Ryanair 0 Hungary 1

A couple of weeks ago I suggested that Ryanair’s campaign against Wizzair was likely to misfire.

It was one thing to establish several new routes from Budapest as soon as the flag carrier, Malev closed but to start a vicious war with the country’s only other airline at the same time was asking for trouble.

They attacked Wizzair on two fronts. Firstly, they suggested that the company’s finances were in bad shape and, secondly, they complained to Brussels that the company does not qualify for European traffic rights since its ownership is mysterious and involves a number of holding companies.

Hungarians are fiercely nationalistic at the best of times, and are going through a particularly acute stage of this at the moment. Putting the boot into their only other airline within days of the demise of their flag-carrier was certain to provoke a reaction.

Ryanair has now been forced to cancel a number of flights from Budapest because the authorities suddenly insisted that all Ryanair crew transiting the airport have to leave the aircraft and go through security and passport control. It all sounds rather trumped-up but the excuse was confusion about Ryanair’s Budapest crew being paid in Ireland and being subject to Irish, rather than Hungarian rules.

The way for Ryanair to establish themselves in Hungary is through offering competitive fares. Unfortunately, despite the headline fares, Ryanair are nowhere near as cheap as they pretend. Trying to compete with Wizzair by using dirty tricks might have seemed a good idea but it was doomed to failure.

What are Ryanair up to with Wizzair?

It is not unusual for Ryanair to knock competitors so the recent attacks on Wizzair are hardly a surprise but I wonder if there is some big plan behind their current campaign or if it is just another shoot-from-the-hip escapade which might back-fire.

With the bankruptcy of Malev, both Wizzair and Ryanair have been announcing new routes from Budapest. Normally, budget airlines like to steer well clear of each other but, this time, Ryanair and Wizz are head-to-head against one another.

Wizzair has moved fastest, as is only to be expected. It has an established base in Budapest and so increasing services is not a big issue.

Ryanair has launched a flurry of publicity attacking Wizzair on two fronts. Firstly, they are publicising figures which appear to show the company is losing money. Secondly, they have lodged a complaint with the EU about the ultimate ownership of Wizz, claiming it does not qualify as an EU carrier.

This could do Ryanair more harm than good in the Hungarian market. The Hungarians are fiercely patriotic and are not pleased at the demise of their flag-carrier. Wizz is, officially, a Hungarian airline and certainly employs many Hungarian staff. Will the Hungarian public be impressed by a foreign company trying to bad-mouth its last remaining airline and a major local employer?

Wizz’s ownership and its profit or loss are definitely complicated. There are numerous holding companies in Malta and Switzerland and mysterious shareholders. The company has never really come clean about who owns it and divulges the bare minimum of information on its financial performance. With so many intermediate holding companies, it is quite possible that the company is actually highly profitable and money is merely being tucked away somewhere. Or maybe the same mechanism is being used to disguise much bigger losses. Who knows?

Well, Ryanair might just know a little bit more than they are letting on.

Rumour has it that one of Ryanair’s larger shareholders is (or, more likely, was) a shareholder in Wizz. 

The current campaign against Wizz is either more of the usual Ryanair publicity-seeking nonsense or an altogether more Machiavellian game. Whichever way, it could still rebound on them rather badly.

Quote of the Week

“I think we annoy people who don’t fly with us more than we annoy people who fly with us”

Ben Baldanza, CEO of US budget airline, Spirit Airlines

It is true that Spirit generate an awful lot of column inches in the US about their aggressive pricing and range of additional fees. The fact remains that enough people appear to like them to keep the airline flying and expanding.

Exactly the same could be said of Ryanair…

Ryanair have the last laugh

If you thought the video clip below was funny, you might be less amused to know that from Monday, Ryanair will add yet another surcharge of €2 per ticket to cover costs they have to pay under the EU 261 regulation which covers costs for delayed and bumped passengers.

Many a true word…

Even feckin’ fans of Ryanair (feck ‘em) will enjoy this:

Ryanair reaps what it sows

Last week it was reported that approximately 100 passengers were denied travel on a Ryanair flight from Lanzarote to Belgium. The local paper, La Provincia, said the disruption happened when the airline tried to charge one passenger extra for carry-on baggage and his friends – a group of students – already on board the plane, “mutinied.”

After police intervention, all 168 passengers were ordered off the plane and only 64 were allowed to re-board the flight. The rest had to find other carriers and some spent the night on Lanzarote.

Ryanair confirmed the passengers “became disruptive and refused to comply with crew instructions” after a requirement to pay a gate bag fee “for outsized luggage.”

While not wishing to condone irrational, hotheaded and inebriated behaviour, I have some sympathy with those that feel Ryanair reaps what it sows. First, let’s not forget that what is “outsize” for Ryanair is slightly smaller than “outsize” for most other frill-free airlines. Compare 55 x 40 x 20cms, 10kg weight at Ryanair, with 56 x 45 x 25cms, no weight limit (if you can carry it) at easyJet, 56 x 45 x 25cm, 10kg weight on Jet2, 55 x 40 x 20cms, 10kg weight, PLUS reading matter etc on WizzAir, and 55 x 40 x 22cms, 10kg weight on Norwegian. Only bmibaby appears to be as stingy as Ryanair, but then it is considerably more generous with checked baggage allowances. Flybe allows less, but then is flying significantly smaller planes.

