Cheap airlines who sell flights for 1 penny or less - how do they make any money?

Question

Airlines like Ryanair etc. who sell flights for £0.01 plus tax have always amazed me, how do they make their money? I know that not every seat goes for this amount on each flight but a lot do!

Answer 1

As others have already mentioned, airlines like Ryanair make their money through all other means possible.

I have an article from Fortune magazine about Ryanair where the CEO mentioned that it is Ryanair's aim to make flights free in the not to distant future and continue to develop their revenue model from other sources.

An example used was that rather than branding the airplanes with 'Ryanair' branding, they sell it as advertisement space to companies like Vodafone for 100,000 pounds for a year.

Every other service you require, be it luggage, food, drink, in-flight entertainment, will all be seen as key instruments to making this business model work.

It is very similar to other services you find on the web. Companies like Skype and Kazzaa offered a free service but were able to create revenue models from things such as ad space.

The future of many products is that it will be free. People are getting more and more creative and thinking of new ways of creating revenue from these offerings. It's a very exciting and real 'out-of-the-box' approach to business.

Keep asking these sorts of questions...they are great topics of discussion. :-)

Answer 2

They make their money on tax and raising the costs on other parts of their service. Ryanair for example charge for luggage which they say is to cut down on hold luggage (although not quite sure what they will do with the big hole in the plane left over, maybe its their new business class) charging per bit of luggage and putting in the small print that each person has to have their own bag and cannot share means they make a bit more making up the cost. also they only fly to certain destinations and have a high volume of flights, often one unloads as you wait to board. dont get me wrong flying with ryanair is still cheaper but the additional charges and taxes are the way they make up the money

Answer 3

The seats that do go for a penny hopefully, will bring some income from in-flight sales.

If a good impression is made, then perhaps the same perosn will use the same airline again at a proper price.

A few of the reasons.

Answer 4

i work for that airline. not all the seats are at that price, seats are sold at diffrent price levels. eg 50 sold at a penny 10 sold at £10 10 seats sold @ £100 etc.
They also make money from other charges. like if you want to check a bag in you have to pay for it £7. if you miss ya flt it will cost £50 and u get charged for every kg you are over on ya baggage
They also cut bk on things like u dont have food onboard unless you pay alot of money for it. no inflight movies etc.
we get alot of aggro from passnegers who dont read the terms and conditions which you should with every airline as if you dont stick to the rules you get extra charges like excess baggage!
if you pay a penny for ya flight then dont expect the world and be aware of these charges! sorry if im going on....

Answer 5

It is only a few seats that go for 1p the rest are a lot more expensive. The closer to the departure date the more expensive the tickets normally... They save money on Crew by having them flying turn arounds with no stop overs. Hope this explains a bit.

Answer 6

In flight advertising from outside companys, selling food, drink and a range of other products on board

Answer 7

there are only a small percentage of these are sold per flight, so with first class etc I am sure that make even.

Answer 8

I never heard of this...thanks for the info. It is amazing what companies could right-off these days.

Answer 9

food duty free. they only fill empty seats.

Answer 10

I don't know but try this out: http://www.routehunter.com

Cheers!