I managed to get 60 seconds with Former Ryanair Executive, Kell Ryan to ask him a few questions about what makes Ryanair different and how the recent changes in competition, convergence and price will affect the airline.
How have you seen the Low Cost Airline Model evolve over the last 20 years?
Ryanair were the first Low cost Airline in Europe. There have been many copies but none as successful except Easyjet, Norwegian and Air Berlin. LCCs implement more changes than any other airlines and they do evolve especially as the become more mature in the market place. Ryanair have just changed by implementing seat allocation, extra hand baggage, easier website and so on.
What do you think of the current competitive environment in Europe? Is all this consolidation helping?
Europe has become much more competitive since the arrival of LCCs and I don’t believe consolidation helps unless you have a massive saving by joining 2 airlines. Having said that, IAG have been successful in their amalgamation with Iberia (having sorted out Union issues) and Vueling is working well as it operates with a high degree of autonomy.
What do you think are the fundamental reasons a low cost carrier can fail?
Not controlling their costs and not being true to the model. A massive number of Airlines have failed in the last 15/20 years. These airlines did not realize its just not about having low fares.
How far do you the see convergence between a low cost and legacy model going?
The LCC will always have the advantage and if they go down the road of trying to be closer to a legacy carrier they will fail. Likewise a Legacy carrier cannot match the LCC or try to get close as their costs will be too high and their productivity will never match LCC.
Is price still the key stimulant on most routes?
Low fares will always win out if the carriers are consistent with their product, fly on time, operate modern aircraft. People always want a bargain and Ryanair has proved it by carrying 80 Million passengers last year.
What do you think?