Musk has suggested he could buy the budget airline and called O’Leary “insufferable” and “an idiot”, after O’Leary rejected the idea of using Musk’s Starlink technology to provide wifi on flights.
O’Leary said at the press conference that his team is going to X’s office in Dublin to give Musk a free Ryanair ticket to thank him for the “wonderful boost” in publicity he’s had.
“If he wants to call me an idiot, he wouldn’t be the first, and he certainly won’t be the last … But if it helps to boost Ryanair sales, you could insult me all day, every day.”
On the prospect of Musk buying the Irish airline, O’Leary said: “We’re a publicly owned company. He’s free to [buy shares] at any time, but non-European citizens cannot own a majority of European airlines.”
I’m going to preface this by stating that it’s my assumption and not fact:
O’Leary isn’t daft. I don’t like him and I don’t like Ryanair, but he’s done well with the brand from a financial perspective, in an industry that’s all about the fine margins.
I’m quite sure your view is correct, it’s probably only about the numbers - for better or worse. If Starlink was a cheaper alternative to most in the market, and their projected connectivity sales outweigh the operating and capital costs, there’d be Starlink all over Ryanair planes. As it happens, the numbers probably look a deep red on the spreadsheet so it’s in the “fuck right off” box.
I’ve no love for either of them but it’s still nice to see Elon getting a poke in the eye.
I assume people are buying Ryanair tickets because they don’t want to spend any more money than absolutely necessary. So he’s probably right about the low rate of purchasers.
Of course Elon would be upset that the business case doesn’t work for someone.
Assuming the 5% estimate is correct, the back-of-an-envelope math is pretty easy.
Their annual report says 200M passengers in 2024-2025 financial year.
If they wanted to pay off the hardware in 5 years they’d spend a total of €750M on it and additional fuel, potentially being paid by 50M (5% of 1B) passengers, necessitating a minimum €15 charge to break even.
That is before you consider paying interest on a loan for purchasing the hardware, signage (their website says they have 643 planes with a total of 122,941 seats, just printing an information card for each seat back could be a substantial cost), staff training, the cost of the time each plane is out of service for the installation, etc, etc.
Could you try a lower price and hope that more people pay? Sure, but that feels pretty risky, and I’m sure they thought about that too.
Much as I enjoy having WiFi on flights and all, agree with the other posters here that it just ain’t adding up.