September 29, 2013

The misery of a Ryanair flight is a common tie that binds

Posted in Financial Times · 30 comments ·
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A few years ago I was at a wedding in Dublin – an Irish bride and her new English husband. We were all warned to be on our best behaviour. The English family were strangers – and silent, socially awkward strangers at that. The two families had little in common.

The mother of the bride dreaded the prospect of the contorted small talk that lay ahead. There isn’t enough gin in the world to tide such a mother over safely on a big day out. “I mean, what do you talk to these people about?” she complained. “Ryanair of course,” whispered the bridesmaid confidently.

Within seconds, the shy and reticent were suddenly chatty storytellers, trading diabolical stories of unspeakable public degradation. Ice broken. Job done. You can count on Ryanair – the international code word for consumer trauma – to spice up any uncomfortable social occasion. Booze does the rest.

Previous generations had their war stories; the Blitz and food rationing in England, 1916 and the General Post Office in Ireland – these are examples of the common ties that bind that are readily understood by all. Our generation has Ryanair.

Everyone has a story. My own personal favourites involve the stand-offs at the departure desks between outraged, sweating travellers and stern and surly flight attendants, as customers try to cram their beloved possessions into the narrow cages used by Ryanair to decide whether a piece of luggage is too big to be carried into the cabin.

So why did the company’s normally uncompromising and abrasive chief executive Michael O’Leary suddenly announce a kinder Ryanair? The company wants to make the experience a little more pleasant to attract business customers. What has happened to the man who urged staff to steal pens from hotels to keep down costs? Is Mick taking the Mick?

After all Ryanair will carry 81m of us this year, dwarfing British Airway’s 28m and comfortably ahead of Lufthansa’s 60m. The Irish airline makes just over €7 profit per passenger and is sitting on a cash pile of €3.5bn at a time when other carriers are stretched. It flies to 171 airports across Europe and has just done a deal with Stansted to deliver an extra 7m passengers to the airport over the next six years.

Earlier this year, Ryanair ordered 175 aircraft from Boeing, which should have retailed for $16bn, but industry sources indicate that Mr O’Leary might have got them for half – ruthlessly sensing Boeing’s difficulties and understanding the potency of his own firepower.

Such chutzpah is not the work of a man worried about the future. This type of audacity indicates that the Ryanair model is not broken. If it is not broken, why fix it? For years, the company’s approach has been “cheap is enough”.Management believes that people do not fly to destinations but fly at a price. By offering a price low enough, it will generate demand for a city or a country where there was previously no demand. If you have ever seen Geordies on stag nights in obscure towns of the Italian Alps, you will agree Ryanair has a point.

The management’s view that people will put up with no end of hassle if the price is right was best exemplified by Mr O’Leary’s blunt retort to passengers who complained that they did not even get a cup of tea during a delay. “You only paid a fiver, buy your own tea.” Charming.

So why did brusque, “in your face” Mick turn into the luvvie-duvvie, soft, cuddly and caring Michael last week? The reason might be in the numbers. Ryanair’s recent figures have been disappointing. Yields are down, prices are lower and demand is soft. Shaky numbers that might have been attributed to weak sterling and the warm summer have continued into September.

Ryanair is worried. Could there be a limit to our tolerance of casual slights, hidden charges and a website that looks as if it is trying to hawk everything that has just fallen off the back of every lorry in east London? Could passengers be saying “enough”? The stories may be funny in retrospect but perhaps we could not be bothered with the ritual humiliation to save 30 quid?

The interesting thing about Mr O’Leary is that he does change his mind. The most significant example of this was over the internet. When I first interviewed him in 1999-2000, he was a web sceptic. However, once he saw the power of the net, he changed his mind and embraced it more enthusiastically than many competitors.

Maybe his Pauline conversion is real. After all, he has mellowed in recent years. Could it be something to do with having four children under the age of eight?

Described by those close to him as “sometimes in error, never in doubt”, it is clear that if he has decided that it is profitable to be nice, Ryanair will be nice. Quite what a nice Ryanair might look like is anyone’s guess. Free shoulder massages? Copies of the FT being handed out by smiling representatives at Stansted, urging us all to “have a great day”? It is difficult to imagine. But something has clicked inside the head of the most successful chief executive in the airline business.

If it leads to a change in the Ryanair experience for 80-odd million of us, how are you going to break the ice with an interminable bore the next time you are stuck with one at social gatherings? You never know, we might miss the old Ryanair. Be careful what you wish for.

See original FT article here.

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  1. hibernian56

    God bless RyanAIr.

    Am I first?

    • Adam Byrne

      You sure are hibernian56. Odd for an article to go up on a Sunday.

      • whatamess

        odd indeed

        maybe it’s the heat from the kitchen from the last article that has made our host exit stage , in haste?

        no harm if a few feathers are ruffled

        Maybe the next stop,-Tony Brogan’s very insightful obersvations and to get our hosts opinions ?

        dare DMW share his thoughts ???

        i wonder

        good nite all

        thanks for all your contributions

        av a good week

  2. No …pragmatically you were …philosophically ‘non’.

  3. Ryanair shares slumped ..and are destined to be lower …and no dividend in sight ….nothing ‘clicked’ with that mick. He was elbowed out to the edge and with a warning ‘or else’.

