Shame Game Low-cost Carrier Ryanair
Have you ever wondered if the term "customer service" applies to low-cost airlines? James Stuart who heads Hong Kong's Brand Company has inked a piece about Ryanair which helps shed light on the subject. We are publishing this with his permission and that of the Bangkok Post -
"My father was Irish and I've always had a soft spot for The Emerald Isle. Before each visit there's part of me that imagines the way it was last time (friendly, sociable, engaging, fun and often fluid - both from rain and The Black Stuff) cannot be repeated. But it always is. After two days on our last visit to Cork and Connemara my 12 year old son asked why the Irish are so much friendlier than the other folk across the sea to the east. And that visit was made as Ireland was plunging deeper into the economic mire. Maybe it is because the Irish are so used to crises that the attitude of many in the face of the slump is 'what's new?'
It's this effortless Irish geniality that leaves me befuddled by Ryanair. It's Europe's largest regional airline and it's Irish.
The first surprise is perhaps that such a huge airline began in Waterford in south-east Ireland; hardly an aviation nerve centre, although well known for the production of fine crystal ware.
The second surprise is that Ireland's most recent commercial success story does not reflect seemingly typical Irish traits; in fact quite the opposite. CEO Michael O'Leary has been variously described as arrogant, contradictory and abrasive. Sit back and wallow in words of this sensitive Celtic poet. On passengers who forget to print their boarding pass: "We think they should pay 60 euros for being so stupid". On refunds: "You're not getting a refund so **** off. We don't want to hear your sob stories. What part of 'no refund' don't you understand?" On environmentalists: "We want to annoy the ******* whenever we can. The best thing you can do with environmentalists is shoot them". There are plenty more where these came from.
Ryanair was recently voted Europe's worst short-haul airline by readers of Which? Magazine (although to be fair to the airline it says its own customer feedback paints a much rosier picture).
The third surprise is that such an obviously unfriendly brand should be so commercially successful. Perhaps this suggests that my own thinking on the creation of a unique and positive service attitude as a pre-requisite for brand success is misplaced. Ryanair flies to lots of places. It's cheap. I mean, who cares whether they have a likeable and distinctive culture? Maybe those of us in the hospitality industry have something to learn: how about 'Rude Hotels: Get Your Own Damn Breakfast!'
So what was behind Ryanair's success?
One of the more obvious reasons is that, as pioneers, they achieved a certain scale during the early and less competitive days of budget air travel and they were then able to pass the economies of that scale on to passengers. People were so delighted that they could afford to fly that the quality of the offer was secondary (and there were precious few other affordable brands to choose from). Also, the desire for frugality was heightened as Europe fought its way through various recessions (including the lingering current economic slump). Savings mattered to consumers and Ryanair represented the best savings.
But, as of April this year the Eurozone officially moved out of recession: things have begun to pick up. But, not, it seems for Ryanair, as Mr. O'Leary recently announced a cut in its profit guidance, in part, and in its own words, because of the continuation of the poor shape of the economy and increased competition. Its share price dropped 15% on the news. Yet, at the same time its biggest rival, Easyjet, has revised its forecast upwards as it makes inroads into the corporate travel market, continues to upgrade its online presence, introduces seat allocations for the first time and nudges ahead of Ryanair in terms of punctuality. It's also embracing a refined positioning that reflects - in a nutshell - 'warmth'. It may sound fuzzy, but it appears to be working. And it's certainly something Ryanair appears to have little of.
However, O'Leary has recognised that his airline needs to start being more customer-friendly: "We should try to eliminate things that unnecessarily p*ss people off" he said recently in Dublin.
So, why is Ryanair hitting turbulence, relative to its unhindered success in the past? Maybe it's in part because, with a little more disposable income, Europeans are now prepared to pay a touch extra for a softer edge to their service and increasingly appreciate value-adds, rather than discounts. Another reason could be that customers were prepared to put up with a brand that was brash and anti-establishment when it was small. But now, in some respects it is the establishment, and many folks don't take to kindly to what they see as a combination of big & arrogant. An irreverent feistiness works well when you're David, because consumers associate with the 'underdog' tag. When you're Goliath it's harder to swallow.
But now, with competitors improving and growing again in number, the recession slowly receding and customers perhaps tiring of the Irishman's tirades, it will be interesting to see how Ryanair evolves its brand from a 'challenger' to 'challenged' position.
One thing is for sure; in order to sustain their remarkable success, they are going to have to blossom into a brand that embraces positive values, rather than relying so much on price, product (which can be copied) and pushiness (which can be downright offensive).
Maybe Mr. O should inject a little more of what his compatriots are best known for. In a 2011 UN poll Ireland was found to be the happiest nation on the planet. Now there's a thought, 'Ryanair: The Happy Airline'. The mind boggles. Slinte."