Flying for profit – does customer service really count?

Written by Chirag Shah on 23 September 2013

When one thinks of Ryanair, attention to customer service and a pleasant flight experience are not the first things that come to mind.  Instead, we are more likely to hear stories such as the one that broke last week of a Ryanair customer charged 188 Euros to change his flight after his family had died in a fire.  Michael O’Leary, chief executive of Ryanair, once famously remarked, “People say the customer is always right, but you know what – they’re not.” This is the image most people have of the airline, that price is prioritised over the customer.  Therefore, it comes as a surprise that at its AGM, Ryanair has promised to transform its “abrupt culture” in a bid to win customers from costlier rivals, admitting for the first time that a reputation for treating its passengers badly might have become a problem.  So why the sudden change in approach? 

At the start of September, Europe’s biggest budget airline warned that profits for the year may miss forecasts or be at the lower end of its range of 570m Euros to 600m Euros. However, this apparent friendlier attitude also coincided with a survey this week from Which? Magazine showing that Ryanair had been voted rock bottom of the 100 biggest brands serving the British market.  The magazine asked consumers to rate each company according to its staff’s knowledge, attitude and ability to deal with issues. Ryanair scored two stars out of a possible five for each category, producing an overall rating of 54 per cent, comfortably the lowest of all 100 firms. Initially, Ryanair responded in typically belligerent fashion claiming that of the three million passengers they surveyed on their website, only two of them had ever heard of Which? and none of them had ever bought or read it because they were too busy booking Ryanair’s low fare, on-time flights to waste time filling in Which? magazine’s tiny surveys.

However, Ryanair have realised that rivals such as Easyjet are basing their entire public relations strategy around the fact that their customer service is better than Ryanair's and so need to respond.  In Michael O’Leary’s words, Ryanair should “try to eliminate things that unnecessarily annoy customers”. The airline has said it will stop fining passengers whose carry-on bag exceeds the minimum size by millimetres, overhaul its website and set up a team to respond to customer’s emails.  The airline’s relentless cost-cutting has propelled it to becoming Europe’s biggest, flying 80 million passengers a year and in the past it has scoffed at complaints about its service, citing statistics about revenue growth and on-time departures.  The latest developments however, indicate it is finally listening to shareholders who have complained that the company’s reputation for poor customer service is limiting its room for growth.    

So does this prove that the customer is always king and you can only get away with insulting your passengers for so long? More realistically, with the company’s share price down 4pc this month and passenger numbers down for the autumn, the company needs to be seen to be steering a different course.  It could be that, with the economy on an upward trajectory and a bit more money in people’s pockets, passengers are prepared to spend a little more for a higher standard of customer service.  So will we see a new and improved customer friendly Ryanair? Don’t count on it! 


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Chirag Shah
Chartered Accountant