Airline loo-ney tunes, O'Leary-style

Ryanair's Michael O'Leary: Loo-ney plan or publicity generator?
Ryanair's Michael O'Leary: Loo-ney plan or publicity generator? Photo: Bloomberg

The boss of Europe’s biggest airline conceals a gleeful grin when he takes the local media for a ride every few months with an outlandish idea to generate some free advertising. He has been having terrific fun for most of this year manufacturing outrage over his “plan” to charge people to use an aircraft toilet.

There’s hardly a single feature about airline travel low-cost carriers can’t turn into a cash cow, so-called ancillary revenue, which is the serious idea behind Michael O’Leary’s antics. In fact, LCC managers boast that they can turn the traditional idea of paying for a ticket on its head: you can have the air fare for “free”, but everything else will cost: luggage, seat allocation, food, entertainment, paying with a credit card.

The key is that all of the services for which there is a charge, except for food and drink, have next to no residual cost. It’s a chargeable service because the airline says it is. And the airline’s charge, therefore, represents a monstrous case of price-gouging.

But the LCCs are so in love with the idea they can’t help themselves. In our own region, AirAsia showed what was possible in March this year when it reported $US500 million ($A492 million) net profit (two-thirds of it ancillary revenue) on $1.83 billion in turnover – an astronomical result in the airline business, which is used to miniscule margins.

So what does Michael O’Leary do for an encore after dunnygate? Well, there’s only one thing for it: we’ll abolish two of the three toilets on board Ryanair’s 737-800s and replace them with even more seats, leaving just one for emergencies.

Believe it or not, there’s no legal minimum number of toilets on a passenger aircraft: airlines make a judgment on how many they think they’ll need. Generally, the minimum the airlines allow is one toilet for 50 passengers, but the ratio is quite often better, especially on long-haul airlines.

O’Leary’s carrot for his latest brainstorm is cost. He told London’s Independent: “It would fundamentally lower air fares by about 5 per cent for all passengers” – cutting £2 ($3.10) from a typical £40 ($62) ticket.

The catch is that Ryanair’s 737s, which seat 189 people, are already maxed out on so-called exit limits – the maximum permissible number of seats for the aircraft’s number of doors.

“We’re trying to push Boeing to re-certify the aircraft for six more seats, particularly for short-haul flights,” O’Leary said. “We very rarely use all three toilets on board our aircraft anyway.”

Boeing is playing along, never knowing whether O’Leary is serious. A spokesman at Boeing HQ in Seattle told The Independent: “We're always listening to what our customers need but don't discuss those conversations or any business decisions.”

The prospect of only one toilet being shared by up to 195-201 passengers and six crew caused alarmed in the UK travel industry. A spokesman for the travel agents association, Abta: said “We all know how inconvenient it can be if a toilet on a plane is out of order or the annoyance of queuing if someone has air sickness in one of the cubicles. This move could be a step too far in Ryanair’s on-going mission to provide a totally no-frills service.”

But The Independent also quoted an aviation consultant, John Strickland, who said the soaring cost of oil could accelerate the process: “High fuel prices are making it difficult for even Ryanair to keep fares low, so anything which helps them to reduce costs is essential. Having six more seats on the aircraft would not require more cabin crew and would reduce cost per seat.”

Ryanair is already in hot water over its price-gouging on credit cards. The airline charges an “administration fee” of £6 ($9.30) per person per  flight, avoidable only by paying with Ryanair’s “Cash Passport”.

The British Office of Fair Trading is investigating a “super-complaint” by the UK Consumers’ Association into charges by low-cost airlines. “Retailers should make headline prices meaningful for comparison purposes by not imposing surcharges for debit cards, which we consider are currently the standard online payment mechanism,” the OFT says.

But O’Leary is defiant. Asked whether a £40 fare to Spain would in future be shown as £46, to take account of the £6 charge for paying with debit or credit cards, Mr O’Leary said: “It will be shown as £40 with a big asterisk: ‘Pay by the Ryanair Cash Passport’. There’s the impression created abroad that it would be an end of credit and debit fees, or Ryanair’s admin fees. There won’t be any change whatsoever.”

Ever-higher charges and ripping out toilets to fit more seats appear to be off the agenda for the time being in Australia. At the cheap end of the market, Jetstar is preoccupied with starting its new domestic offshoot in Japan and Tiger is operating on autopilot while it awaits the arrival of its first Australian chief executive after four years in Australia.

Andrew David, the former chief operating officer at Virgin Blue, is expected to continue Tiger’s push to improve reliability. After it resumed flying on August 12, Tiger went from being the most unreliable airline in Australia to the most reliable, with 93.4% of flights in its limited schedule arriving on-time in the rest of August.

Have we got low-cost travel about right in Australia for the money being charged? Have you flown Ryanair or other LCCs around the world? Which direction should Tiger take as the Australia price leader: cheaper or better?

 

 

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