RYANAIR MAKES €7M A DAY FROM FLIGHT ‘EXTRAS’
Budget airline’s income from add-on costs soars 27% in six months
RYANAIR is making an astonishing €7million a day in extra charges from its customers, it has emerged. A surge in the number of people paying more to reserve a seat, or to bring a second bag on board, has enabled the airline to generate €1.3billion in ‘ancillary’ revenue in the first six months of this year.
Details of the firm’s revenue revealed that income from the add-ons soared by 27% during this period, helping to push the airline’s overall income up 8% to €4.8billion. Ancillary sales include everything apart from the fare and baggage fee, and range from priority boarding to seats with extra legroom, snacks, sandwiches and car hire.
Announcing its half-year results, Ryanair said the controversial priority boarding and reserved seating charges were the main driving force behind the
spike in sales. ‘Key drivers of this growth were improved conversion of priority boarding and reserved seating,’ it added.
The increase means that Ryanair now makes an average of almost €17 on each of the 76.6million passengers who flew with the airline in the first half of 2018 – pushing up the average fare by almost a third.
Ryanair blamed strikes by cabin crew, pilots and air traffic controllers – as well as higher oil costs – for a dip in overall profits by 7% to €1.2billion.
The airline recently announced a controversial change to baggage fees, declaring that passengers will no longer be able to bring small wheelie cases for free from November 1 – unless they pay for priority boarding.
Those who don’t purchase priority boarding will now be charged €8 to store their larger bag in the hold.
Currently, for bookings made before September 2018, passengers are allowed to bring a small bag on board, while a second larger bag – such as a wheelie suitcase up to 10kg – can be put in the hold for free. Ryanair has insisted it will generate ‘nothing’ from the changes to fees, which it claims are intended to speed up boarding and reduce delays caused by passengers bringing a second bag through security and leaving it at the gate.
Travel industry expert Eoghan Corry, of travelextra.ie, said: ‘The average fare is down but the big shock is that ancillary revenues are up by 27% – and that’s a pretty spectacular rise.
‘Ancillary revenue had been growing by 10%, 15%, 20% – so to hit 27% is a spectacular achievement, and to me that’s down to priority boarding.
‘They’re now selling a whole load of priority boarding and that’s what’s causing all these rows about families being split up because more than half the people are paying for priority boarding, the maximum number they will allow.
‘It’s a real sign of a big, big change in booking patterns on Ryanair, which has been confirmed in these results.’
In a statement released to the Irish Daily Mail last night, a Ryanair spokesperson said the airline’s optional expenses are ‘all about customer choice’.
The airline added that it continues to have the ‘lowest fares in Europe’, while ‘customers may choose to purchase additional products and services, the prices for which are fully transparent and displayed throughout the booking process’.
In relation to the controversial seat reservation system, the spokesperson added: ‘Our seating policy is simple.
‘All customers can choose to purchase a reserved seat or take a free randomly allocated seat.
‘Our family seating policy requires families (with children under 12) to sit together, with one adult taking a reserved seat for just €4, and the children given free-of-charge reserved seats.’
The airline also doubled the cost of its seat reservation fees earlier this year, while hiking the cost of extra-legroom seats.
Seat reservations jumped from €2 to €4 per passenger per leg – or €8 for a return journey – while the cost of a seat with extra legroom rose from €11 to €15 per trip. Other extra charges include a name change fee, and a charge for carrying sports equipment, a bike or child equipment such as a cot. During the six-month period, the number of passengers who flew with their airline grew by 6% to 76.6 million while the average fare per flight fell 3% to under €46.
Despite the drop in profits, the share price rose yesterday by 49c to almost €12, an increase of more than 4%. This represented something of a recovery from the start of this month, when a profit warning saw the firm’s stock market valuation drop by nearly €2billion, from almost €15billion. The airline – Europe’s
‘27% is a pretty spectacular rise’
Represented a recovery
largest – blamed lower passenger numbers for forcing it to offer cheaper fares as flyers were scared away by a series of pilot and cabin crew strikes.
Ryanair boss Michael O’Leary saw his personal fortune plummet by around €70million as a result of the dramatic drop on October 1.
Mr O’Leary owns a reported 44.1million shares in the firm, which were worth an estimated €578million; however, the shares slumped by 13% that day from €13.14 to €11.43 – a fall of €1.71.