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> Ryanair is a wonderful example of two extremes - it’s one of the worst possible airlines that nickel and dimes you for everything, it’s not a great employer,

> Ryanair is a wonderful example of two extremes - it’s one of the worst possible airlines that nickel and dimes you for everything, it’s not a great employer, and it is rated the worst European airline; however, it’s dirt cheap. I fail to see how these are two different extremes. More like two sides of the same coin.

derefr 7y ago
The natural reading of the “worst” part, to me, is that Ryanair is a business built on greed. These sound like the practices of a company whose owners want to squeeze all the money they can out of it in a short-term sense, leaving none “in” the company to grow it or pay its employees well. And you’d expect such a business to have high margins; i.e. to be charging a lot for a little, maximizing earnings at the expense of reputation. But instead, Ryanair is extremely low margin. Which actually is surprising. (I mean, not in an economic sense; the greedy Ryanair would die, where the cheap Ryanair would, and does, live, serving a niche. But it’s still surprising in the sense that it means that the archetype you were expecting to apply—that of the greedy owner—probably doesn’t.)
- lotsofpulp 7y ago
  > And you’d expect such a business to have high margins; i.e. to be charging a lot for a little, maximizing earnings at the expense of reputation. Only if that business had a monopoly. As Ryanair has competition, and Ryanair doesn’t provide any service that others won’t or can’t, one would not expect high margins.
- smogcutter 7y ago
  I don’t see how this reasoning follows. The business model is pretty clear - shave everything to the bone and make your profit on volume. It’s like Aldi or wal-mart for air travel. If they had high margins they’d just get their lunch eaten by someone offering better service at the same price (with lower margins). It’s certainly not incompatible with greed. Edit: reread your last pp and obviously this isn’t news to you. I just don’t share the greed = margins expectation.
- TulliusCicero 7y ago
  Interpreting low-cost low-service providers as 'greed' strikes me as naive. How else would you expect a business to cut costs and prices to the bone, other than by reducing service? Costco, while blessed with a better reputation, is similar. The prices are low in large part because the experience of a Costco store is extremely barebones: limited variety of items, required to buy in bulk, everything is just on the pallets they came on, the store is literally a warehouse with a cement floor, customer service is very limited etc. That's not them being greedy either, it's fundamental to how their business works.
  - dangus 7y ago
    It’s interesting that you bring up Costco because their business model doesn’t quite work the same way. Costco employees are paid very well compared to other retail and warehouse employees. The average Costco shopper is also more affluent than a typical Walmart or Target shopper. Costco customer service is not limited at all. It’s the best in the industry. They have notoriously generous return policies. As long as it’s not electronics, you can return basically anything at any time. The electronics section also tacks on another year warranty compared to other retailers. Many items in Costco aren’t actually generally the best deal around. Again, they cater to high income families. Yes, the low-labor warehouse environment with very few SKUs reduces costs, but it not a low-end experience. Only bulk staple foods are truly great deals, many items in the middle section (home goods) and electronics can be found for cheaper elsewhere with little difference in quality. The analogy you might be looking for is Amazon. They use contracted employees for deliveries and overworked, underpaid non-union warehouse employees. They have very little emphasis on delivering genuine goods and don’t mind selling off-brand stuff as long as it’s the cheapest option. They use market dominance as a replacement for decent service and products: who else can run their own delivery service?
  - derefr 7y ago
    To be clear, it’s not the low-cost part that sounds like greed on the part of the owners; it’s the low-paid employees and worst-rated service that sounds like greed. Those are more often things you see from companies who are “penny wise and pound foolish”; companies like, say, Comcast.

derefr 7y ago

The natural reading of the “worst” part, to me, is that Ryanair is a business built on greed. These sound like the practices of a company whose owners want to squeeze all the money they can out of it in a short-term sense, leaving none “in” the company to grow it or pay its employees well. And you’d expect such a business to have high margins; i.e. to be charging a lot for a little, maximizing earnings at the expense of reputation. But instead, Ryanair is extremely low margin. Which actually is surprising. (I mean, not in an economic sense; the greedy Ryanair would die, where the cheap Ryanair would, and does, live, serving a niche. But it’s still surprising in the sense that it means that the archetype you were expecting to apply—that of the greedy owner—probably doesn’t.)

lotsofpulp 7y ago
> And you’d expect such a business to have high margins; i.e. to be charging a lot for a little, maximizing earnings at the expense of reputation. Only if that business had a monopoly. As Ryanair has competition, and Ryanair doesn’t provide any service that others won’t or can’t, one would not expect high margins.
smogcutter 7y ago
I don’t see how this reasoning follows. The business model is pretty clear - shave everything to the bone and make your profit on volume. It’s like Aldi or wal-mart for air travel. If they had high margins they’d just get their lunch eaten by someone offering better service at the same price (with lower margins). It’s certainly not incompatible with greed. Edit: reread your last pp and obviously this isn’t news to you. I just don’t share the greed = margins expectation.
TulliusCicero 7y ago
Interpreting low-cost low-service providers as 'greed' strikes me as naive. How else would you expect a business to cut costs and prices to the bone, other than by reducing service? Costco, while blessed with a better reputation, is similar. The prices are low in large part because the experience of a Costco store is extremely barebones: limited variety of items, required to buy in bulk, everything is just on the pallets they came on, the store is literally a warehouse with a cement floor, customer service is very limited etc. That's not them being greedy either, it's fundamental to how their business works.
- dangus 7y ago
  It’s interesting that you bring up Costco because their business model doesn’t quite work the same way. Costco employees are paid very well compared to other retail and warehouse employees. The average Costco shopper is also more affluent than a typical Walmart or Target shopper. Costco customer service is not limited at all. It’s the best in the industry. They have notoriously generous return policies. As long as it’s not electronics, you can return basically anything at any time. The electronics section also tacks on another year warranty compared to other retailers. Many items in Costco aren’t actually generally the best deal around. Again, they cater to high income families. Yes, the low-labor warehouse environment with very few SKUs reduces costs, but it not a low-end experience. Only bulk staple foods are truly great deals, many items in the middle section (home goods) and electronics can be found for cheaper elsewhere with little difference in quality. The analogy you might be looking for is Amazon. They use contracted employees for deliveries and overworked, underpaid non-union warehouse employees. They have very little emphasis on delivering genuine goods and don’t mind selling off-brand stuff as long as it’s the cheapest option. They use market dominance as a replacement for decent service and products: who else can run their own delivery service?
- derefr 7y ago
  To be clear, it’s not the low-cost part that sounds like greed on the part of the owners; it’s the low-paid employees and worst-rated service that sounds like greed. Those are more often things you see from companies who are “penny wise and pound foolish”; companies like, say, Comcast.