Panorama fails to ‘expose’ Ryanair
Monday, 13 Oct, 2009
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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
Phil Davies
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