    The late Tony Ryan the founder had runs in with him due to his crazy antics and had he been alive today there is no doubt he would be tabling a motion that he be replaced which is what will happen in good time.

    Ryanair has many problems ahead and too numerous ..notably some are …pilots demanding safer guidelines and no harassments of their opinions with legal threats …French bureaucracy constraints and the enemy of the ENERCHY …Norwegian Air raising the ante to compete in cross atlantic …weaker political clout in Europe and much more .

    The mick in the shine that was is now clouded and the dying sun ahead only leaves a print of shadows of what has been and soon no more .

    I expect the Vikings to arrive to re-enact the Battle of Kinsale once more with ease and success …and micks costs.

  4. tkirwan

    David, Michael is nothing if not astute. There is something in the air that is telling him to “mellow”. Everyone, including myself, that I talk to about airline choice is unanimous – if Aer Lingus is within a decent amount of the RyanAir price, it’s automatic. Recent RyanAir TV Ads compare UK for €12 against Aer L. € 27…..that’s a No Brainer choice. Once price isn’t an issue, RyanAir is dead. I’ve always felt this was his real fault line, I’m a great admirer of what he’s done for air fares and little Ireland, he is fallible ….like the rest of us!

  5. michaelcoughlan

    Hi David,

    What’s your point?

    • whatamess

      there is no point

      it’s simply product placement

      gotta get paid,yo!

    • Colin

      Michael,

      It is probably written for an English audience, that’s why it has thrown you. Ryanair carries thousands of people every day between Britain and Ireland. It cements the links between the 2 countries.

      David is free to write about what he wishes, including subjects other than economics.

      He is not the Messiah, and does not wish to be viewed as such I’m sure. Once you accept that, you can benefit more from his wisdom.

  6. HoChi

    There has to be a balance between frugal but successful Ryanair, and profligate but less succesful AerLingus. Numerous travel surveys have shown Ryanair to be sometimes more expensive that the ‘established’ airlines when you cost travel from home to hotel , yet people still THINK Ryanair is the cheapest there is – smoke and mirrors from Mick again, proving that the travelling public are stupid ?

  7. DB4545

    I’ve said in the past I love and hate the man at the same time. If you remember 200 sterling flights home at Christmas with Aer Lingus 25 years ago you have that jumped up little bo***x to thank for changing the landscape. The man doesn’t have a love affair with planes he sees them as nothing more than flying buses. Considering he used the Southwest business model I’m sure he has his own reasons for not using the Herb Kelleher approach with employees. Faced with a choice between laying off employees or selling off a plane Herb Kelleher sold the plane and asked the employees to work harder and so got complete loyalty from employees.
    I just don’t know why Mr. O’Leary didn’t take the same approach considering the level of pi**ed off employees on websites. He’s responsible for some extremely nasty and penny pinching activities with employees which have to backfire on him at some point. I make sure to check prices through skyscanner because he will clip you if you let him but I’ve usually got value for money and I’ve never bought a lotto ticket or food on a Ryanair flight.
    Maybe he sees the writing on the wall just like he did with the website taking over from travel agents. If he sees a profit in nice Ryanair will be nice but he’s got his work cut out to turn Ryanair into Southwest for customer relations.

  8. Grey Fox

    An extra treat on Sunday David? or maybe your taking Monday off! Cheeky!

  9. 5Fingers

    Ryanair’s model of no frills was sound. He kept his costs down by leveraging the vulnerability of an oversupplied global market for pilots, flight attendants and tourist destinations for the naive and the desperate sun worshippers. The guy made and tuned the company to be a bottom fisher. Guess what? He’s hit bottom. No where to go. He has destroyed all goodwill, all loyalty and any redundancy

    • 5Fingers

      No that the low end of the market is well busted Tight margins go to zero. No where else to run. Likely scenario is to shrink more and more. Face it, cost of travel is not the biggest cost to business. Flexibility is now in demand and Ryanair just cannot cut it.

      Looks like that cashpile will be dug into And watch as planes get sold off.

      Sad really. Ryanair could have had a multi faceted business model or moved into something else. We shall see.

      • Adam Byrne

        I think it’s a bit early still to be writing the obituary Philip!

        • 5Fingers

          Nope, the real cost of Ryanair is now being understood both by customers and now themselves. They have shot their bolt well and truly.

          • Colin

            I doubt it very much Philip. Ryanair have a large loyal informed following. I will only fly Aer Lingus as a last resort.

      • Tony

        Multi-faceted business model? Sure it already does, as alluded to in the article above. ;)

        Add to all that the amount of crap they sell on the planes. I’m surprised there isn’t a Ryanair trumpet for sale. Maybe O’Leary’s too busy blowing them all. :)

        • Colin

          You may have stumbled upon a good business idea there Tony, selling baby trumpets. Doesn’t have to be brass, plastic will do the job.

