Method Behind Ryanair’s Madness
Irish budget carrier Ryanair and their CEO Michael O’Leary have cultivated a reputation for controversial innovations and colorful language. An O’Leary press conference is very well covered by the media, mostly because it promises controversy and more than a few unprintables.
Ryanair
Examples include O’Leary recently calling the Copenhagen climate summit (COP15) a ”talking shop for imbeciles.” Asked what he would do if [...]
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Written by Travel News on December 12th, 2009 with
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Irish budget carrier Ryanair and their CEO Michael O’Leary have cultivated a reputation for controversial innovations and colorful language. An O’Leary press conference is very well covered by the media, mostly because it promises controversy and more than a few unprintables.
Ryanair
Examples include O’Leary recently calling the Copenhagen climate summit (COP15) a ”talking shop for imbeciles.” Asked what he would do if he were in charge of BA, he says he’d be putting out his CV looking for a new job, and that the BA board was more interested in knighthoods than running an airline.
Ryanair reps haven’t been too far behind their CEO in brash talk. Aftar an Irish blogger named Jason Roe posted about an alleged bug in Ryanair’s booking system, one Ryanair rep called him a ‘lunatic’ and an ‘idiot’ and another rep added that Roe had a ‘pathetic life.’
For those who discount all this as mere barking, Ryanair’s ideas bite even harder. Their recent schemes include doing away with airport check-in kiosks and charging for checked-in bags. They’re also mulling charging for on-board toilets and offering standing-room tickets.
In an interview with the Wall Street Journal, O’Leary explains the method behind Ryanair’s madness. About the baggage check-in charge and toilets, he says it’s not about collecting ancillary revenue.
The baggage charge, he says, helped persuade Ryanair passengers to travel with carry-on luggage only, which meant the airline could do away with airport check-in and shift to a 100% online check-in system. This in turn means that passengers don’t ever get stuck in a Ryanair check-in queue, and this helps set Ryanair apart as more convinient than other airines.
Explaining the toilet charge, O’Leary says that again, it’s not about the money. It will train passengers to use toilets in the terminals before and after flights, which means the airline can replace a few toilets with more seats and reduce fares some more.
The standing-room idea apparently has no ulterior motive, and is simply meant as a way of offering dirt-cheap airfare by ripping off seats in the last 10 rows and offering 100 tickets for standing passengers.
From an investor’s point of view, it’s hard to argue with the results of Ryanair’s pavlovian policies, inspite of what O’Leary says about not being interested in the extra charges.
Ryanair’s ancillary revenue grew from 8% of total revenue last year to 20% this year. Ryanair carried 66 million passengers with a 15% jump in year-on-year traffic, resulting in revenues of €1.8bn with an 80% increase in net profits. As of now, Ryanair is the single-largest carrier of international passengers in the world.
But some things don’t change… At the end of a rather sensible interview, O’Leary partially redeems his reputation by answering a question about what people expect from a Ryanair flight experience. He says “You’re not getting free food. We don’t want your check-in bags. We’re not going to put you up in hotels because your grammy died… It’s a commodity. It’s not some life-changing sexual experience, which is what the other high-fare airlines have tried to convince you that it is.”
Ryanair photo by Jon Gos
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Written by Travel News on December 12th, 2009 with
no comments.
Read more articles on Tips and Tricks.