Ryanair’s charm offensive

You cannot help but have noticed that following their recent profit warning, Ryanair have been working hard at softening their image.

They have started a Twitter account (no doubt with some poor intern chained to a computer-screen in a basement), they are improving telephone access for people who need help, they will start to accept AmEx cards, the dreaded captcha is being removed from their booking page, they appear serious about making their press releases less aggressive and – most surprising of all – they offered free refreshments to journalists at a recent press conference. Michael O’Leary finally seems to have worked out that his hard-man image is doing more harm than good.

Ryanair are also clearly a little concerned about their position in the market. It was interesting that they mentioned that bookings for the autumn were not quite as good as they might be. This is a major time for business travel and it is this sector that Ryanair are particularly anxious to attract.

Whilst a more mature approach is welcome, I am not sure that they have really understood the problem. Ryanair is simply too expensive for what it offers.

EasyJet make less than £6 per passenger and Ryanair have been making close to £14. Whilst there is scope for easyJet to improve their margins, they are most unlikely to ever get close to Ryanair’s levels which are far higher than most other airlines. In the last few years, Ryanair have been gently increasing the cost of their fares and extras which has made the problem worse.

If you are flying from Liverpool to Poznan, you really do not have a choice. However, on routes where there is some competition, such as from many UK cities to Dublin or from London to Spain, Ryanair is often more expensive than other airlines. This seems to be especially the case for tickets booked closer to departure, which a businessman might use – a vital area for airlines because these are obviously the most profitable.

Quite simply, if Ryanair are only going to be £5 or even £10 less than Aer Lingus, easyJet or even BA, people will avoid them. Their reputation is such that a sizeable number of people will not use them at any price but, people in the middle, who shop around and know how to compare fares with all the extras they need included, are not going to rush to Ryanair unless there is a worthwhile saving. Ryanair have worked on the principle that if they behave in a cheap and nasty way, people will believe they are cheap. Yet they are making substantially more per passenger than other airlines which suggests they are neither cheap nor good value on many occasions.

The airline really only has two options if it wants to put matters right. They can extend the current charm offensive to a complete re-branding of the airline to make it genuinely passenger-friendly. I imagine such a move would be horrendously difficult and expensive and it would take a very long time to change people’s perceptions. The only other option is to actually do what they say they already do – and that is to offer prices that are lower than the competition.

Their figures show they have plenty of scope.

 

One thought on “Ryanair’s charm offensive

  1. Ryanair may make £14 from a passenger but they will only do it once, as many people will never fly with them a second time. EasyJet may make only £6 from a passenger but they will do it over and over again.

    Perhaps Mr O’Leary has realised smaller margins from repeat customers makes better business sense than ripping someone off, and having them never travel with Ryanair again and telling everyone they know about their bad experience.

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