Wednesday 5 September 2012

RyanAir,- Brand consistency, but............


Never one to mince his words or indulge in cuddling the customers, Ryanair's boss Michael O'Leary has been at it again.

Faced with a customer complaint that their family, having left home without printing their boarding passes, had to pay what in reality was a 300 Euro fine to get them at the airport. Tough luck is O'Leary's theme, most know and follow the rules and those who don't just forget can "b----r off". All very clear and no chance of  cuddly loyalty inducing "Never mind, we quite understand,- here's your money back". Ryan clearly isn't interested in what it sees sentimentality and ongoing relationships. Its message is simple :You pay your money, you have your flight and that's it. Next time is another day which may never happen and only price and maybe a bit of convenience will govern your choice. Liking us won't. We don't want a cosy relationship.

That's one way of looking at it, but it isn't the only way and others will disgree with the verdict. Airlines operate on small margins . They also rely on repeated high load factors to keep them in business. Most brands in any industry would take the view that even if they don't particularly want to be loved, it's best not to be actually disliked or,worse, hated. You may be doing well but each notch on the progression towards absolute unpopularity and brand toxicity builds up a percentage of the market who will try to avoid you. Ultimately that reaches a percentage who dislike the brand so much that they will not buy it at any (low) price. The laws of physics dictate that any object moving forward needs to maximise its performance and minimise its costs by avoiding unnecessary bow wave or drag. Ryan seems to be denying this basic rule. Bold, yes, but wise?

At the moment the low fare airlines are doing well .Some of their success though is built on a misconception that they are always much cheaper than the legacy carriers. In fact that is far from universally true. Scrutiny of competing fares in Europe will often show that that the gap between the likes of Ryan and easyJet and BA, KLM, Lufthansa and others is often narrow. Sometimes it is nonexistent after . The costs of early departures,late arrivals and other inconveniences. There can be overnight accomodation near the airport or expensive taxis because public transport is asleep. To see it all set to music just Google "Cheap Flights" by Fascinating Aida. Even if after all those expenses theer is still a gap there is also the last fiver or tenner to be saved through BA's tea, coffee, drinks and rolls or nuts being free . When the chips are really down and maybe a bit of convenience and Terminal 5 at Heathrow are added in, the contest is even closer or a dead heat or even a win for the old familiars. Then  it's down to who you like , or don't like.

So far Ryan has done well without an emotionally committed following . Nobody knows how much better it could have done if it had one. What happens next if the recessionary tide really goes out in the face of Eurowoes, people's lack of spare cash or whatever other financial mishaps crop up? Might the company not then wish it had those few extra percentage points of load factor who felt warm towards it and stuck with it though thick and thin ? As it is,  the brand's unloved customers  might shrug and say "You've had your money, we've had our flight . Next time is another day and we owe you nothing."

Footnote: EasyJet is very deliberately increasingly treading a different path. Its latest move, already trialled, is to roll out fully allocated seating from November . Thereby it eliminates one of the worst perceived  features of low cost travel ,the dreaded departure gate scrum and trampling of the less swift and robust. They are to be congratulated. The legacies will be saying "ouch!" though. The game never stops. Deniers beware.

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