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Ryanair CEO says New Frontier Airlines’ business class is stupid.he is thinking sloppily
Ryanair CEO Michael O’Leary is a brash, outspoken man who is sometimes described as a “truth teller”, but in reality he frequently exaggerates. He has been talking for years about allowing passengers to fly standing up, charging them to use the restroom, and charging passengers to pay for the flight.When he’s out of the spotlight, he always says something outlandish to attract attention. how cheap is it Ryanair, even if he did not comply (and in many cases even if the regulators would never forgive him).
U.S. ultra-low-cost airline Frontier Airlines is adding European-style business class seats, with seats at the front of the plane with extra legroom so passengers can buy the seat next to them while it’s empty. It will be.
- They call it “Upfront Plus”
- It is a paid airline that sells options to passengers for an additional fee.
- This is no different from what other airlines do, as it is common for passengers to be able to purchase additional seats.
In fact, this is great in a way, as you may be able to sell an empty middle seat for an additional fee for both the aisle and window seats in the row.
But O’Leary predicts that’s foolish and won’t last long. That’s because when you sell a seat to someone who’s already on the plane, you’re not only giving up the fare for that seat from another passenger, you’re also giving up all the fees you can charge. That passenger too.
Bullshit! Actually, it makes no sense. I’m selling the middle seat. The idea of selling for an additional fee is nonsense. We want to sell all aisle, middle, and window seats…Selling all seats also gives us the opportunity to sell snacks, coffee, sandwiches, and scratch cards to someone. [Consider] Ancillary income. Last year’s average revenue for the fair was around 44 euros ($47.80), while ancillary revenue per passenger was closer to 21-22 euros ($22.81-23.90).
Mr. O’Leary’s airline plans to sell tickets for next to nothing in order to achieve completely full flights. And he has something to consider, because in the special case where the flight is completely sold out, it’s actually a trade-off to filling that seat with another passenger.
But O’Leary has a sloppy idea.
- If the plane is full, it doesn’t make sense to sell additional seats just for the average fare. There will be a net negative return.
- However, it is natural to sell seats if there are seats available.and can control both When offering additional seats and again at what price.
- While it’s possible that Frontier will make some mistakes in revenue management, there’s nothing inherently wrong with this idea. If managed correctly, it will increase your net revenue.
If Frontier sold this on flights that were not completely full, this would be a 100% increase in revenue. If you are selling on a fully booked flight, your price must be at least the fare plus fees. Failure to do so will result in losses.
And Frontier is quickly making changes to its product and route network because it isn’t filling its planes with high enough fares and fees to make a positive profit. The margins they currently maintain are not what Mr. O’Leary claims. This is just an ancillary fee, but since you are selling a scarce resource, you need to manage your revenue correctly. And at the moment, for Frontier, it’s not that rare.
Detail of the view from the wing
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