Ryanair Strategy
M62 / pee / All,
Sadly, Ryanair has a history of playing politics with its routes and bases. That is unlikely to change. The company has demonstrated a preference for playing "bullyboy" with airports and regional governments rather than working in partnership with them to build up sustainable and profitable networks. The company's disregard for its own customers' travel plans is legendary. 'Common Sense' seems to be an alien concept at Ryanair; it is simply 'meet our demands' or 'toys out of pram' with them. As you point out, the customers do (eventually) notice. And a sustainable business needs repeat business.
Here in Manchester, Ryanair pulled its network (except for the ultra-profitable DUB operation) in a fit of rage when the airport refused to provide use of its valuable services for less than £3 per passenger journey. A reasonable sum for use of facilities requiring millions to run each year, and one which passengers would not baulk at paying as part of their fare. Warning to Ryanair: in these tougher economic times you may run out of airports and local governments willing to operate as a charity.
I am sure that there remain afew customers who will dutifully follow Ryanair to a distant field of its choosing when these games are played. But many will not. When you abandon a large conurbation on a whim you abandon many customers too, and their negative impressions are ingrained (and communicated to others) for the long term. Ryanair's run of success through its growing years has allowed hubris to build, but ultimately customer disaffection (loathing?) will eat away at the business. Customers don't just forget and move on. They learn - and avoid businesses which have let them down in the past. A mature company increasingly NEEDS a positive relationship with its customer base.
In my case, I do not have an agenda against Ryanair or any other no-frills operator. (Surprised?!!!). On the contrary, it frustrates me to see a potentially great business which is prepared to jeopardize its whole future by stitching up its customers, and, publicly slagging off its industry partners to the media. Alienating customers, p*ss*ng off airport operators, squashing essential suppliers, bullying local authority officials ... a business which does this will eventually see the backlash impact its bottom line (and the share price). Once those city boys turn against you - watch out! Especially if your company has no friends left amongst its industry partners.
Returning to the case of Ryanair specifically, I actually believe that fundamentally it is a good business, but one which is making major blunders which will return to haunt it in the future. The whole 'hardman' act and "we're just a bunch of Paddies and we don't care" routine works fine for a youthful company in its growth phase. But Ryanair is a mature business now. It must recognize the need to realign its priorities. Build loyalty with the regular customers - don't abandon them, cancel their bookings, or enrage them with hefty charges disguised as penalties for minor infringements (online check-in errors etc). Develop a positive relationship with airport and ground-handling partners - acknowledge that their businesses need to pay their way too. There is a finite number of airports in Europe - and they are all now well aware of Ryanair's hardball reputation. How long can they afford to offer free service? Regional Governments across Europe are in fiscal crisis - sweetheart grants for airlines and subsidies for basket-case airports will become impossible to justify to voters whilst core local authority services are facing the axe. Tourist Authorities will be cut back or scrapped entirely. Wake up, Ryanair! The free ride is coming to an end ... you are going to start needing some friends!
Speaking personally, I am still prepared to book with Ryanair if they offer me a service which is cost-effective and convenient for my travel plans. Unfortunately (for Ryanair's bookings), I am in Manchester - one of the conurbations which Ryanair abandoned because it failed to 'persuade' the airport with its "offer which we could refuse". As a result, my own 27 current flight bookings at the time of writing include NO sectors operated by Ryanair. In the months leading up to Ryanair's tantrum at MAN, I flew 22 sectors with them. I am the epitome of Ryanair's problem going forward. I am one of those would-be customers left marooned by Ryanair's preference for playing politics with airports rather than developing a mutually beneficial relationship with customers. No service? No booking!
Ryanair may kid themselves that their abandoned customers will obediently follow them to the inconvenient airstrip fifty miles away. Some will - if the deal is amazingly cheap (margins, anyone?). Many won't. I would happily pay MAN's £3 passenger charge to use its facilities ... in fact, I am doing so by making bookings with Ryanair's competitors who still offer me a convenient service from there. What I will not do is waste my day traveling to Ryanair's favoured 'airport-du-jour', paying avoidable fares, charges and hotels along the way (alot more than £3!) to make the whole thing work. Many others think as I do.
It is far easier for a business to retain an existing customer than attract a new one (if it offers a positive experience). With money tight in both the public and private sectors, a wise business will take customer retention to heart. Take a look, Ryanair. Read the comments of M62, pee, those on customer review sites. What is the message? Never again? Can't trust them not to change things? They ripped me off 'cos my boarding pass wouldn't print? Is this the path to customer loyalty? Perhaps the time has come to make the choice between endearing yourselves with your clients, or facing a slow decline by a thousand cuts.
Are you going to make yourself indispensable to customers, or irrelevant to customers? [In the case of my own example, flying from MAN or from some place miles away].
Good luck with that decision.
SHED.