Ryanair, the largest low-cost carrier in Europe and one of the largest airlines in the world by the number of passengers carried, has announced the amount cost per passenger for 2022.
In addition to their cost per passenger, they also announced the cost per passenger of their biggest competitors.
Amount of cost per passenger in 2022:
- Ryanair – 31 euro
- Wizzair – 39 euro
- Easyjet – 53 euro
- Norwegian – 87 euro
- Eurowings – 94 euro
Compared to Ryanair, Wizzair has a cost per passenger higher by 26%, Easyjet by 71%, while Norwegian and Eurowings by as much as 181% and 203%.
These figures show why Ryanair and Wizzair are the dominant low-cost airlines. They can afford to drop prices. Carriers like Eurowings and Norwegian have roughly three times the cost per passenger, which makes them uncompetitive with Ryanair’s prices. However, they can provide some services such as guaranteed transfers and cooperation with other carriers (codeshare/interline), which Ryanair and Wizzair do not offer. Easyjet, for example, cooperates a lot with other longhaul airlines, providing them with the service of transporting passengers to their final destination within Europe. With that, they split into their different business segments, although they are still primarily point-to-point carriers.
In addition to the amount of cost per passenger, the cost of fuel, which is not taken into account, should be added.
Ticket prices
When the amount of cost per passenger is known, it is visible how much Ryanair and other low-cost airlines lower their prices below the value that covers their basic costs.
When Ryanair offers a price of 9.99 euros, it means that with that ticket sold, they are in red by 21 euros per passenger. This means that the next passenger would have to buy a ticket at a price of at least 52 euros for Ryanair to break even in terms of costs. Those 52 euros are 31 euros of basic cost per passenger plus 21 euros for the passenger who paid 9.99 euros. Airline can also “persuade” the passenger who paid 9.99 euros to spend additional 21 euros on luggage and seat reservation, and raise the spending to 31 euros.
If the airline sold all the tickets on the plane for 9.99 euros and they had 100% occupancy in the Boeing 737-800 with 189 seats, they would earn 1888.11 euros. With the cost being 5859 euros (31 euros per passenger ), the figures would be in red by 3970.89 euros.
Ryanair can afford this minus in case they want to compete in new markets or compete with a certain airline, but in the long run, they cannot afford it, so the prices have to be higher.
Ryanair does not operate at a loss, which means that they evaluate ticket prices very well and make constant changes in prices, to attract passengers and make money along the way. Ryanair makes a lot of money from additional options such as seat reservations, additional baggage, and other add-ons. According to frequent reports in the media, about a third of the low-cost carriers’ income comes from the sale of these add-ons.
As already mentioned, it is necessary to add the fuel price to this cost, which makes a third of the cost according to IATA. With Ryanair, we would have to add another third to the price per person, which is 31 euros, so roughly the total cost would be 40 euros, while with Wizzair it would be around 50 euros. It is challenging to calculate fuel prices, due to constant fluctuations in oil prices and different flight lengths, different aircraft, so these are only rough estimates.
The next time you buy a ticket for a Ryanair or Wizzair flight, know that if you paid less than 40 euros, you did well and paid less than the cost that the airline has for you.
