Ryanair, Europe’s leading discount airline, believes that revenue from in-flight gambling could eventually replace the need to charge air fare, allowing the airline to offer all passengers free airfare on all of its flights, according to Ryanair Chief Executive Michael O'Leary.
Entertainment Revenue May Enable Free Airfare
In 2005, Ryanair offered free airfare on about a quarter of its seats—passengers were only required to pay airport fees and taxes—and O’Leary said the free airfare offer could increase to between 50 percent and 100 percent depending on how well ancillary revenues grow.
"Ultimately entertainment will be where the money is," O’Leary told reporters at a press conference in London, where he announced a “sale” of 2 million free airfare seats during the last three months of 2005. "It would transform ancillary revenues and profits."
Ryanair already receives ancillary income from other travel services such as hotel bookings and car rentals. According to information on the Ryanair Web site, the airline charges an average of 41 Euros for its flights (about $48.50), which includes airport fees, taxes and other charges, so the amount of additional per-passenger revenue it would need to generate from gambling may well be within reach.
Ante Up for Free Airfare
O’Leary said the airline probably will add gambling to its Web site in early 2006, and he plans to introduce gambling on Ryanair flights as early as 2007. The airline already is in talks with computer software companies about real-time payment mechanisms that are needed to offer onboard gambling,
O’Leary said the experiment with on-board gambling, which also will include in-flight arcade games, is likely to launch about 12 months after the airline begins offering in-flight mobile phone services in spring 2006.
A New Angle on an Old Idea
This isn’t the first time Ryanair has tried to use in-flight entertainment revenue to offset costs and reduce airfare. In April 2005, the airline abandoned its attempt to boost ancillary revenues by charging for Hollywood movies and children’s programming after passengers objected to paying for a service they were used to getting for free.
O'Leary said Ryanair’s decision to offer in-flight gambling using portable consoles is based in part on the success of the airline’s “Fly to Win” scratch card offer. Ryanair passengers who purchase a scratch card during their flight for 2 Euros (less than $2.50) have a chance to win an array of prizes, including new automobiles such as a Mini Cooper or a Renault Megane convertible. For every ticket purchased, Ryanair makes a contribution to children’s charities throughout Europe.
Would People Object to Gambling, Even for Free Airfare?
While most people would say they want free airfare, and Ryanair is betting that many people would enjoy in-flight gambling, some people might object taking flights that included gambling. When asked whether in-flight gambling might discourage families from flying Ryanair, O’Leary seemed unperturbed.
“We recognize your right to object, but good luck, somebody else will have your seat,” he said.
