Why Ryanair Isn't in the Vacation Package Business
Many airlines salivate over the packaged holiday business for the big margins, but Michael O'Leary says he's not interested. I think there's a lesson in this approach for other airlines.
Dear readers,
In Europe, the package holiday is sacrosanct. Many airlines, from EasyJet to Jet2.com (I love that name) chase the business because it's a strong one. Margins can be robust. Stateside, I have noticed that some airlines (most notably JetBlue) want to expand their vacation offerings so they can make more money from hotel commissions. But Ryanair CEO Michael O'Leary caught my attention last week with a candid comment about why he won’t be tempted.
"I really don't want to waste our time and resources running around places like the Canaries or Greece trying to buy fucking hotel rooms ... or organizing post-[flight] transfers," he told analysts May 19 on Ryanair Group's full-FY 2025 earnings call.1 "We have more to be getting on with."
I know it's possible to enter the package business without negotiating individual agreements with hotels or limo companies. That's why many airlines implement white-label options. Of course, O’Leary knows that, too. But I think it's important to focus on his general point about why Ryanair is very choosy about which revenue-generating ideas it implements. He knows that an airline only has so many resources (people and money), and he doesn’t like wasting them on non-core business segments that might turn out to be distractions.2