Why Ryanair succeeds

Courtesy Ryanair

Courtesy Ryanair

IF you think of customer service, you will not think of Ryanair. The Irish budget carrier is not known to shine in that department. In fact, it has garnered many complaints about rude and unhelpful staff, non-payment of compensation for flight cancellations and delays, and almost merciless pricing.

Yet – and a big yet it is – Ryanair is making the kind of profits that are the envy of rival and legacy airlines. Despite rising fuel costs, it reported record full-year profits in May. That means people are flying the airline. Passenger numbers continue to grow, reaching just under 80 million. The carrier is expanding capacity and introducing new destinations. By 2018, its fleet would have grown to 400 with the addition of 175 Boeing jets worth US$175bn.

And you wonder why.

While many so-called budget airlines have modified the no-frills model in branding themselves, Ryanair has played by its rules religiously and it has paid off. The carrier continues to look at ways to slash costs and the corollary of that is to charge for extras that might be offered as an entitlement on other airlines. Remember the controversy it created when it suggested a charge for use of the aircraft toilet? (See Ryanair pushes the boundary, Jan 31, 2011) Or the buzz about introducing standing room only in its aircraft? (See Standing room only up in the air, Jul 23, 2010)

Among the list of extras, Ryanair charges for check-in services at the airport if you do not do it electronically beforehand. At some airports, this may not even be available. Once booked, do not dream of changing your flight. Baggage over-limits are scrupulously applied. Think again if you want to lodge a complaint about its service or staff: it would mean expending time and energy, and it jacks up the operating cost.

It may not be that Ryanair does not care about customer feedback and satisfaction. It could well be a case of going for the lesser evil or giving the customer the less offending option which usually turns out to the more economical one. The carrier makes no apologies for what it is doing amidst criticism of mean and uncompassionate handling.

What about customer loyalty, you ask.

Brand loyalty is not a driver of the low-cost model. In reality, neither Ryanair nor most budget carriers rely on that aspect to survive; it is a bonus if it develops into a positive reinforcement. Cost is the primary driver, and for all the complaints about cramped seating, ancillary charges and poor service or an absence of assistance, that will continue to be an irresistible pull for many travellers. That is why the hybrid model attempted by some carriers does not succeed as well. Ryanair may be said to have managed the level of discomfort to be sufficiently below the benefits of low costs that in spite of customer dissatisfaction with its service, it is able to thrive on clientele both old and new.

That also explains why Ryanair has so far not been keen on applying the low-cost model to the long haul that not a few airlines have tried and failed, and that some are still ambitiously hoping it will work. The long haul demands cannot be a mere straight-line extrapolation of the low-cost model formula. There are things that the short haul does not provide but which the long haul cannot do without even if passengers had to pay for them, for example, blankets, refreshments and meals. Travellers strapped in the seat may tolerate the discomfort for a short trip to save a few dollars, but beyond a certain point it becomes insufferable without distractions or relief of some sorts. Ryanair has wisely steered clear of that danger zone when it can no longer ignore the customer’s voice of discontent.

Stick to the knitting, advocate Tom Peters and Robert Waterman Jr in their bestselling book “In Search of Excellence” first published in 1982. Some things remain a hardcore basis for success. Ryanair chief Michael O’Leary could be proud that Ryanair is perhaps the only true disciple today of the budget model: Strictly no frills, and you should know better than to complain. (See Ryanair introduces cash passport, stays true to budget model, Oct 28, 2011)

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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