Is Stelios right that 200 is the ideal size for an airline
An airline with less than 100 planes in their fleet are at constant risk of being taken over. A tempting proposal for shareholders knowing the risks associated with airline stocks and therefor suceptible to larger airlines wanting to quell sudden upstarts.
More than 200 planes and you are becoming a real threat and can no longer hide your size. Unions beome focused and all of a sudden you are coming to the top of size statistics and a sharpened view from the established.
Around 200 you are to large for a swept under the carpet buy out and can continue to play the I'm still catching up game without another airline going after every route you try. You are also still a manageable size where a small top managmenet team can have full control on all aspects and a CEO can get into the details and reach out to everyone where necessary.
Ryanair have certainly not succeded profit wise with their expnsion. Their profit at 400 was hardly 20% more than when they had 200 planes. And in the meantime they had added all the additional sales of non core Low Cost products like priority boarding, seat selection and fast track. And since then it has really gone south. Yes there have been other distractions in later years but it seems O'Leary have seen the problems and is trying to split the airline into more entities. Most think its for making crew and unions more mellow. But it could also be that smaller business and profit units are more manageable. They haven't succeded because Buzz, Malta and Lauda haven't been given enough authonomy to compete on their own terms. And the collection haven't been fully utilized to obtain competing offers on the supply side due to believable options.
The smaller size also don't make the cash pile from presold and therefore in reality unearned bookings seem so enormous that it is tempting for both managment and owners to see it as dead capital and reduce it through dividends, share buy backs and bonuses.
It certainly is easier for an early owner to keep their percentage ownership without constant new share issues and potential for watering out. So maybe it is more interesting for owners than managment to keep the business within maximum profitable limits. While managment will always think bigger size = more pay and rewards and more personal status.
More than 200 planes and you are becoming a real threat and can no longer hide your size. Unions beome focused and all of a sudden you are coming to the top of size statistics and a sharpened view from the established.
Around 200 you are to large for a swept under the carpet buy out and can continue to play the I'm still catching up game without another airline going after every route you try. You are also still a manageable size where a small top managmenet team can have full control on all aspects and a CEO can get into the details and reach out to everyone where necessary.
Ryanair have certainly not succeded profit wise with their expnsion. Their profit at 400 was hardly 20% more than when they had 200 planes. And in the meantime they had added all the additional sales of non core Low Cost products like priority boarding, seat selection and fast track. And since then it has really gone south. Yes there have been other distractions in later years but it seems O'Leary have seen the problems and is trying to split the airline into more entities. Most think its for making crew and unions more mellow. But it could also be that smaller business and profit units are more manageable. They haven't succeded because Buzz, Malta and Lauda haven't been given enough authonomy to compete on their own terms. And the collection haven't been fully utilized to obtain competing offers on the supply side due to believable options.
The smaller size also don't make the cash pile from presold and therefore in reality unearned bookings seem so enormous that it is tempting for both managment and owners to see it as dead capital and reduce it through dividends, share buy backs and bonuses.
It certainly is easier for an early owner to keep their percentage ownership without constant new share issues and potential for watering out. So maybe it is more interesting for owners than managment to keep the business within maximum profitable limits. While managment will always think bigger size = more pay and rewards and more personal status.
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