Abstract
Ryanair is best-known for its low fare. Most of the flights are worth, at worst, €1, at best, for free. Nonetheless, Ryanair is making huge profits, and has the highest profit margin of the airline industry (20% and more). Besides, it has average revenue per passenger more than 50 times higher than the price of a Paris-Glasgow (€1).
With growing passenger traffic at a fast pace, average revenue per passenger is still increasing due to rapid growth of its revenue. In 2008 (last financial year), it was €54/passenger with an increase of 2.5% (compound annual growth rate 2004-2008).
To explain this apparent inconsistency between the fares and the average revenue per passenger, I will analyze first what Ryanair names it's “Scheduled Revenues”, and then spend more time on its “Ancillary Revenues”, and finally explore the business model for this last category of revenues, and the central role played by the Internet website of the company, Ryanair.com.
