AWFUL airline, great stock. Ryanair might be the bête noire of the chattering classes, but Michael O’Leary’s low-cost carrier is attracting enough customers without them. Its passenger numbers were up 14 per cent to 16m in the third quarter, a traditionally dire time for airlines. Revenues lagged behind, edging up one per cent as yields fell, although this was still an excellent performance for an airliner.
Ryanair still has more room to grow. It bases its business model on Southwest Airlines in the US, which has grown its market share by 48 per cent since 1999. In 2009, it had about 14 per cent of the US domestic market, while Ryanair has just 10 per cent. The so-called “Southwest effect” still has some mileage in Ireland and the UK.
It is also fighting against increasingly weak competition (excluding easyJet, which is successfully pitching itself between no-frills and full service carriers). One fact illustrates why ailing BA is doing so badly; for every 1,000 passengers it carries, it loses 15.9 bags, while Ryanair loses just 0.3.
Fewer people take a bag with Ryanair due to the additional cost of course, but it is still a damning statistic that is sure to have O’Leary’s biggest detractors choking into their lattes. email@example.com