Revenues Justify Ryanair`s Fleet-wide IFE Installation

Aviation Week & Space Technology

12/06/2004, page 43

Douglas Barrie

London

Cut-Price Entertainment

Ryanair`s dabbling in the inflight entertainment world is now promising to pay handsome dividends, with the airline aiming to have IFE systems across its fleet by April 2005.

Michael O`Leary, Ryanair`s CEO, says investment in inflight entertainment (IFE) would be recouped if there was a minimum 3% uptake among passengers over a 12-month period. In the first four weeks of a six-aircraft trial, the average has been 30%, he says.

The hand-held system is offered to Ryanair passengers at an equivalent charge of $9.50 per flight. O`Leary identifies IFE as a potentially lucrative revenue stream for his company. He also recommends that other low-cost carriers introduce IFE. Passengers are showing interest despite the relatively short routes flown by Ryanair. O`Leary says IFE rentals are slightly lower on flights of approximately 1 hr. This, however, is offset by slightly higher figures on longer routes.

While Ryanair may be adopting something first introduced among the ``high-cost carriers,`` O`Leary delights in goading, other elements of the latter`s business remain beyond the pale. While IFE offers revenue-generation, freight and mail carriage are not on the agenda. ``I wouldn`t touch freight or mail with a barge pole,`` he says. Both would threaten the airline`s rapid aircraft turnaround times, which form a crucial part of its performance. ``We are working to get rid of all bags,`` O`Leary says.

The airline has been considering the introduction of a charge for hold luggage in order to encourage as many passengers as possible to travel with hand luggage only. The aim would again be to cut costs and time penalties associated with baggage handling.