  10. DB4545

    I wouldn’t write Michael off that quickly. As I said I don’t understand why he’s behaved the way he has with employees. He’s a sharp cookie, he’s risked his own money in the past to get where he is, and he doesn’t suffer fools or politicians at all. He gave the politicians both barrels when it might have been prudent as a businessman to schmooze them. He’s loyal to the shareholders and he’s been we’ll rewarded for it. I’ll stand corrected but as far as I know he pays his taxes here unlike some major players and personalities who vacuum cash out of this economy but reside elsewhere for tax reasons.
    Maybe he’s coming to realise that people aren’t stupid do the maths and factor in full costs such as transport costs to a city centre, baggage costs, credit card costs, convenience of flight times etc. and like any customer they want to be treated respectfully when they spend their money.

    • 5Fingers

      Loyalty to shareholders is only based on one metric. Profit. Right now, it’s going the wrong way.

      Employees, Customers and items of utility. One works and One pays. The trick is to squeeze both for maximum margin.

      Tony Ryan was the entrepreneur.

      If you eliminate slack everywhere, remove all redundancy or backups or goodwill, you become over exposed to the next unpredictable event. Guess what? A good summer, people at the low end of the market now have no money, increasing numbers of business customers who want flexibility and little hassle and rising fuel costs…oh ohh..

  11. I managed to escape Ryanair the last trips as I took a bike and went Sailrail from Ireland to an English station and reverse, England to Ireland. total cost 48-58 euro. If you use Stena they do not charge for the bike but Irish ferries do. An extra 9 Euyro/pound depending which end you are.

    time wise not a lot of difference when getting to and from the airport is concerned.

    Two or three hours on the ferry and 4 hour on the train gets me to Southampton or Exeter. Includes 45 lbs. of luggage too. Seats are more comfortable, the scenery is better and one can get up for a stretch.

    If it is a back and forth business trip, no luggage the Ryanair fits the bill. Anything else and it is second choice. I hate living in fear that I forgot something and I’ll get hit for a fast E50.

    • EugeneN

      “time wise not a lot of difference when getting to and from the airport is concerned.”

      If you are going to Liverpool from Dublin, maybe. Not anywhere else. I missed booking a flight from Bristol to Dublin once, and had to take a train, boat, and train ( since it came in at Wexford) and that was about 8 times slower.

  12. I have spent three different Christmasses holed up at Stansted because Ryanair would not fly due to weather ….anyway as usual I try to make a positive out a situation and went around chatting up many and had great fun getting to know so many .When everyone are in the same boat survival instincts set it .

  13. EMMETTOR

    What I’ve read is that “Nice” Michael was created at boardroom level, where at least two of Ryanair’s directors were appalled at the level of customer complaints. His PR stance, which could be summarized as “Fuck You”, has been perverse, forging base metal from pure gold, given what Ryanair has delivered to consumers and has to be seen as a reflection of his personality, which appears to be repulsively immature, even if knowingly so. Stories abound, the way he dealt with his wedding organisers, for example, which indicate his delight in fucking people over for a buck and while it’s ok to appreciate the genius of his business model, if you actually like him you’re probably a sociopath.

    • DB4545

      I like what the man has done in relation to turning the cosy airline industry on it’s head. Aer Lingus and BA ran a nice cartel absolutely fleecing customers. As I’ve stated 200 sterling for Dublin to London flights TWENTY-FIVE years ago. Ryanair has it’s own little techniques for fleecing customers if you’re not careful but I think most people have the system worked out and they act accordingly.
      I don’t doubt he’s absolutely ruthless but he doesn’t pretend to be your best friend. What I don’t get is the nasty streak given that he’s had a very privileged upbringing and education which is supposed to give a bit a polish and élan. The flight attendants employment contracts(they are effectively employed by an agency) make the day labourer/ subby system look socially progressive. Given that he shadowed Herb Kelleher while adapting the Southwest model for Europe I’m at a loss to understand his contempt for employees.
      I saw him on RTE last night and something has definitely spooked him because the chutzpah of old was gone. I hope for the sake of the travelling public he hasn’t bitten off more than he can chew in a Sean Quinn way because the travelling public will be the loser.

    • Colin

      Some family members of mine booked Ryanair flights a few months ago at €160 return per passenger (much cheaper than Aer Lingus for same airport departure and arrival). Two family members could not proceed to travel at short notice due to medical reasons. Proof of this was supplied to Ryanair. 2 Weeks later, full refunds were credited to their bank account for the passengers unable to travel. No fancy letter drafted, printed, placed in envelope, put through franking machine and mailed. No, not needed at all, just the refund was all they were looking for. They were delighted to find this had happened without hearing from Ryanair. All done quietly without any fuss or grandstanding. Mick doesn’t waste money or look for happy clappy feedback.

      But Joe Duffy and the South Dublin Chattering Classes aint interested in hearing about those positive news stories.

      I dread the day when Mick O’Leary packs it all in. Aer Lingus will be back to raping us as soon as.

  14. TerryL

    Just purchased three tickets with Aer Lingus to France for next year. Reason – they were €20 cheaper than Ryan Air!
    Price is what matters to me on short journeys.

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