Ryanair 2010 Annual Report Download - page 64

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that may come into effect in the future. However, there can be no assurance that the FAA or other regulatory
authorities will not recommend or require other safety-related undertakings that could adversely impact the
Company’s results of operations or financial condition. See “Item 3. Key Information—Risk Factors—Safety-
Related Undertakings Could Affect the Company’s Results.”
ANCILLARY SERVICES
Ryanair provides various ancillary services and engages in other activities connected with its core air
passenger service, including non-flight scheduled services, Internet-related services, and the in-flight sale of
beverages, food, and merchandise. See “Item 5. Operating and Financial Review and Prospects—Results of
Operations—Fiscal Year 2010 Compared with Fiscal Year 2009—Ancillary Revenues” for additional
information.
As part of its non-flight scheduled and Internet-related services Ryanair incentivises ground service
providers at all of the airports it serves to levy correct excess baggage charges for any baggage that exceeds
Ryanair’s published baggage allowances and to collect these charges in accordance with Ryanair’s standard
terms and conditions. Excess baggage charges are recorded as non-flight scheduled revenue.
Ryanair primarily distributes accommodation services and travel insurance through its website. For
hotel services, Ryanair has a contract with Booking.com, pursuant to which Booking.com handles all aspects of
such services marketed through Ryanair’s website and pays a fee to Ryanair. Ryanair also has contracts with
other accommodation providers that enable Ryanair to offer camping, hostel, bed-and-breakfast, guesthouse,
villa and apartment accommodation to its customers. In addition Ryanair has a contract with the Hertz
Corporation (“Hertz”), pursuant to which Hertz handles all car rental services marketed through Ryanair’s
website or telephone reservation system. Hertz pays a per-passenger fee to Ryanair. Ryanair also sells cruises
online and bus and rail tickets onboard its aircraft and through its website. Costa Cruises handles all cruise
bookings made via Ryanair’s website and pays Ryanair a fixed fee.
Ryanair sells gift vouchers on its website. Such gift vouchers are also redeemable online. In May 2009,
Ryanair started to offer its passengers the possibility of receiving an SMS (text message) when booking, at a fee
of £1 or 11, to inform them of their flight confirmation details.
In April 2009, Ryanair signed a contract with Webloyalty International Ltd, which offers Ryanair’s
customers who have a UK, German or French billing address a retail discount and cash-back programme. In
February 2009, Ryanair introduced Google Adsense to its search results pages in order to monetize the traffic
levels that those pages generate. In March 2009, Ryanair expanded further into the area of third-party Internet
advertising with the introduction of third-party display advertising on the homepages in the UK and Ireland.
Ryanair has entered into agreements pursuant to which the Company promotes Ryanair-branded credit
cards issued by MBNA, GE Money and Banco Santander onboard its aircraft and on its Internet site. The
MBNA agreement relates to Irish residents only, the GE Money agreement relates to Swedish and Polish
residents only and the Banco Santander agreement relates to UK residents only. Ryanair generates revenue from
MBNA, GE Capital and Banco Santander on the basis of the number of cards issued and the revenues generated
through the use of the credit cards.
In April 2008, Ryanair entered into a contract with On Air, a provider of mobile voice and data
solutions for aircraft, for the provision of an in-flight communications service that allowed Ryanair passengers
to use mobile phone and electronic communication devices such as Blackberries™ while onboard Ryanair
aircraft. Ryanair bore the cost of its installation on Ryanair aircraft. Ryanair received commissions on mobile
calls made and text messages and emails sent using the service, which were billed to customers based on
international roaming rates. On March 29, 2010, On Air notified Ryanair of its intention to terminate the
contract. Ryanair was pleased with the system performance and passenger usage and had notified On Air of its
wish to roll out the service across the entire fleet. On Air was unwilling to commit to this expense and exercised
its right to terminate. Ryanair plans to invite other providers of similar services to tender for the business.
Ryanair has recently commenced a rollout of handheld Electronic Point of Sale (“EPOS”) devices
across its route network. These EPOS devices will replace the existing manual and paper based systems on
board the aircraft. The EPOS device will enable cabin crew to sell and record their on-board sales transactions
more efficiently and generate vastly improved management sales reporting. The device will also be able to issue