CHOWNEY ON REPUTATION
How Ryanair could use online to its advantage
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News reached me yesterday that budget airline Ryanair has been accused by the Office of Fair Trading (OFT) of being “puerile and childish” over its online payment policy.
John Fingleton from the OFT made the comments in relation to fees that are added when customers use all but one type of credit card (a pre-paid Mastercard) to book online.
He told The Independent the firm uses a legal loophole which allows it to advertise cheap fares because it provides at least one free payment method.
Ryanair has, as usual, taken an assertive standpoint, defending its business practices in the form of a statement from head of communications Stephen McNamara. “Ryanair is not for the overpaid John Fingletons of this world but for the everyday Joe Bloggs who opt for Ryanair’s guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 and £10,” it said.
However, as this story ripples through the national press, I’m left thinking that in a few days’ time this won’t have had much impact on the Irish brand’s reputation at all. Although these are fairly damning remarks, it’s no secret that low-cost airlines add hefty fees on top of one-penny promises. The firm is no stranger to bad press, with the OFT’s comment being the third potentially disastrous story which broke about Ryanair over the holiday fortnight.
Ryanair has had a tempestuous relationship with the online space (to say the least) after it denounced bloggers as “lunatics” and “idiots” last February. A member of staff had responded poorly to criticism of the brand on a web designer’s blog and things only got worse as the comms team denied any official involvement, then backtracked while releasing a statement about not wasting time engaging with the blogosphere.
Based on that one incident alone, it would make a refreshing change to see the company start to build bridges with its online community. Even though the OFT comments are unlikely to affect sales (people fly with budget airlines for price alone, not for ethical reasons or great service), if Ryanair did this it could leverage customer opinion in a positive way. Comments made in forums or groups could be pointed to, proving that the people who use its service really don’t care about the things outlined by the OFT.
As McNamara’s statement shows, the company understands why its customers fly with Ryanair, so why not use this to its advantage?
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Readers' comments (11)
Will Cooper | Mon, 4 Jan 2010 12:40 pm
Is it not the case that most people fly with ryanair because there are no other options on the route they want to go.
i know quite a few people who now are prepared to pay the £50-plus extra NOT to fly Ryanair, simply because of the shoddy treatment they receive.
the attitude of Ryanair, for the most part, comes across as "You have to fly with us so put up and shut up." As you rightly say Vikki, it would be nice to see some positivity from them for once, rather than smugness.
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Anonymous | Mon, 4 Jan 2010 1:15 pm
I don't quite understand this post. Wouldn't it be nice if Ryanair was nice? Well yes, but nothing in its history to date suggests that it cares too deeply about upsetting people. And as a flipside to that, would devoting extra time and resource to cultivating an online community deliver extra sales or profit for Ryanair? For such a hard nosed commercial operation, the answer appears to be no. At least for the time being.
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Vikki Chowney | Mon, 4 Jan 2010 3:10 pm
I can't say I'm entirely familiar with all of Ryanair's routes, but you could be right. At the moment though, I still think a lot of people are choosing price over service for short-haul flights. It's the same for Easyjet, I wish they'd both wake up a bit.
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Raphael de Souza | Mon, 4 Jan 2010 3:29 pm
Leveraging an online presence will not only give them (Ryanair) insights into the subtleties that affect (negative and positive) their flight sales which they can address in the case of negative feedback but capitalize on with positive feedback.
Whether is the image of the group rather than the actual offering that is not seen in the best light still has room for debate, after all:
1. "it does what it says on the tin" (to an extent)
2. Bad press tends to resonate more than good
3. Despite the bad press they are still seeing positive growth in difficult times "Pre-tax profits came in at 419.4m euros ($619.4m;£376.2m), up from 105.2m euros in the same period last year. " (BBC 2nd Jan 09) (so that must count for something)
So perhaps we shouldn't be to linear in our thinking as to what influences consumer behavior and with At the end of the day its the customers that make the final decisions as to whether they will fly with Ryanair or not.
