Wednesday, March 07, 2007
Pay for your ticket...and your bags
Observers of the airline industry have noted that Ryanair took the Southwest Airlines business model, dehydrated it of all its frills and now have an airline that is focused on moving passengers from A to B, even more so than Southwest, and that Ryanair may actually become a copied model in the future. While Southwest has had operating margins hovering near 10% or less, Ryanair can brag with margins consistently above 20%. Rumors have it that some US airlines are looking at the Ryanair model, such as Allegiant and Skybus. However, Spirit Airlines has decided to take one step closer to the Ryanair model. Click here and you can read their About Us page about their plans for charging for all checked baggage. Their business class service will cease to exist, while the more spacious seats up front will still be available. In the future passengers can pre-pay for their checked luggage. This is not the first time such a model has been implemented. People Express utilized this concept as well. It will be interesting to see how the consumer reacts. It might just be that future students of the industry will note how the Ryanair-model has influenced a new breed of airline.