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Crazy budget airlines in Europe
http://www.theglobeandmail.com/serv...Story/Business/
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$20 flights remake Europe
By DOUG SAUNDERS
Friday, January 13, 2006 Posted at 4:13 AM EST
From Friday's Globe and Mail
STANSTEAD, ENGLAND — I have clawed, shoved and elbowed my way through the herd of ticket-holding passengers and managed to get aboard Ryanair Flight 8405. It will take me from Stanstead Airport, on London's far northern outskirts, to an old military airbase outside of Wroclaw, Poland, a city that had not been served by any airline until this Irish-based carrier showed up.
There is no reserved seating on Ryanair flights -- each departure is a cattle call, and not all ticket holders will get a seat. Nor, I am reminded as I throw myself into the first bright yellow seat I can find on this brand-new Airbus jet, are there such amenities as magazine pouches or trays on the seatback (it's cheaper to clean the planes without them).
I have paid the equivalent of $280 for this return flight, about a third what conventional airlines would charge me on two days' notice (if they even flew to Wroclaw). Taking a survey of the passengers around me, with the help of my Polish-speaking seatmate, it becomes apparent that nobody else on the plane has paid this much. The man beside me paid $60 return. The young couple in the row in front of me, along with dozens more people on this flight, got their tickets for $20 return. There are three or four people who paid less than $2.
All of us made our bookings, at different times, on the Ryanair Website, which uses complex price-structure calculations to ensure that every seat on every flight is sold for the highest price that can be obtained -- even if it's a few cents.
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This algorithm (similar to the one used by its competitor Easyjet) last year turned Ryanair into the most successful airline in Europe. And that success has transformed the European economy in ways that are only beginning to be understood.
Last year was a watershed: These budget airlines actually became more popular, and far more profitable, than even the most successful commercial airlines.
Ryanair, whose ticket sales on its short European routes overtook the entire worldwide network of British Airways to become Europe's largest carrier, moved 35 million people across 21 European countries on its 266 routes; Easyjet moved another 30 million across 187 routes.
Those routes avoid the two mainstays of the commercial airline: The central hub (all Ryanair and Easyjet flights are point-to-point) and the conventional airport -- almost all their flights go to obscure secondary airports, some of which were created, or revived, by Ryanair.
In a year during which airlines all over the world were devastated by doubling fuel costs and drooping margins, these budget carriers saw their revenues increase -- by 33 per cent (for Ryanair) and 21.8 per cent (for Easyjet).
Their profitability has created what Ryanair founder Michael O'Leary calls a "bloodbath" of mergers and takeovers: This year is likely to see Europe's 50 cut-rate airlines consolidate into a couple of major groups.
Easyjet, the first and most famous, is currently facing a friendly takeover bid from Iceland's FL Group.
The conventional airlines, which have not been buoyed by rising passenger numbers and have been battered by high fuel costs, are doing the only thing they can: Emulating Ryanair. This month, British Airways launched its own budget carrier, BA Connect, that will offer seats on 50 European routes for as little as $50 one-way in uncharacteristically no-frills fashion. Observers are watching this with a skeptical eye, since BA's high labour costs and monolithic reservations system are hardly the sort of vehicle for emulating Ryanair's success.
But even more profound than the business revolution has been the effect of $20 flights on the larger economy of Europe.
In the British media, Ryanair and Easyjet are seen mostly as the inventors of the working-class European vacation. That's true enough: By making flights affordable, and creating new destinations by opening obscure airports, they have changed the face of holiday travel. First Prague, then Slovenia, and now Lithuania have become favourite weekend destinations for beer-seeking Brits (and, indeed, Londoners have found that flying to Slovenia on Ryanair is actually cheaper than taking the train to a nearby English city).
But there is another story behind Ryanair, and it can be seen this morning on Flight 8405. Only a handful of people on this plane, including me, are not Polish. Last year, Ryanair expanded its timetable from a single Polish destination to 11, and the Polish routes are among its most successful.
It is not that Britons have discovered the tourist joys of Silesia -- they haven't (although they should -- it is one of Europe's best-kept tourist secrets). It is that Poles have discovered the economic joys of working in Britain.
Last year, Ryanair carried a million Poles to Britain, almost all of them for jobs in the service industry; Easyjet carried hundreds of thousands.
I talk to Bozena, 33, who works as a cleaning lady in London, earning as much as $1,000 a week -- the sort of salary that even doctors don't earn in Poland. She "lives" in Poland, flying back once a month to see her three children, who are in the care of her mother. When in London, she shares a small flat with two other women. Almost everyone on this flight has a similar story.
Women like Bozena are at the heart of the new Ryanair economy. Britain, whose unemployment rate is far below the level usually considered "zero," needs about 400,000 extra foreign workers a year just to keep its economy running. Ireland is in a similar position. But rather than immigrate, a great many workers keep their homes in Eastern Europe and commute on cut-rate flights -- a lifestyle that was once the preserve of CEOs, and is now available for cleaning ladies.
As we land in western Poland, there is a round of applause: Europe's reserve army of labour has returned from the front for some much-needed rest and relaxation. It is a smooth flight, and a small part of an economic miracle. |
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| quote: | Originally posted by chinamon
not true. i say "ugh"
but i am a tranny. |
| quote: | Originally posted by kotsy
lol colour me retarded |
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