A cheap, fast flight plan for controlling the skies.
Ryanair NYSE RYAAY Ireland
| FY 01 Sales | $442 M
| FY 01 profit | $94.8M
| Market cap | $4.7 B
Budget airline
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British Airways, the queen of the European skies, lost $3 million a day during the last th ree months of 2001. During the same quarter, Irish upstart Ryanair turned a $25 million profit – on a fraction of BA's revenue. So what? So the days of the bloated, inefficient, state-sponsored airlines are numbered.
Amid government bailouts, thinning schedules, layoffs, and bankruptcy at most European air lines, Ryanair is soaring. A product of deregulation, the budget carrier builds upon the Southwest Airlines model: skimp on perks and fly a single model of jet out of secondary airports (Hahn instead of Frankfurt; Nykoping instead of Stockholm) to cut maintenance costs, slotting fees, and turnaround times.
The budget carrier also has made impressive use of the Web. Last year, 90 percent of Ryana ir's 10 million passengers – who paid as little as $15 to fly between 57 Western European cities – booked their seats online. Ryanair.com has become a profit center by offering rental cars and accommodations, allowing the company to slash marketing and distribution costs by 55 percent. The airline put $12 million toward a new flight training facility, which opened early this year, and is buying new aircraft. In January, 41-year-old Ryanair CEO Michael O'Leary announced plans to purchase 150 new Boeing 737-800s over the next decade.
O'Leary predicts that by 2008, Ryanair will carry 40 million passengers, roughly equal to BA's load today. "Our objective," he says, "is to become Europe's largest airline." To get there, he'll add a new hub and as many as 10 new routes per year. He also plans to push into Eastern Europe. BA and Scandinavia's SAS have both added no-frills service to compete on short-haul routes. But in a battle over Europe's airways, Ryanair seems to have the best flight plan. – B. A. Warner
