Debates, complaints and pragmatism 

by Enjay

 

Economics, Politics and Society. Theory v Reality.

 

 

Ryanair - have they overplayed their hand?

16/01/2012

I used to love Ryanair. Their aggressive attitude towards costs brought low cost air travel to millions and opened up hundreds of beautiful and little known corners of Europe. I was a frequent flyer and enthusiast for the Irish company that had made European travel affordably on my student budget. The business model of stripping out unnecessary luxuries such as free food, drinks and newspapers on short-haul flights was very appealing - and leasing aircraft rather than buying them kept the sunk costs down and the balance sheet light making the company an attractive proposition for investment.

Travelling on Ryanair is now my absolute last resort. I'll acknowledge that I now earn and therefore can afford alternatives (not that Ryanair is all that much cheaper anymore and i will come to this) and I guess to some of you I'm just going to sound terribly middle class however I have major objections to Ryanair these days and they come under the following categories: Pricing, Experience and company policy.

Pricing

Ryanair often remain the cheapest carrier on the routes they take. However they are quite often not and definitely not when one includes all the additional expenses one derives from travelling Ryanair. My objection I think in part is the lack of transparency in the experience of booking a ticket. For example I carried out a little experiment today selecting a random trip - London - Madrid return 06-09 April. These are the results.

British Airways - £132.55 cost of 1 return ticket

Ryanair - £146.92 flight + £12 webcheck-in + £30 to have one cabin bag (15KG) + £6 Credit/debit card = £192.92, I neglected to purchase priority boarding, reserved seating or the Samsonite suitcase I had to opt out of.

In some senses I don’t mind too much the fact you might charge for hold baggage etc but the whole process here makes Ryanair very non-transparent, its hard to judge the actual costs. They are extremely restrictive on hold luggage as well so most people will need the £30 payment. The £6 fee to use a debit card is an outrage. This pricing excludes the fact that should you require a beverage on the flight Ryanair have prices that top London nightclubs envy - BA will cough up a free drink on your way to Madrid...

I exclude here that many of Ryanair's airports are over 40 miles from the cities they serve, significantly increasing the cost of travel. This is not the case with the Madrid route.

...Ryanair also has something called an Oxygen Reservation Fee, its £100, I dont know what it is but I feel more than a little nervous reading that it exists...

Experience

Flying on Ryanair is just not a pleasant experience anymore.

I no longer fall the trick that in order to guarantee fast boarding Ryanair flights will change from 'go to gate' to 'last call' status in an instant causing perfectly timely passengers to go running through the airport like Usain Bolt. It cost me quite a nice Italian meal to learn this lesson the hard way...

In order to encourage victims (or passengers if you prefer) to cough up an extra ten notes for priority boarding, those of us stingy enough not to have bought the pass are often made to stand/sit in a crampt and unpleasant environment before boarding - at times I have experienced this for a long period of time which is OK if you are a healthy individual in their 20s, not so fun if you are pregnant, elderly or you just happen to have a sore ankle.

Once on the plane assuming you didn’t pay extra to reserve the emergency row seat you likely find yourself separated from your travelling companions as the hoard charged onto the plane. On sitting you'll find that there is nowhere to put your book - the seat back pocket has been removed to save on cleaning costs. The safety card is printed on the back of the chair in front of you in garish blue and yellow whilst the above seat luggage holders are emblazoned with advertising. The synthetic leather seat not only makes you sweat if you wear the wrong clothes, it doesn’t recline either - so much for some relaxing shut eye! Not that you'd have a whole lot of chance to sleep on there...as you will be given the unenviable chance to buy not just drinks, but snacks, duty free and even lottery tickets during the course of the flight. In some cases I've also rather cheekily been offered the chance to buy rail tickets, necessary as the actual city I am travelling too is still a lengthy journey once I’m off the plane!

Let's just say that once i get off the plane, far from feeling I've had a restful journey I tend to be feeling like I’ve been dragged through a hedge backwards...

Company Policy

Michael O'Leary is a master at generating publicity, often incurring no cost. A lot of people in the UK remember him debating charging customers to lose the toilet in flight - just to grab some headlines. There has been a barrage of complaints against them for misleading advertising - quite rightly. Other tricks such as claiming to be the most punctual airline by grossly over-estimating flight times and then dramatically managing to run to that schedule are cheap tricks.

Whilst any one thing they do isn’t overly serious - Ryanair over time is starting to get a reputation as a bully - and at least in the UK that rarely does companies any good.

Competition

At the end of the day whether or not I like Ryanair or not isn’t overly important - if they have the routes I need I will use them out of necessity. The crucial thing is how competitive is their model. In truth - it’s not that competitive. It’s hard for fresh airlines to enter the air travel business, their tends to be a lot of sunk costs but its relatively easy for existing airlines to mimic the Ryanair model - many in fact have learnt much from Ryanair. Personally I think Ryanair have taken this all too far and maybe have over played their hand - a trip on Wizz, BMI baby or even Easyjet is much more pleasant than Ryanair...You don’t need millions to move to national carriers (see above), and as people tire of a hundred hidden charges they will start to move away from Ireland's people carrier...

For me it’s a sad it went like this...Ryanair and i were a great pairing...now I'm left wondering around Heathrow terminal 5, considering jumping into 'aspirational' middle-classdom by heading into Gordon Ramsey's and without a single Bright Yellow and Navy Blue luggage tag to my name.

Number of comments: 1

19/01/2012 10:54:14 - TLCP

I think the answer to the question posed lies in their profit growth. I do not have the industry's financials here but if Ryanair achieves in-line to above the industry's average then that means their aggressive strategy works for them. Demand from the middle-class may have fallen but that is not neccessarily a bad thing - the company may have intentionally narrowed down their target segment and focussed on driving volumes from that segment instead. Even if demand has fallen, their increasingly agreesive cost cuts may mean that profits have continued to growth. It's all about the bottom line for the company after all. The airline industry is a bit like supermarkets I think. I would not choose to shop at Lidl or Asda but they seem to be doing fine without people like me.

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