If the Customer Experience is so important, how do you explain the success of Ryanair?

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I’ve been hearing about Ryanair for the past few years. Mostly horror stories about bad service and how the airline would never make it.

So imagine my surprise when I read that Ryanair remains Europe’s No1 customer service airline because, during January 2012:

* 91% of Ryanair’s over 33,000 flights arrived on time, up 1% on January 2011.
* Less than 1 complaint per 1,000 passengers was received.
* Less than 1 mislaid bag claim per 2,000 passengers was received.

A Ryanair executive claims that once passengers “have switched to Ryanair’s prices these passengers keep coming back for our unbeatable on- time flights, fewest lost bags and great customer service.”

Doing some quick online research, I found a lot of pros and cons about Ryanair. Some customers like the service (and love the low low prices) others really hate the service and complain about rude employees, dirty cabins and the like.

I don’t know how Ryanair can claim great “great customer service” unless they define it as “we get you to your destination at a low price, and that’s it.”

But Ryanair seems to be doing quite well, financially. Especially considering the weak economy and ongoing struggles of the airline industry to make money. According to Ryanair’s 2011 annual report, the airline is growing in passengers, revenue and profits. Controversial CEO Michael O’Leary sums up:

Our 2011 net profit after tax of €401m ($565m) makes Ryanair the world’s most profitable low fares airline as highlighted by Air Transport World in July 2011.

Note: Southwest and JetBlue were the #2 and #9 on this list.

So my question is simply this: If the customer experience is so important to growth/profits, how is it that Ryanair has been so successful?

Further reading/quotes:

  • 97% of Scots Will Fly Ryanair Again
    “Ryanair will continue to deliver the lowest fares on Europe’s largest flight network, with a commitment to continuing to deliver the best customer service which has resulted in 97% of passengers confirming they will fly with Ryanair again.”

  • Ryanair – When Customer Service Goes Down The Toilet
    “Ryanair’s latest wheeze to charge for their inflight toilets is the latest in an unofficial socio-economic experiment being run by the company. To what level can they continue to strip customer service out of the system before people will stop buying their cheap tickets? Just how badly do customers want to get to destinations for next to nothing?”

  • How Ryanair succeeds with poor customer service
    “What happens when a company is known for poor and sometimes rude customer service, misleading advertising, and an exclusive focus on profit margins? If it’s Ryanair, a low-cost European airline, it does very well.”

  • Ryanair – a branded customer experience?
    “The online travel guide TripAdvisor recently polled 4000 of its members and the Irish discount carrier was singled out as the one that members liked the least. Probably most of us have experienced or know someone who has experienced, the cattle truck experience that is typical of Ryanair. But does that matter?”

14 COMMENTS

  1. The is a perfect illustration of a business understanding what’s important to the customer.
    Ryanair knows that it’s service can be left wanting in certain areas but in terms of what’s important to the customer a bevy of smiling cabin attendants isn’t high on the list. A reliable and cost effective service has a much higher weighting than free newspapers, and onboard entertainment. They currently have the balance right and are attracting a good quantity of loyal, like-minded customers who have those same requirements from their airline.
    In this climate, I can only see them going from strength to strength.

  2. Thanks Bob a very interesting and thought provoking article.

    The reason that Ryanair continually ‘please’ their customers is it has low customer expectations. Every time I board a Ryanair flight I don’t care about the service or any lavish extras, that isn’t the reason I booked – all I care about is the cheap price I have paid and arriving at my destination… end of. Therefore when I arrive at my destination and have more money to spend as a result of the cheap flight, I’m happy.

    It surprises me when companies fail to understand why their customers aren’t happy when they have customer expectations that don’t align correctly to what their customers want or what they can offer.

    Get you customer expectations right and your customers will leave satisfied.

  3. I think this can probably be fodder for the discussion of meeting and exceeding expectations.

    Customer Experience is not all about sex appeal and customer service. Its about delivering on the promise of your brand. If Ryanair is all about low cost travel that is gets you there on time without losing your bags, then folks are buying into that (as Rachel says above).

    One of my favorite restaurants for lunch when I first got out of college was The Vienna Inn, in Vienna, VA. The place served chili dogs and beer (back when a drink or two at lunch was the norm). It was crowded, somewhat dirty, and the waitresses, and owners, constantly yelled at customers who were in the way, slow to order, or who had questions.

    But, with the food not being special, that was the reason you went.

    Figure out what makes you special, what makes you matter, and what you are going to do better than anyone else, and you have a receipt for a positive customer experience.

