Ryanair vs. SkyEurope Jan Face-Off

Since I wrote my December Ryanair/SkyEurope passenger and load factor comparison last month, there has been a great deal of print devoted to the ever more difficult conditions faced by European low-cost carriers.

Almost every day brings more grist for the mill. Three notable developments are Ryanair's dramatic drop in third-quarter profits, easyJet and Ryanair's plunging share prices, and Clickair's canceled plane orders and abandoned routes.

And then there's talk of the antidote to tough market conditions, namely mergers. There are rumors from Spain of a big low-cost consolidation, possibly binding Clickair and Vueling. From Germany, there is more concrete evidence of a far more massive merger in the works, which would consolidate Germanwings, TUIfly, and Lufthansa Regional's Eurowings.

It's against this turbulent backdrop that I look at Ryanair and SkyEurope's January performances. Ryanair took in 17 percent more passengers in January 2008 against January 2007: 3.68 million against last year's 3.14 million.  SkyEurope coaxed a rather more modest 227,000 passengers into its planes in January against last January's 184,000, resulting in an impressive passenger tally increase of 23.4 percent.

On the load factor front, things get a little scary for the airlines in question. Ryanair's load factor dropped 2 percent to 69 percent in January against last year's numbers, while SkyEurope's load factor plummeted 14.2 percent to 58.4%.

Last month, I speculated about Ryanair's practice of blocking rows of seats off from passenger use, wondering if this might actually be a way of increasing load factor numbers. I'm still wondering, especially after taking a look at the very slippery language used to define "load factor." This language ("the number of passengers as a proportion of the number of seats available for passengers") certainly provides ample wiggle room for Ryanair to exclude those blocked rows from load factor calculations.

The airline is crafty like ice is cold.

Since I wrote my December Ryanair/SkyEurope passenger and load factor comparison last month, there has been a great deal of print devoted to the ever more difficult conditions faced by European low-cost carriers.

Almost every day brings more grist for the mill. Three notable developments are Ryanair's dramatic drop in third-quarter profits, easyJet and Ryanair's plunging share prices, and Clickair's canceled plane orders and abandoned routes.

And then there's talk of the antidote to tough market conditions, namely mergers. There are rumors from Spain of a big low-cost consolidation, possibly binding Clickair and Vueling. From Germany, there is more concrete evidence of a far more massive merger in the works, which would consolidate Germanwings, TUIfly, and Lufthansa Regional's Eurowings.

It's against this turbulent backdrop that I look at Ryanair and SkyEurope's January performances. Ryanair took in 17 percent more passengers in January 2008 against January 2007: 3.68 million against last year's 3.14 million.  SkyEurope coaxed a rather more modest 227,000 passengers into its planes in January against last January's 184,000, resulting in an impressive passenger tally increase of 23.4 percent.

On the load factor front, things get a little scary for the airlines in question. Ryanair's load factor dropped 2 percent to 69 percent in January against last year's numbers, while SkyEurope's load factor plummeted 14.2 percent to 58.4%.

Last month, I speculated about Ryanair's practice of blocking rows of seats off from passenger use, wondering if this might actually be a way of increasing load factor numbers. I'm still wondering, especially after taking a look at the very slippery language used to define "load factor." This language ("the number of passengers as a proportion of the number of seats available for passengers") certainly provides ample wiggle room for Ryanair to exclude those blocked rows from load factor calculations.

The airline is crafty like ice is cold.

Comments

[poetloverrebelspy]

On my flights, they've always told me that it's a balance issue for take-off and landing. EasyJet also did this on flights between Berlin and Venice I was on this month. I've had U.S. carriers do it as well. I would guess they go from the passenger numbers in their computer and tally based on the size of the airplane, since the number of blocked-off rows is variable. But again, since I'm not an industry insider, it's just speculation.

The January flights I took to/from Stockholm Skavsta had so few passengers that I considered doing an impromptu poll on how much everyone had paid for their tickets. There was no question why I nabbed ours for 2 euros o/w. . .

[Alex Robertson Textor]

Thanks for the comment poetloverrebelspy. I've done a little reseach and it appears that Ryanair restricts rows to "trim" their planes properly and save fuel and money in the process. Trimming means keeping passengers out of the front and back rows on partially full planes during takeoff and landing.

Most airlines restricting seats in this manner will permit passengers to sit in the blocked seats between takeoff and landing. By contrast, Ryanair keeps these rows (at least the back ones) blocked for the entirety of their flights. Now, this is what I've observed. If mine is an outlier of an experience, then my theory collapses.

The language used to define "load factor" is interesting. It seems quite conceivable that seats in blocked-off rows are simply not included in load factor calculations. The language almost appears to have been developed with these blocked-off rows in mind.