Curiosity brought me to take a look to the P&L summary of Ryanair, Easyjet and Lufthansa. By a quick analysis we can see that there are 2 main revenues perceived by the three airlines, the called "scheduled revenues" and the "ancillary revenues". The first ones represent the traditional ticket selling revenues, and the others are baggages fees, marketing on web pages, sells on board... and other revenues not coming from tickets.
Message is clear, no airline is able to make profit without ancillary revenues (in Ryanair you will need to include financial losses to get losses) and they represent one of the main contribution to the revenues being an important percentage of total revenues, more precisely: Ryanair (2011) 18,7%, Easyjet (2009) 20,7% and Lufthansa (2011) 17,2%.
Finally, to give some small completion to my analysis I also made a small analysis of subsidies from European Goverments to Ryanair, the total amount spent in Europe towards the airline was 760 million euros and 100 were spent in Spain. That means a 22,3% of tickets selling prices. Wow!
What's that number for a passenger? Well, the total number of passengers of Ryanair during 2011 was 32,3 millions in Spain. That means for a return ticket (passenger is counted twice) is a total subsidy of 6,2 euros. I don't see this as a real incentive to travel to Spain, when can be done more efficiently by reducing the cost of coaches to the main city.
My opinion is always that subsidies are always a very good incentive to create vey bad businesses, reduce competence and keep prices really high. I don't support this situation, knowing also that Europe is currently suffering a long term crisis. My message: stop subsidies.
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