But understanding them alot more through "word of web" like you have said Vikki can only be positive.
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Roman | Mon, 4 Jan 2010 6:04 pm
I don't think that Ryanair needs it. The company wants to remain controversial. bad & free advertising is part of Ryanair's PR strategy.
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Vikki Chowney | Wed, 6 Jan 2010 9:39 am
@ Anonymous It's not just about 'being nice' though, it's about appreciating your customers, which is core to building a loyal relationship with the people that pay the bills.
Yes, Ryanair does pretty well by providing cheap flights, but time and time again we see that the companies making an effort to look after their communities are the ones that do better in the long run. You never know when a brand might need that kind of support.
@Raphael Thanks for your thoughts. As you say, its the customers that make the decision and that insight can be invaluable. Maybe Ryanair just doesn't need to be the kind of brand that cares? I think it would be foolish to rely on price alone, but it's not up to me :)
@Roman As per my previous points, maybe Ryanair doesn't need it now, but controversial only gets you so far...
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Kevin May | Wed, 6 Jan 2010 9:58 am
I remember with much amusement all the hand-wringing in the trade and digital media after (during my time at Travolution) we broke the "lunatic bloggers" line from Ryanair.
Bloggers up and down the land were beating their chests loudly about how awful it was Ryanair wasn't embracing the online community more.
The Times even ran a story on it.
The net result? Nothing...
Ryanair doesn't need to care about bloggers and the twittering digerati. Disappointingly for that subset, consumers probably don't care too much either.
And to say the airline should reach out more to the online community is rather amusing. It did that years ago when a strategy was put in place to sell most of its bookings online. It's audience are web-savvy consumers already.
BTW: I'm not a Ryanair apologist, by any means. :)
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Vikki Chowney | Wed, 6 Jan 2010 10:22 am
Thanks Kevin, nice to hear from the original source on that blogger fiasco. Glad to hear that you agree that this won't actually do anything to their reputation as well ;)
However, my point is not about reaching out to the community (especially not the twittering digerati, as you say) to try and drive more sales online. It's to appreciate them a little more. It might sound idealistic to some, but you never know when Ryanair might - heaven forbid - actually need to rely on something *other* than price/being default airline for a specific route.
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Anonymous | Wed, 6 Jan 2010 11:50 am
I'm afraid I agree with Kevin, although I apologize if when I summarised your original point as about 'being nice' over-simplified things.
Obviously most (enlightened) companies realise that they have to rely on customer goodwill as these are the people who pay the bills. If the CEO believes this, then outreach to the online community isn't a nice to have luxury - it's a necessity, especially in these straightened times.
But there's the rub. There's nothing in Ryanair's track record to date to suggest that they believe there's more to their business than price-cutting. So I do agree with you that Ryanair may one day need to rely on goodwill. But try telling that to Michael O'Leary!
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jm | Wed, 6 Jan 2010 2:30 pm
Ryanair have gone after the price alone model and as we know (just look at comparison websites) for big ticket items for a large segement of society, that's all that counts.
What irks people mostly with Ryanair is the manner upon which they portray themselves. Unapologetic to the core. It's no frills and it's exactly that.
Saying they don't embrace an online community doens't ring true. The online community is anyone who uses the net. Maybe you were meaning the segment of the community who (like myself on here) actively engage in debate and produce UGC?
It's probably a bitter pill to swallow but I would assume that a lot of people have hopped on the ol internet superhighway because of Ryanairs booking policy. Therefore one could argue that they are instigators of online adoption for a large segment of the European community who wanted to fly but previously were disenfranchised by high entry costs by local entrenched state run monopolies.
Ultimately, Ryanair know they can operate with impunity until there's a credible alternative who can pass on cost savings to consumers thereby compete on price and provide that bit extra on service. Is that possible? Then, and only then shall Ryanair invest in frills. For short haul flights, once you know the game with Ryanair, it's fine. It's a seat and it gets you from A to B.
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