13 October 2009

Panorama fails to Ã¢â¬ËœexposeÃ¢â¬â¢ Ryanair

Last night’s BBC 1 Panorama investigation failed to expose much new on the budget airline giant’s successful business model, according to an expert.

Janet Titterton, business planning director at ancillary revenue specialist Collinson Latitude, said the programme provided "little new information" about the Irish carrier’s unprecedented success.

"It’s easy to criticise the Ryanair strategy of unbundling, but it appears to be working in a sector besieged with financial challenges," she said.

Ryanair CEO Michael O’Leary had accused Panorama of planning a ‘hatchet job’ on the airline and a row blew up over guidelines for him agreeing to be interviewed on the programme (see previous TravelMole story).

Titterton said: "The danger for brands looking to emulate the model is that they become so focused on the incremental revenue that can be derived from product unbundling, that they forget about the promises they’ve made to their customers.

"Ryanair’s model succeeds as it remains true to a low cost carrier business strategy, pushing its 'best price' positioning.

"Conversely, competitors that have for years promised superior service will face the disdain of their passengers if they suddenly remove the add-on elements that their customers have come to expect as part of the flight," she warned.

"A more customer-centric and sustainable growth strategy would surely be to identify opportunities that add value to the core product and the brand-customer relationship.

"The next generation of ancillary revenue initiatives and programmes are looking to achieve just that."

Titterton added: "It’s too simple to suggest that the Ryanair model is wicked. More to the point is the reality that brands survive when their priority is to build long-term customer relationships - not short-term profits."

by Phil Davies

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Your Comments (10)

Ryanair not so cheap

On a recent trip to Europe, I found myself purchasing the low cost Ryanair tickets to get me from point A to point B. While the advertised price cannot be beat, Ryanair is dedicated to emptying your pockets elsewhere. We arrived at check-in 5 minutes before it was scheduled to close, people still in line, when a Ryanair rep two counters down signals for us to her. She informs us that we now must pay 30 Euros each to check our bags because we were late. Now my fare has suddenly become not so cheap. If this happens, you will be required to go to another Ryanair desk, somewhere else in the airport to pay while your luggage is tagged and put on the conveyor and sent to the plane. This leaves a problem, what if you don't make the flight and your luggage does?

By Dave Hurley, Thursday, October 15, 2009
O'Leary: All Verbal Flatulence

O'Leary is a publicity hound who only seeks to see his name in print. Where are these much touted 'standing seats' or the coin-operated toilets? Just more Clear Air Turbulence.

By J Hewson, Thursday, October 15, 2009
The investigation that never was

This programme was a real damp squid, telling us little that we couldn't find from the Ryan Air web site. The story that really needs investigation is the allegations that some airlines seem to use bad weather as an excuse to cancel flights that are only half full. The reviews on http://www.airlinequality.com/ contain plenty of evidence that needs investigating. If people realised the true cost of getting home when a bucket shop airline decides to cancel, they would think twice about using them.

By Nick Chaple, Wednesday, October 14, 2009
Yes, but

Price is also actually a "value". It may be a crude one, but it nevertheless is something that consumers greatly value - as long as they get the product that they have ordered, which in the case of Ryanair they do.

By Nick Cooper, Wednesday, October 14, 2009
Price and value

I was taught that you have to add value to secure loyalty. Ryanair do the complete opposite. They focus on price and that is why they are successful. O'Leary is arrogant because in a business that is losing millions he is successful. He has the grounds to brag in my opinion. What do they say, 'How do you make a million in the airline industry?... Start with a billion. There is a concept called the strategy clock and Ryanair know exactly where they are on that clock. The problem the others have is they don't and are fudging being either high end or mediocre. Customer value is key and companies like BA don't provide services that I would value enough to pay the premium. That is their dilemma.

By Andy Parr, Wednesday, October 14, 2009
A good advertisement

Wish we could get that free publciity - what a fantastic programme for Ryanair. If this is the best subject that Panorama can find and do, it is time to close the show down.

