Tuesday, February 02, 2010

Is Ryanair really still cheaper?

Something I've noticed lately is how Ryanair's hardpressed competitors have been engaging in tit-for-tat pricing policies which take advantage of what appears to be recent rises in the price structures for Ryanair flights.

Over the last few years Ryanair have engaged in a systematic campaign of separating out processes (such as check in) into paid-for services, some of which are avoidable - for example baggage or tickets printed at the desk, but increasingly some of which are unavoidable, like "online check-in" fees of 5 euros per flight and the notorious 5 euro card payment fee. Between the two of these, 20 euros can be added to the cost of a flight. Add bagagge and that total is an extra 50 euros.

Aer Arann are starting to run "happy hours" and sales and if you want a seat of your own and to bring your bags, not to mention the possibility of getting to transfer to the next flight, you can enjoy this now at a cheaper rate than many Ryanair flights, since many of the flights are around 74 euro for reasonable adavance booking and as little as 45 euro for sale prices. AA is on to a winner by not charging for Laser - indeed, this is a payment option not even offered to customers by Ryanair.

In fact I'm rather shocked at how much the Ryanair flights have risen by. For example I need to get from Cork to Dublin in May for a holiday. With Aer Arann its just 45 euros and my bags fly free. With Ryanair, on the same days, the equivalent is 80 euros - 30 euro for bags and 10 card charge regardless of whether I use my laser or mastercard. It does suggest to me that RA are either paying higher charges in that airport or else were previously running the service at a loss. Their flights per day are also down from 5 to 3, although I suspect they've turned their target instead to Aer Lingus and are now offering flights to Reus (which they pretend is near Barcelona), Malaga (now THAT is an excellent move - resort of choice for well heeled older passengers who will spend on the extras that make Ryanair profitable) and a couple of other places.

In fact, to be honest, its rather interesting that Ryanair have maintained an interest in the grey market - older people who are going to spend on the extras, although I suspect the Aer Lingus market is still strong.

In fact the strange thing is that my May trip is basically to connect to a pair of Aer Lingus flights on 6th and 11th May. Whats odd is that Ryanair has started on the same route (Gran Canaria) but on a more limited schedule, and oddly enough, more or less similar price structures. As it happens, I paid about 190 for my AL flight, but Ryanair couldn't offer me the same route on the same days, and the nearest is now 240 euros including charges and bagagge (AL also includes bagagge charges). It certainly seems odd to me that rather than starting more unique routes to regional cities, Ryanair are instead targeting existing routes, but no longer with cheaper fares! I wonder have they moved their strategy away from agressively pushing carriers off profitable routes to instead wearing them down over a long period of time?

In fact Ryanair's overall strategy seems to be moving away from the pile em high and sell them cheap to more targeted approaches to profitable routes. For example, when they pulled Manchester routes last year, claiming high charges, they failed to pull the DUB-MAN route which is apparently one of their busiest overall.

I suspect however, its their contentinental bases that are the real money earners right now. The Benelux region is a good example, as far as Hahn even. Ryanair have strong and well established bases well placed to tap into the Germanic adoration for the sea - much of these landlocked regions such as the area around the Mosel valley and Rhine valleys not only love their sunshine, but enjoy the novelty of a beach holiday. Likewise southern Belgium and Luxembourg. This is served by a bunch of Germanic airlines flying to places like Tenerife and Las Palmas, where middle aged nudists fart on white beaches whilst reading Bild.

These regions have suffered badly with the collapse of a number of traditional travel agencies offering package deals. Whats notable is that a huge chunk of the pricing on the deals appear to be the flights, and with at least one major player out of the business, it means less people going over and a massive drop in the options available. The first time I went to GC, you could get a package that left on either Saturday or Sunday from Cork. Now its really difficult to get a package even from Dublin that comes/goes on Sunday, so you are stuck with either going for 2 weeks for weekend events or suffering the disappointment of packing your bags just as the parades are starting and parties about to get into full swing. The mainstream companies REALLY badly handle this and fail completely to take advantage of niche opportunities based on these big ticket events. But it also hurts these events themselves - I suspect Pride Maspalomas suffers very badly if most of the holidaymakers from Ireland have to go home before the parade. Whats astonishing is they don't seem to notice.

Aer Lingus do fly out 2 times during the midweek and Ryanair have a Tuesday flight, so its certainly possible to self book and organize your own accomodation with a little entrepenurship, a credit card and an internet connection. Most of, if not all, of the common package resorts are bookable either independently or via hotel booking sites. You can even arrange a shuttle for yourself or else just hire a car or get a cab (the latter is definitely cheaper if you've 4 people travelling together). I notice this year a big jump in the number of B&B, half board and even full board deals online. I couldn't help noticing after I first took this route, that there was a huge gap between what I paid independently and what I paid for a package.

For example the first year, I paid about 650 for 2 people to travel via Cork for 7 nights in Jardin del Sol with transfers. To do the same trip this year would come to about 600 with a big of judicious flight price watching. Even without, it would come to the same.

The following year I went with a group and paid 540 for Corona Roja (not recommended) for a 2 bed apartment between 2. Now either my entire group were price gouged (or the entire group was cross-subsidizing one of the group who is financially utterly irresponsible but great at putting on the poor mouth and is willing to go on holiday while her mortgage is in arrears, which I increasingly suspect, looking at the very cheap rates for this place), but 2 people going there on Aer Lingus during a sale week with transfers should pay not more than 300 each for exactly the same package. HUGE gap. Incredibly, their site is advertising a STUDIO for 2 in the same place for 978 euro! People, this block charges only 150 a week for apartments - you're being ROYALLY ripped off!

For example one dealer in Dublin offers the Lopespan Meloneras for 1678 including flights. Sorry guys, but I can get you that, half board, for 200 less including transfers. Now thats interesting, because the margin here is way smaller than the margin on the example above. 100 per week per person compared to a whopping price gouge of 200 per week for the budget deal. But the interesting thing is that there are really very few deals sub 480 per person - it seems far better value to take a higher end hotel than an aging 1970s aparthotel.

Same must be going for the Costas, the Greek islands and the other resort areas dotted around the Mediterranean. The collapse of Budget Travel, Toolin Travel, Futura Gael, Globespan and other dotted agents and carriers has meant a narrowing of options for Irish people, particularly for more niche areas. However there is one shining light, AMI winner Sheila Fitzpatrick's Rainbow Retreats in Limerick, which has carefully put together a package that leaves on Tuesday 4th and returns on the 11th via Dublin. In other words, you get the whole pride weekend without needing to stay for 2 weeks. Well done Sheila on this one. Having gone there 3 years running, I cannot tell you how impossible it previously was to arrange a holiday through a tour operator without doing 2 weeks in order to get the whole weekend. Well Sheila has done it, I suspect with a little help from either Air Lingus or Ryanair. And if she's chartered her own airline, even better! Rainbow Retreats can be phoned at 061 481905 and I'm sure the lovely Sheila will only be too happy to help you out.

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