Ryanair chief executive Michael O'Leary is predicting free airline travel as a standard business model within a decade. He claims that eventually "the spend on board will be so high that the flight will be free".
Speaking at a recent industry event, O'Leary was enthusiastic about the revenue-generating opportunities available to low-fare airlines. He foresees airport operators sharing car parking and retail revenues with airlines and huge potential for money-spinning activities onboard the aircraft such as buy-on-board catering, shopping and as-yet unavailable in-flight gambling.
Rival European low-cost carriers are not prepared to commit themselves to flying their passengers around at no charge quite yet. Ed Winter, easyJet's former chief operating officer, who retired at the end of September, said that his carrier's cost base is too high to permit such generosity. "Some 30% of our cost base goes on airport and ground handling charges, which is more than Ryanair," he noted.
Where the competition does agree with O'Leary, however, is on the value of ancillary revenue streams to their future businesses and on the future of dynamic packaging - whereby passengers visiting an airline's website are given the option of booking car hire, hotel reservations and insurance as they make their flight reservations.
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