Will Ryanair’s new baggage policy force airports to review baggage system capacities?

On the 1st November Ryanair will bring in a new stricter cabin baggage policy which will move away from the traditional low cost airline model of being able to bring a standard cabin bag on board for free. Since 1991 Ryanair and other low cost airlines have conditioned behaviour from passengers that to avoid paying more than the initial ticket price they should only travel with a cabin bag. However passengers have now become so used to this, airlines are now struggling to accommodate all the cabin bags. Over the last few years airlines have been dealing with this challenge by gate checking cabin bags free of charge, however this practice creates a number of operational inefficiencies for the airlines and airports.

Ryanair’s solution is to shrink the free cabin bag allowance to the size of a handbag or small rucksack, and then charge people to either take a larger bag on-board as part of the priority boarding premium or checking the bag into the hold for a small fee. This was tried previously by Wizzair, but was dropped as the airline looked to grow more aggressively. Will Ryanair’s new policy be a success and how will that effect airports?

If successful the benefits to Ryanair include:

  • Additional ancillary revenue – Ryanair estimate 60% of passengers will be unaffected by the change, however this means 40% will need to spend more money on their Ryanair flight than they did before
  • Operational efficiency – This policy should remove the need to process gate checked bags which have recently been causing operational bottlenecks, and loading more passengers without larger cabin bags will hopefully speed up the boarding and turnaround times
  • Realising the benefits of automation – checking bags at the gate is a very manual process, but technological advancements in baggage systems means processing baggage are more efficient than ever with self-service check in, and higher levels of automated screening, meaning processing hold luggage can be much more cost effective

These benefits will obviously only be realised if Ryanair can change passenger behaviour instilled over 17 years without losing those passengers to rivals with different policies, but maybe higher fares.

The changes affect the passenger with increased cost, and Ryanair with lower costs and more revenue, but how do they effect the airport? The possible benefits of the new policy could include:

  • Lower passenger screening costs – screening cabin bags is complex, high cost, and slow. With potentially 70 less cabin bags per flight this should reduce the workload of passenger screening areas which should reduce airports costs, or allow queues to be reduced
  • More retail revenue – passengers not lugging cabin bags around maybe more inclined to visit shops and restaurants in departure lounges driving the incomes from airside retail
  • Increased direct revenue from hold baggage charges – typical airport commercial models charge per passenger no matter how many cabin bags they have and per hold bag. Ryanair’s new fee structure should increase direct revenue for airports

Where there are benefits airports should also realise there could be downsides, aside from the push from Ryanair to share from the efficiency savings and revenue increases, airports should consider:

  • Baggage handling system capacity assumptions – Does up to 70 more hold bags per departing flight change the volume assumptions an airport has in place? And can the system cope with this?
  • If this policy works for Ryanair how does that affect future demand planning – Assuming the system coped with the extra Ryanair bags, what if other carriers adopt the policy and how does this affect an airports future system capacity plans in a time of already strong growth in passenger numbers?
  • Is the check in areas and baggage halls big enough – if an airports baggage forecasts are changed does this effect the space provisions in the airport?

Airports will need to watch this new policy closely and understand that there may be a requirement to revisit baggage system planning assumptions and if necessary increase the capacity of their baggage systems.

About Millar Management

Working with airports around the world for over 35 years. We bring together architectural and baggage experience to support airports in meeting the requirements of future growth and legislative changes.

Our services supporting baggage systems include: requirements definition, concept and detailed design, project engineering support, and BIM modelling.