RYANAIR LEADING EUROPE’S LOW FARES REVOLUTION
Europe’s No 1. Low Fares Airline
Lowest Fares and Lowest Costs in Europe No. 1 for traffic – 27.5 passengers this year No.1 for passenger growth No. 1 for European Routes (190) and Bases (11) No. 1 for Customer Service delivery
• No.1 for punctuality
PAX
Ryanair’s Traffic Growth
28 24 20 16 12 8 4 0 95 96 97 98 99 00 01 02 03 04 '05
Forecast ‘05
1995 - 2004
Europe’s Largest International Scheduled Carriers
30
PAX in millions
25 20 15 10 5 0
Lufthansa Ryanair BA AF KLM SAS Swiss Iberia Alitalia Austrian Aer Lingus
Source: IATA Members Statistics 2003 and Ryanair current year forecast
Ryanair No.1 for lowest fares
Ryanair Easyjet Air Berlin Deutsche BA Iberia Alitalia Air France Lufthansa British Airways
High Low
€ 39 € 62 € 93 € 111 € 141 € 183 € 216 € 225 € 268 59% 138% 185% 262% 369% 454% 477% 587%
Ryanair is No. 1 for Customer Service
Airline % On Time* Bags missing per % 1,000 passengers completions
Ryanair SAS Lufthansa Alitalia Air France Austrian Easyjet British Airways
91.5 87.8 85.9 84.5 82.9 79.4 77.0 73.6
0.64 15.6 15.8 17.0 14.9 15.1 RTP 22.3
99.8 99.6 99.2 99.3 98.9 99.3 RTP 99.2
•Flights arriving within 15 minutes of STA. Validated by CAA 3 months in arrears Source: Ryanair monthly stats compared to Association of Europea n Airlines: July 2004
RTP = Refuse to Publish
Ryanair is No. 1 for Productivity
Pax per Employee 10,050 6,293 1,540 1,281 1,000 978 959 898 758 Productivi ty Gap 60% 552% 685% 905% 928% 948% 1,020% 1,225% Ryanair easyJet Aer Lingus Lufthansa Germanwings Iberia Alitalia SAS British Airways
Capacity Allocation
Historical Capacity Allocation
Lowest cost airport received routes – still fundamental principle Lowest cost airport won base deal – still fundamental principle Seat capacity growth in 2003/4 in excess of 50% New routes accounted for over 80% of growth Number of routes doubled in less than 12 months New routes loaded with 6 weeks advance notice Load factor decline yoy of 6%, 9%, 7%, 5%, 4%, 3%
Lessons Learned
Marginal routes closed and problem airports cut Ongoing review of capacity allocations and network Small team on sales and marketing side, resources = cost Launch at higher fare and PR on each price reduction scrapped Massive price attrition due to late launch dates Marketing spend in new bases / markets unjustified Net result – strategic decisions taken earlier means less risk
Measured Capacity Growth for 04 / 05
London Stansted – 2 new aircraft, all 800 base, 7 new routes London Luton – 4 x 800 base, 9 new routes Rome – 2 new aircraft, 7 new routes Stockholm – 1 new aircraft, 3 new routes Milan Bergamo – 2 new aircraft, 7 new routes Frankfurt Hahn - 1 new aircraft, 4 new routes Glasgow Prestwick – 1 new aircraft, 4 new routes
London Stansted – Europe; 36 aircraft
London Luton – Europe; 4 aircraft
Brussels Charleroi; 3 aircraft
Frankfurt Hahn; 6 aircraft
Rome Ciampino; 4 aircraft
Stockholm Skavsta; 4 aircraft
Milan Bergamo; 5 aircraft
Rome Ciampino; 4 aircraft
Barcelona Girona; 3 aircraft
Further Announcements
Further unallocated capacity for 2005 29 aircraft from September to March this year (10 out) 25 aircraft from September to March next year (9 out) Bases with less than 5 aircraft (LTN / GRO / CRL) Opportunity for 1 / 2 new bases front half of year UK regions, Spain, Germany, France, Italy all possible Reverse flights into Stansted (30+) a possibility
Outlook for fiscal 2005 Continuing fare wars throughout fiscal 2005 RYA to drive airfares lower – underpins growth, beats competition Capacity growth slows to 16% in H2 (737-300’s gone in Nov) Yield declines of 5% - 20% subject to sterling
•Q2 – Approx -5% to -10% •H2 – Approx -10% to -20%
Fuel Hedging – position unchanged Strong revenue and profits from ancillaries Bloodbath this winter – Lowest Cost Wins
Other Developments
800th 737- 800 for Luton – Dreamliner Colours
INFLIGHT ENTERTAINMENT SYSTEM
RYANAIR LAUNCH INFLIGHT ENTERTAINMENT SYSTEM 1st LFA to launch inflight entertainment Movies/Cartoons/Videos/Classics/Games Personal console delivered to each seat High definition picture and sound quality Intro on board 1st November / Systemwide 1st April Intro price of £5 / €7 Revenue potential – target of €0.50 per pax - €14m in one year
€100,000 prize draw, 1st Low Cost Airline
Ryanair - Summary
Europe’s lowest cost carrier – lowest cost wins Lowest fares, record margins continue Industry leading customer service delivery – World first IFE Return to “normal” growth rate (20%) this year New airports and bases ready 100+ new aircraft facilitates growth to 50m pax Lowest costs & lower fares delivers controlled profitable growth