By Nick Cooper, Tuesday, October 13, 2009
short-haul leisure travel is a commodity

I used to work for an airline, trying to promote the 'superior service' that was allocated seating and inflight meals, but the fact is these extras really aren't worth the extra cash and that short-haul leisure travel has become a commodity. Consumers will simply choose the cheapest option as we feel we have the right to a holiday now and we're unwilling to pay double the price for a seat on a traditional carrier just because of an allocated seat and a plastic-y excuse of a 'free' meal! I don't particularly admire O'Leary's media approach and (sometimes) apparent disdain for customers - although at the same time it does make for very entertaining reading! But at the end of the day most times I want to go somewhere they are the cheapest and I'm sorry, but for me - as for I'd say at least 80% of other leisure travellers - that sells it! I am not exactly wallowing in cash (unfortunately!) so I will go for the cheapest option. And at least the fact that Ryanair is so upfront means that I am left with no disillusions as to what will happen if something goes wrong; if I have to change dates, names, don't turn up on time, forget my boarding card etc etc... I know full well and expect to the (extra) price. I have also flown Ryanair several times now and I have to say - I have never had a problem. Check-in is simple and speedy, as of course you do it yourself! - and boarding, even without an allocated seat or paid-for 'priority boarding' has never been a problem. The charging for a toilet thing does seem particularly ridiculous though and I have to admit that may swing it for me... but only to go with another low-cost!

By Sarah Chambers, Tuesday, October 13, 2009
Long term relationships!!

I didn't see the programme last night but my wife did and said there was nothing new whatsoever. But to say that long term relationships with it's customers is a priority for Ryanair seems to me to be one of the biggest jokes of the year. Michael O'Leary may have been the catalyst for the huge growth of Ryanair but I believe that he will also be the reason for its demise. There is only so far that they can go in irritating passengers which seems to give O'Leary and an immense amount of pleasure. I use Ryanair quite frequently because they are the only airline to fly to the particular airport that I prefer to go to. But, even though I admire their airline operation and have never understood why the major charter arlines of the UK have not been able to emmulate some of the best features of it, there always seems to be an antagonistic attitude towards it's passengers. Not by the cabin crew who I have found generally to be very reasonable but by the whole management attitude. There will be a level of irritation that people will not want to accept, whatever the price. Mine will be the installation of extra seats by removing toilets and then charging for it's(one toilet!)use. If the aircraft were always full, I could understand it but I have only ever once been on a completely full aircraft in about 40/50 flights with them. By not using Ryanair I will have to fly to another airport an hours drive away but I will do so if they go ahead with the stupidity of the toilet scenario.

By nigel wallington, Tuesday, October 13, 2009
I know what to expect from Ryanair..

...and will choose to fly with them or not depending on my needs. I was a Gold Card traveller with BA and always tried to use them for business and leisure wherever I travelled around the world. BA is now my least preferred airline. They treat their agents like dirt and the service for the traveller is inconsistent. I feel like a low-cost traveller on short haul! The food may be 'free' but it is so bad, that I refuse to eat it!

By Lou Valdini, Tuesday, October 13, 2009
Expose what?

What is there to expose about the Ryanair model? They are very successful and so they might be but in my experience, the model won't survive. You just can't keep clients happy with such a poor experience and they are not even the cheapest. ok, so the flights look like zero cost but research last night showed a "zero" cost flight to Murcia ends up at &#pound;75 in reality. Jet2 is &#pound;85 but you get a seat and therefore no animalistic stampede. Ryanair drinks are served in plastic bags and do tend to make you feel a little desperate, so you end up taking the powdered soup instead or even worse a small bottle of water at &#pound;2.70 (Shocking!) Easyjet was only &#pound;69 (Alicante) but somehow, and I'm not sure why appears to be just a cut above the Ryanair service, but it certainly does to me. I go a long way to avoid using Ryanair ad I guess others must do the same. I think Ryanair are quite capable of exposing themselves for what they are and the consumers will vote with their wallets.

By Kenny Picken, Tuesday, October 13, 2009