it’s normally cause for cheer but not when it comes to certain budget airlines. Ryanair have just reported an annual pre-tax profit of £406 million. Ordinarily, we’d give them a big slap on the back but not in the case of Mr O’Leary’s airline because the profits, in the main, come from the add-on charges levied against passengers.
The profit announcement represents a massive 25% jump for the company that calls itself the worlds favourite airline. But all is not as it seems. Let’s take a look at some of the reasons why Ryanair made such a killing and how next year might not be so rosy for the company or it’s passengers.
Add On Charges
Many of the budget airlines are sneakier that an MI6 sleeper agent on crack! Add on charges are a superb way of squeezing a little more money from the free flowing, cash dispensing udders of their customers. Here are some of the typical charges you pay when using Ryanair:
Credit Card Payment Fees
Credit card transaction fees. Fast, convenient, secure and extortionate: that’s how this budget airline likes it. Every time you use your flexible friend to pay for you flights you rack up a £6 fee. Why? Is it a government tax? Does the money go to support injured servicemen or deprived communities in some war torn country? No, it’s an admin fee!
You see, apparently, administering an automated system run by some company other than your own costs money… your money!
Charged For Printing a Boarding Pass
Do you know it’s possible £100,000 per year by simply printing off bits of paper? Ryanair have known this for a long time – their highly trained check-in staff will print, frame and autograph your boarding pass for a meagre £60!
I know it’s easy to let someone else do the work. I know that boarding cards are easily lost or your printer might break down but do you really want to fork out the price of decent meal for the sake of 5 minutes work?
Taxed For Having A Baby
The government encourages us to have more children. The future health of the economy hinges on having a younger generation to pick up the baton from us crusty old farts. The wealth and taxes they generate will keep the ball rolling and your pension safe. Ryanair thinks you should pay to take infants on their planes. Stump up your £20 fee and your mini-me’s can experience the joys of Ryanair!
Sweet, Sweet Music To O’Leary’s Ears
Ever wondered why you’re not likely to find the A-list bands using Ryanair? It’s not because they think they’re better than you and that they should have a personal jet (well, it might be). It’s down to Ryanair’s exorbitant fees for taking musical instruments on board their planes. Expect to pay between £50 and £60 for the pleasure of blowing your own trumpet on the Costa Del Sol!
The Other Budget Airlines Are Going Down
In these times of austerity you’d be forgiven if you thought budget airlines were seeing booming revenues. Whilst Ryanair may have scored big airlines such Hungary’s Malev, Catalonian carrier Spanair and Cimber Sterling of Denmark didn’t fair so well.
All 4 four of these carriers have bitten the dust and, with Bmi Baby about to follow their ‘crash and burn’ trajectory, things should, in theory, only get better for Ryanair…
It’s Not All Rosy For Ryanair – Future Fuel Prices Will Hurt Profits
But not everything will continue to go in Ryanair’s favour.
Higher oil prices are expected to for the airlines fuel bill up by nearly £260 million in the first quarter of the year.
The current economic woes in Europe will push Ryanair’s profit margins down even further.
Oh, what is the airline to do? I guess they could always increase their existing fees or even bring in some new add-on charges. Maybe a £20 charge for using the boarding steps! After all, the bloated cash cow needs to be milked just a little bit more!