Ryanair is infamous for its poor customer support, but with autumn passenger numbers falling and the airline issuing its first profit warning for 10 years, it’s now seeking to dispose of its image because the nasty airline.
Ryanair achieved rapid growth by providing cheap flights with zero frills to a big range of short-haul destinations. While that wbecause the case it almost revelled in its position as the most hated airline, with CEO Michael O’Leary offering withering putdowns to anyone who dared complain.
He has memorably labelled customers “idiots”, called people who forget to print their boarding pass “stupid” and told anyone in search of a reimbursement to “**** off”. Yet now he has performed a u-turn, embarking on a charm offensive geared toward improving negative perceptions and addressing its reputation for poor customer support.
Simon Carter, previously executive marketing director at Thomas Cook UK and Ireland and now marketing director at Fujitsu, says: “Ryanair has always been the enigma in the case of customer support. Despite the logo being the underside of most customer satisfaction tables and being the primary name that the majority people cite when talking about brands they like to hate, O’Leary has grown his business.
“It is therefore interesting that Ryanair has finally concluded that the textbooks were right, that buyers do have a decision and that customer respect is important.”
What changed?
Ryanair have been hit by attempts by low-cost rivals, including EasyJet and Monarch, to enhance service. Increased competition and weakening demand for air travel also caused Ryanair to chop its fares this year, entering a worth war with its rivals. That’s impacting on margins, with Ryanair issuing a profit warning for the fist time in 10 years.
Douglas McNeill, investment director at Charles Stanley Direct, says: “Ryanair has seen some decrease in financial returns. The onus is on it to answer that.”
That has ended in a raft of improvements, including cutting airport fees, offering a “grace” period on bookings and easing bag curbs. It is usually overhauling its digital strategy, investing more in mobile and social media, and hiring its first marketing director.
These are usually not just cosmetic changes. Ancillary revenues from baggage fees and boarding pass re-issue penalties are huge for Ryanair and these changes will affect its base line.
Philip Price, formerly marketing director at P&O Cruises and now consultant and client services director at Leepeckgoup, says: “These changes will directly reduce revenues by millions. But O’Leary has not suddenly had a road to Damascus revelation, he has realised that buyers are worth keeping and that it’s far rather more effective to take a position in CRM, in both its operational and marketing senses, than to move find new customers.”
The Ryanair Brand
Ryanair languishes on the bottom of just about every metric on YouGov’s BrandIndex, from reputation to satisfaction, through to impression and quality.
Since September 19, the day before its first announcement in regards to the measures it’s taking to enhance service, its Reputation rating has increased from -53.1 to -52.7 on 31 October. Impression of the emblem improved from -51.6 to -50.3 and Quality is up by 2.6 points to -50.3.
However, it’s still miles behind its rivals. The subsequent worst performing airline for Reputation and Quality is EasyJet on -17.2 and -14.7 respectively, while Turkish Airlines is available in second bottom for Impression with a score of 0.3.
There are signs that consumers are paying attention to its attempts to enhance perceptions. Buzz, a measure of whether people have heard positive or negative statements a few brand, is up from -29.8 to -23.2, a statistically significant improvement.
Meanwhile Ryanair’s Index score – BrandIndex’s average of all perception measures including impression, quality, value, reputation, satisfaction and recommendation – rose from -41 to -36.9.
McNeill says despite Ryanair’s poor reputation, it’s still an incredibly strong company and an incredibly profitable business. Plus it has enough expertise and savvy to perform what it has got down to do.
It may take a little time, with the type of cultural changes had to buy into this shift in any respect levels of the organisation unattainable in brief order. There must be changes in how staff are trained and the way they reply to customer.
While customer support remains a chink in its armour and not to make improvements quickly could impact the airline financially. Having announced its intentions, it must now make certain it delivers.