Why Ryanair will not implement – or will withdraw – its toilet charge: because it will cut profits

It is annoying to see the annoying company Ryanair – whose motto I imagine to be “if they’re stupid enough to fly with us, they’re on a mental level with sheep and should be treated as such” – given occasional credibility over ludicrous ideas without anyone asking the straightforward question.

Such as: would implementing that idea actually cost Ryanarse money, or profits?

When Michael O’Leary makes a stupid pronouncement, the media seems happy to repeat it. None seems happy to examine it and throw it back at O’Leary to ask whether he has lost his mind and is trying to annoy his shareholders as well.

For instance: charging people to use the toilet. (That’s a Google search link: the top link at the moment is to an April 2010 story saying that Ryanair is going ahead with it… and the third link is from February 2009, with “pilots aghast at proposal to bring in £1 charge”, which shows you how long this story has been bing-bonging around the mediasphere.

Let’s examine this the way it should be examined: from a business standpoint. If Ryanarse starts charging for access to the toilet, I think it will lose money. Here’s why.

1) emptying the toilet reservoirs (known, charmingly, as the “honey tanks”) is a fixed cost. It’s done at the end of every flight. And the toilets are on aircraft are never in a wonderful state.

If Ryanarse starts charging for the toilet, fewer people will use it. Obviously. It may also have to do more cleanups from parents of young children who run out of money. It’ll also have to get staff to watch over the toilet to make sure people don’t hold doors open for each other – which will be unpopular with the aircrew, since nobody like to be toilet cop.

So it will get a bit of money from people paying to use the toilet, though there will be fewer visits – meaning that the fixed cost, cleaning the toilet reservoir, will only be slightly offset by the takings. And aircrew will have two new grievances: cleanup and toilet cop rota.

But while Ryanarse makes some money from selling toilet access, it will lose money from sales of coffee, tea and other liquids. This is stupid, because it already has the highest prices for coffee and tea and food according to a 2008 survey by Which? Holiday:

The Irish airline charges £2.50 for a bottle of water and £2.50 for a cup of coffee while a small bottle of red wine costs £5.00.

Why will it lose there? Because people will think “Hmm, if I drink this coffee I’ll have to pay for letting it out too.” So the passengers won’t buy the coffee or use the toilet. Ryanarse is suddenly losing money: the profit it used to make on coffee/tea sales. And that is pure profit: apart from heating the water, pretty much everything that it buys for coffee/tea – instant coffee, teabags – can be reused on another flight if it isn’t used. Whereas the toilet reservoirs have to be emptied every time; it is actually more efficient to encourage their use – that way, you get your money’s worth for the cleaning services.

Michael O’Leary – who I think is despicable; if you want to think of the future driven by his credo, imagine Adam Smith’s invisible hand slapping the human face forever – ought to be able to see that charging for access to the toilet is a stupid move, economically. It would actually make better business sense to announce that the “toilet charge” will be rescinded – and raise the price on coffee and tea. In fact, expect it.

And if O’Leary is too stupid to see it, then perhaps his shareholders could show him this blogpost.

And finally, to the business press: next time O’Leary puts forward a stupid idea like this, ask whether it can make business sense. Think about fixed costs and operating costs. And quiz him. When he can see he’s going to lose, he caves in. I think if this is implemented, it will be a money-loser. But you’d need to ask the hard questions – how many drinks are sold per flight before, how many after, what’s the take – to know whether, when Ryanarse announces it’s not implementing (or is withdrawing) these charges, precisely why it’s doing it.

My suggestion: it won’t be because of an outbreak of warmth in O’Leary’s heart, which I imagine as a coal-black thing that would make Lord Voldemort shudder.

6 Comments

  1. But there’s another reason he makes these ridiculous pronouncements; to get his face/name/company in the papers. And it works every time. Much better to ignore the annoying cock, and hope his horrible company will go away.

  2. Charles,

    Justifying this on cost is possibly useful but shouldn’t be necessary. In the end you have to made judgments about what is right and what is wrong – businessmen more than most.

    The idea of charging people to use a toilet on a plane is just wrong. People go to the toilet on aeroplanes not because they enjoy doing so – it’s not like deciding whether to have a croissant or a sandwich – but because they need to.

    When you need to go, you need to go. People feel airsick, women have periods, you need a pee, or a dump. It’s not fashionable to talk about but it’s a fundamental human need and it’s fundamentally about treating people with dignity. Considering toilets as a bonus amenity in any situation is dubious – but doing so in a confined, sealed, environment that puts the human body through considerable stress over a period of several hours makes no sense. Many people – especially elderly people – worry enormously and plan even shopping trips meticulously so they know where they can use a toilet that is clean and dignified.

    O’Leary’s taste for controversial media stories is legendary and it’s often refreshing. This isn’t one of those situations. Thanks for pushing the issue – it needs to be put down for good.

    Mark

  3. Not quite,

    If less people are using the toilet they only need one rather than two – this means an extra four seats on the plane.

    Assuming these are bonus seats sold last then they’d be worth hundreds each journey – i belive they work the planes hard so this could be thousands of euros a day.

    Those that need the loo pay a quid and know this when they book – those that just want to stretch their legs don’t.

  4. Charles

    Tuesday 18 May 2010 at 6:43 pm

    @Joe – well, it could – though the usual accepted ratio is a minimum of 1 toilet per 50 seats, and if it went above that things could get ugly. Though I think they will get ugly already. As I said, the air crew would have to play toilet cop, and there would be the inevitable dire scenes of a parent trying to get a child to the toilet and not having the right money and everything going really horribly wrong. The PR knockback would be huge – and all for a few euros.

    Ryanair has been proposing this for ages, but not actually doing it, which makes me suspect that someone has realised that it’s a bad move.

    Also: fewer people using the toilet. I am allowed to be the grammar Nazi on my own blog, I hope.

  5. It beats me why people write such ill informed rubbish! Of course Ryanair will not charge for using the loo for all the reasons that you state. Why so many people are keen to ctiticise Michael O’Leary is a mystery to me. He is a successful businessman who has boosted the economy and provided travel opportunities for hundreds of thousands of people who would never have had the chance to travel without his innovative ideas. All these people who whinge “I’ll never use Ryanair again” make me sick – don’t then, go and pay a lot more and fly BA instead and leave Ryanair for the people who appreciate it!

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