RyanAir CEO Michael O’Leary made headlines this week when he argued that a customer in Spain deserved to pay $380 for having RyanAir print a boarding pass. He went even further when he said that “all passengers are stupid who think we will change our policies or our fees”. I’ve been thinking about this statement all morning and I can’t shake the bad taste it’s left in my mouth. Having lived in Europe for five years and being a patron of RyanAir, I can see why my impression of the airline was dead on and here are the lessons that I took from O’Leary’s statement.
Just because you can doesn’t mean you should
I understand O’Leary’s logic of charging for convenience, that’s what most customers want. My issue comes with how much he charges for the convenience. Some will argue that if the convenience is worth it the customer they will pay it, but on an airline if you don’t have the boarding pass you can’t get on the flight. So the charge is really a hostile convenience charge.
Flexibility is a sign of business acumen
The rigid adherence to airline’s policies screams to me a lack of strategy by O’Leary and his management team. In an industry that is struggling to make revenue on its core service, the jump to ancillary charges should shine a spotlight on the airline’s inability to generate revenue on its core service. Now some may say that the move to monetize ancillary services is an adaption strategy, but RyanAir has shown that ancillary charges are really its only business model.
You walk a fine line between reputation and revenue
Sure RyanAir rose to fame being a no-frills airline, but at what point do you stop being no-frills and start being a rock in your drowning customer’s pocket? Call me naïve, but I actually like the fact that my clients view me as a resource not just an expense. Isn’t that what you are supposed to strive for in business? Shouldn’t the ultimate goal be fulfilling a need, not creating another revenue stream for your competitors?
Business can be a ruthless path, with customers often left to fend for themselves but the one thing that I love about being a small business is that I can bend the rules for clients who really deserve it. There are things that I can’t touch, but with office policies and pricing policies you have to really think which one is more important, this sale or my future sales?