Secondly, it would appear that Ryanair was charging the extra fee, not at check-in, but at the gate. this is a comparatively new development and frankly I’m surprised that airlines are allowed to do it. Gate formalities are all about proving you are the same person as the name on your ticket, and even in this blasé day and age, there is still a frisson of increased tension when after god knows how long waiting you are finally going to get on your plane. The risk of last-minute charges runs contrary to expectations.

But it gets worse. To be held up by others or being stopped yourself does not a relaxed traveller make – you might suppose that an airline wouldn’t think it was worth the confrontation and ill-feeling. But not Ryanair – because their staff get a slice of the revenue they take!

Ryanair’s CEO Michael O’Leary was asked in a recent Irish Times article whether Ryanair “incentivises” its ground staff to hit people with excess baggage charges? “No,” he said, before pausing. “They do get a share of revenues to make sure they implement our policies,” he said, adding this could not be considered an incentive.

What are Ryanair up to?

Ryanair are famous for making outrageous claims about what they will do next. In most cases, these are just cheap publicity stunts and should be ignored. However, when they hold a confidential briefing for some of their leading investors, their words should be taken much more seriously – deliberately misleading these people could have grave consequences.

On Wednesday they had an investors’ day and, whilst the airline has not commented publicly, some of those present have given brief details of what was said.

It is no secret that the airline intends to slow its rate of growth. Nor is is a secret that they will have to move into slightly different markets to keep up even a modest rate of expansion. They already fly from Gatwick and Madrid and are starting operations at Barcelona so  flying to other, similar airports (except Europe’s big four) is hardly a change of direction. Naturally, as services to these airports increase, there will be an impact on costs, as well as average ticket prices.

However, the airline also said their costs would be impacted by “service enhancements” and this really has got me confused.

The whole point of Ryanair is that it gets away with the minimum service possible. Surely they do not mean giving free drinks, increasing baggage allowances or making the seating more comfortable. What can they mean?

There are many who will not fly with Ryanair, either because they have flown  with them once and did not like it, or because they have been scared away by the bad publicity. However, there are many more who are happy to fly with the airline and appreciate its low fares and – generally – efficient service. Personally, I am in neither camp because, very often, I find their fares are too high for the level of service offered. I might fly with them for £35 (all charges included) but when the fare creeps up to £100, I can normally find an airline that offers better service for the money. Maybe the airline agrees and feels that if it is going to have to increase its fares by flying to more expensive airports, it will have to offer something in return.

This does not sound very much like Ryanair though, does it?

Maybe the mystery will be solved in due course but any suggestions as to what they mean by “service enhancements” would be received with interest!

Ryanair exacerbating Ireland's passport crisis?

Dominic Hannigan, a senator in the Irish Parliament, has suggested that Ryanair should temporarily drop its requirement for all  travellers to have passports, to alleviate the backlog of almost 50,000 applications clogging up the passport office due to industrial action. Around 40% of Irish air passengers are travelling to the UK, and passports are not legally required – a driving licence, for instance, is perfectly adequate. how do we rate the chances of any co-operation? Not great, unless of course passengers switch to other airlines in significant numbers.

Ryanair's spot of Italian bother

A story rumbling around in the background of the festive season has been Ryanair’s row with the Italian government over ID requirements on its Italian domestic services. The airline is threatening to stop domestic flights in Italy from 23rd January amid a dispute with the country’s authorities over new rules on ID documents that passengers must show before boarding. Last month, Italy’s civil aviation authority ordered all airlines to accept driving licences, government badges and hunting licences amongst other documents to identify passengers at boarding gates for domestic flights. Ryanair responded that the documents on the government list were less secure and threatened flight security. Ryanair says that because it operates a near 100% online check-in system, passengers are asked at booking time to show their passport or identity card before boarding. BusinessWeek has the full story.

So what is going on here? It would be entirely true to form if a substantial part of the Italian civil aviation authority’s motivation is to defend the position of Italy’s own airlines – all of whom would happily accept your DVD rental card as valid ID. But what of Ryanair’s selflessness? Some might say that its stringent ID requirements, required by the airline wherever it operates, have actually quite a lot to do with stopping individuals reselling surplus tickets through auction sites, and companies bulk-buying cheap tickets months in advance on routes frequently flown by their employees.

Whatever the motivation it could get nasty. Both sides in the Italian row seem to be digging in, and Ryanair’s Italian network is fairly substantial.

In other Ryanair news it was amusing to see the UK’s OFT chief slamming the airline’s fees for online card payments as “puerile”. If the OFT honcho fully appreciated the attractions of the prepaid debit card that Ryanair will accept without fee, he might have been a little more charitable.

Caxton FX prepaid card rated best

Today’s Guardian agrees with our editor and rates Caxton FX’s prepaid debit card the best of the bunch:

“The best we could find was the Caxton FX Global Card, which has no application fee or monthly charge. It’s also free to load money on to the card. The only cost is a flat £1.50 every time you use it in the UK. So if you spend £60 on two Ryanair flights, the cost will be just £1.50.”

Our previous post is here. If you are a UK resident, you can apply for one here.