When you think of giving away products for free, you probably think of new web applications from Google, or those neat little toys that come in cereal boxes. Ryanair, an Irish airline, is trying to add flying to the mix striving to make half their flights free by 2010.
I really didn’t believe it either, but after reading an article on CNNMoney, they seem legit. While a quarter of their customers are offered free fares, Ryanair’s average customer still pays about $53. Instead of the traditional airline pricing scheme, Ryanair charges for just about everything besides the ticket. They charge for handling every piece of luggage, every drink, every peanut, every inch of advertising on the side of planes, and soon—cell phone access during flights. The real shocker is that Ryanair earned $368M in net earnings, which gave the airline an industry-leading 22 percent net profit margin.
> “Each time Ryanair comes up with a new way to cut costs by a few million dollars—for example, by removing seat-back pockets to reduce weight and cleaning expense—[Michael O’Leary, Chief Executive of Ryanair] passes the savings along to customers in the form of lower fares.”
What can a web developers learn from all this? I think free is a great model, but you should consider starting a profitable business first. Too many businesses fail because it can take years before your ideas gain traction. Supporting a company with no revenue model outside of advertising is extremely difficult if growth isn’t exponential. So start with a solid business model, charge a fair price for a great product, and then use your creativity to experiment with pricing models.
Ryanair is a kick-ass company, I fly with them to Paris and Bruxelles from Stockholm a weekly basis for €10 return trip. There was a BBC documentary recently though showing they had some safety issues. Training for onboard staff was lacking, and they seem to work extremely long shifts.
http://www.bizbuzzmedia.com/blogs/flight_international/archive/2006/02/14/1281.aspx
While they might have the lowest airfare I think you will find that the “taxes” they charge make up for it.
I don’t know actually what the taxes really are but I’m sure theyre not that much, not at liest for the small airports Ryanair uses.
And theyre airports are allways miles away from civilisation(they also operate the buses going to & from cities, often costing more than the flight).
the <title> for the document on CNN Money site reads this: “Fly for free - April 1, 2006”. Take hint…
A number of Business 2.0 articles were released on April 1. That article combined with http://en.wikipedia.org/wiki/Ryanair makes me think it wasn’t a joke.
ryanair has got one of the worst reputations in the UK. not sure they’re a good poster-boy for anything…
As a regular flyer on RyanAir, I can tell you they make SouthWest look premium.
(Apart from the taxes, which they don’t keep) RyanAir charge you £5 now to put your luggage in the hold, charge you 4% to take your money by credit card, charge you 50p to pay for the provision of airside wheelchairs (regardless of whether you need one or not), etc…
And when you get on EVERYTHING is sponsored - from your headrest through to the saftycard. I don’t know whether the rumours their lifejackets are sponsored is true… :)
But seriously if you extraploated RyanAir into a mashup you’d have something that offered you the AJAX interface for free, but charged you to access the data that drives the proposition. Once you’d payed your money youd find every thing that can to be sponsored with adverts. And you’d be forces to pay additional odd charges for functiaonality you may — or may not — want to use!
Ryanair employees are actually treated very well supposely with a low turnover of staff. Not so fond of unions though.
Interesting to see Ryanair get mentioned here.
They are what they are or you get exactly what it says on the tin. its a cheap airline and they have mastered this market perfectly.
Besides charging for extra stuff like food etc i don’t see any hidden costs at all. So i don’t see how they have ‘one of the worst reputations in the UK.’
From a business perspective it has one of the most inovative and radical business models in an industry were it isn’t easy to think ouside the box.
You get what you pay for.
Ryanair took over where Aeroflot erm, crashed.
They have the most unfriendly, dumb, tacky, desparate and nasty service of any industry let alone one the relies on safety.
But, you get what you pay for.