Standing room only?

Ryanair Holdings may offer free flights to passengers willing to stand up during flights of less than 90 minutes, Sky News reported, citing chief executive Michael O'Leary.

Ryanair is asking Boeing about converting planes or delivering a new fleet with a section of “vertical seating”' that would allow passengers to stand or to sit on bar stools similar to those in trains' dining cars, Sky reported Mr O'Leary as saying in an interview.

More cost saving measures by Ryanair

According to this morning's Irish Independent, Ryanair is considering banning check-in luggage as part of a new system where passengers would have to carry their bags all the way to the tarmac beside the aircraft. Yesterday, chief executive Michael O'Leary detailed proposals where customers would pass all of their bags through security checks, currently used just for hand luggage, and then carry them through terminals to their flight.

The budget airline says the plans could save €20m, through not paying baggage handlers, which would be passed on to consumers. The airline claims 70pc of its passengers do not check in any baggage when travelling. However, there is no timeline on when the plans could be introduced, nor what airports the system could operate in.

Mr O'Leary sold €19m worth of shares in the company less than three weeks ago. Ryanair also said it is suspending expansion at its nine UK bases as part of its lengthy campaign against government-imposed passenger taxes. The no-frills airline claimed that a combination of a stg£10 passenger tax introduced in the UK and what it described as high airport charges levied by airport operator BAA have resulted in 4.5 million fewer passengers at UK airports within the past five months.

Aer Lingus Cuts

Aer Lingus has announced it is scrapping some transatlantic services from its winter schedule.

The airline says the moves are being made to address 'significant losses' generated over the winter period on some routes. Aer Lingus says these are now being exacerbated by 'extremely weak' demand and lower fares. It comes just one month after Aer Lingus said it was suspending flights from Belfast International Airport.

The airline is stopping Shannon flights to Chicago from September 1, while services from Dublin to Washington and San Francisco are being dropped from October 25. It says the restart of these services in summer next year will be 'subject to review'.

Ryanair credit cards

Ryanair today launched Ireland’s first prepaid MasterCard service which will allow users to make purchases in shops, restaurants and online. Ryanair Prepay, which costs €85 and attracts a reduced stamp duty rate of just €10 (compared to €30 for traditional MasterCard and Credit card products), allows users to place credit on their MasterCard through An Post, online or via mobile phone. The card does not require credit checks or even a bank account and those who sign up will receive four free Ryanair flights as a well as a host of online discounts and cash back offers. The card is ideal for those who wish to have the flexibility and convenience of a credit card but don’t want, or can not access a traditional credit card.

Demand for first class airline tickets skydives

The worsening economy is squeezing Europe’s major airlines, with dwindling sales of premium-class tickets starting to take their toll. On Thursday, Air France-KLM followed British Airways and Lufthansa in reporting a steep fall in quarterly earnings, largely because of high jet fuel prices last summer. Jean-Cyril Spinetta, chief executive of Air France-KLM, said the airline had also started to notice in August “a slide” from the front of the plane to the back as passengers switched to cheaper seats. He said about 8% of the airline’s corporate clients were banks, which had been on the front line of the financial crisis. “When there’s an economic crisis, businesses always want to reduce their general expenses, and individuals are more careful about their spending,” he said.

Airlines do not provide estimates of how much their revenue depends on first and business-class travelers. But a drop in such ticket sales is particularly damaging because major airlines often rely on the expensive seats to offset the lower-margin seats at the back. Global economic turbulence is forcing BA and many other airlines into a series of difficult decisions. The income elasticity of demand for airline travel is likely to be strongly positive especially for luxury travel and on routes where there is genuine competition the price elasticity of demand is also likely to be a constraint on how high fares can be.

'For European Airlines, Decline in Premium Ticket Sales Takes a Toll on Earnings', New York Times, 20th November 2008.

Boeing strike causes supply problems

The strike at Boeing in the US which ended on Sunday is a good example of a unexpected factor which can affect supply. Today, Boeing announced it has delayed the first flight of its 787 Dreamliner aircraft until 2009, having previously aimed to get it off the ground before the end of 2008. Boeing has blamed the delay on the 58-day machinists' strike. Even though the strike is over it will still take some time to get the company's production system and its supply chain back up to speed.