Ryanair 2016 Annual Report Download - page 69

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reserves to the income statement. Ryanair generated an average booked passenger load factor of approximately 93% in
fiscal 2016, compared to 88% in fiscal 2015, and average booked passenger fare of €46.67 per passenger in the 2016 fiscal
year, down from €47.05 in the prior fiscal year. The Company has focused on maintaining low operating costs (€47.69 per
passenger in the 2016 fiscal year, a decrease from €50.92 in fiscal 2015).
The market’s acceptance of Ryanair’s low-fares service is reflected in the “Ryanair Effect” – Ryanair’s history
of stimulating significant annual passenger traffic growth on the routes on which it has commenced service since 1991.
For example, the number of scheduled airline passengers traveling on Ryanair routes increased from 0.7 million passengers
in 1991 to 106.4 million passengers in fiscal 2016. Most international routes Ryanair has begun serving since 1991 have
recorded significant traffic growth in the period following Ryanair’s commencement of service, with Ryanair capturing
the largest portion of such growth on each route. A variety of factors contributed to this increase in air passenger traffic,
including the relative strength of the Irish, U.K., and European economies in past years. However, management believes
that the most significant factors driving such growth across all its European routes have been Ryanair’s low-fares policy
and its superiority to its competitors in terms of flight punctuality, levels of lost baggage, and rates of flight cancellations.
The address of Ryanair Holdings’ registered office is: c/o Ryanair Limited, Dublin Office, Airside Business Park,
Swords, County Dublin, K67 NY94, Ireland. The Company’s contact person regarding this Annual Report on Form 20-F
is: Neil Sorahan, Chief Financial Officer (same address as above). The telephone number is [phone]. Under its
current Articles, Ryanair Holdings has an unlimited corporate duration.
STRATEGY
Ryanair’s objective is to firmly establish itself as Europe’s biggest scheduled passenger airline, through continued
improvements and expanded offerings of its low-fares service. In the highly challenging current operating environment,
Ryanair seeks to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-
containment and operating efficiencies. The key elements of Ryanair’s long-term strategy are:
Low Fares. Ryanair’s low fares are designed to stimulate demand, particularly from fare-conscious leisure and
business travelers who might otherwise use alternative forms of transportation or choose not to travel at all. Ryanair sells
seats on a one-way basis, thus eliminating minimum stay requirements from all travel on Ryanair scheduled services.
Ryanair sets fares on the basis of the demand for particular flights and by reference to the period remaining to the date of
departure of the flight, with higher fares typically charged on flights with higher levels of demand and for bookings made
nearer to the date of departure. Ryanair also periodically runs special promotional fare campaigns. See “—Route System,
Scheduling and Fares—Low and Widely Available Fares” below.
Customer Service. Ryanair’s strategy is to deliver the best customer service performance in its peer group.
According to the data available from the Association of European Airlines (“AEA”) and airlines’ own published statistics,
Ryanair has achieved better punctuality, fewer lost bags, and fewer cancellations than its peer group in Europe. Ryanair
achieves this by focusing strongly on the execution of these services and by primarily operating from un-congested airports.
Ryanair conducts a daily conference call with airport personnel at each of its base airports, during which the reasons for
each “first wave” flight delay and baggage short-shipment are discussed in detail and logged to ensure that the root cause
is identified and rectified. Subsequent (consequential) delays and short shipments are investigated by Ryanair ground
operations personnel. Customer satisfaction is also measured by regular online, mystery-passenger and by passenger
surveys.
Ryanair is implementing a series of strategic initiatives that are expected to have a significant impact on its
customer service offering. Ryanair has also announced and introduced a series of customer-service related initiatives under
the AGB customer experience program, including a new, easier-to-navigate website with a fare finder facility, a mobile
app, reduced penalty fees, allocated seating and more customer-friendly baggage allowances and change policies. Ryanair
has also introduced several important products that improve its offer to customers. Family EXTRA offers families
travelling with Ryanair a set of bundled ancillary discounts and 20% off a third booking. Business PLUS offers business
travelers a flexible ticket, airport fast track and priority boarding. Leisure PLUS gives customers a discounted bundle of
ancillaries including a 20kg bag, priority boarding and a reserved seat. Ryanair Groups is a dedicated booking service
designed for groups travelling together and this year Ryanair launched a new bonded travel service for school travel.
Furthermore, these customer-service related initiatives include scheduling more flights to primary airports, selling flights