    Hank
    @HBonCX

  4. I’ve never flown RyanAir before, but I have a pretty good guess as to their customer service success. If you’ve ever heard their CEO speak, you know exactly what you’re money is getting you when you fly the airline. There are no “hidden” costs. Everything is upfront. If you want to check a bag, you pay a fee. If you want a good seat, you pay a fee. There’s something to be said for knowing exactly where your money is going.

    I’ve flown on average ~100K/miles a year for the past 12 yrs or so. I’d still be hard pressed to tell you what the fee structure is for some of the large airlines. Given my status, it still frustrates me to come across the occasional fee for even the silliest things. Were I a leisure traveler, I’d be terribly frustrated with the fee policies of many airlines – maybe not so much with RyanAir.

    People can complain all day long about RyanAir, but if you don’t like what you’re being charged, then don’t accept that particular service.

    …and if you’re getting a smile and a thank-you with that fee, then so much the better.

  5. Ryanair doesn’t have a complaint site on the net, to complaint about their disrespectful and discriminating service you have to be at the airport during the working hours; they might arrive in time, but they have no boarding time on the screen only 10-20 min after the official boarding time, so you can’t enjoy shopping or having a drink in the airport because you never know how far is the gate you have to run too; always their flights are taking off late, I always waited 1:40 min hrs on the plane, and the petrol/cherosene smell from the engines made me sick, but there is no sick bag on the plane; so I got sick 3 times before taking off with them, and only with them; if you Speak polish you are allowed to get as many bags as you want on the plane, if you don’t speak polish you should put a book in your caring bag, not even a book out of the bag; to complain … To who, there is not such thing in their company, their site;
    Me and most of my friends, colleagues pay more for any other company but we are treated decent and respectful; by the way, if you have a worst enemy, by him/ her a Ryanair flight !

  6. I found a post here that says a survey of over 8K people gave Ryanair a customer satisfaction rating of 38% (2nd worst).

    What’s surprising is that the online panel respondents gave Ryanair only “two stars out of five for value for money.” I thought this was the main appeal of Ryanair.

    All this goes to show that if you have a unique market position you don’t have to worry about customer happiness, you can still grow and make money.

    But if a Southwest-style airline were to offer Ryanair some real competition on price, and also friendly service, the customers that Ryanair thinks are loyal will defect.

    For more coverage of Ryanair read this article, Ryanair profits soar, but are you on board?. The author, commenting on Ryanair’s financial success: “So I'm sceptical that today's results are due to droves of UK travellers switching to Ryanair as they tighten their belts in recession. Perhaps it's more to do with the airline's huge expansion elsewhere in Europe, and the captive audience it has on routes where there's no competition?”

  7. It seems that EasyJet may be the best overall competitor to Ryanair.

    According to a January 2012 article on short-haul airlines published by http://www.which.co.uk:

    One in five members who flew short haul on their last flight travelled with EasyJet (22%), nearly double the number that flew with BA (13%), Ryanair or Thomson Airways (both 11%). The orange power brand has expanded hugely since the late 1990s and now flies to 130 airports in 30 countries. The airline sits decidedly mid table with a customer score of 53%, but receives four stars for its check-in process, cabin crew and the special assistance it provides to those requiring it.

    Ryanair, on the other hand, got “4 stars” for “cost” but only 2 stars for “value for money.” The article says passengers “have perhaps realised the hard way that cheaper doesn't necessarily mean better.” Ryanair’s overall rating was 2nd worst at 38, vs. industry average 51.

    And EasyJet’s financial performance looks good, so it’s not as though it’s suffering by treating customers a bit better than Ryanair.

    BTW, top scoring Swiss International Air Lines also received 4 stars for “value” along with a overall score of 76, far above the industry average.

    So, once again, how is Ryanair able to grow fast and post good financials? Why don’t people fly EasyJet instead?

  8. I organise myself to fly with member of my family for the first time with Ryanair but I did not make it. Something went wrong. I just did not receive the proper information in time, there was none in Ryanair staff with the desire to help me efficiently. It was a lesson for me as before that day, I never missed a plane in 30 years ! Searching on the web, I notice that many people had the same bad experience than me.

    Your question is why is Ryanair making profit and having more and more passengers every year since they have such a bad reputation as many people had a bad experience when in contact with the company. I am puzzled too.

    From this bad experience, my analyse is the following :

    First, when you are not fully aware of all the ” Ryanair specific travel rules”, you ended up by being charged more by Ryanair than by any regular airlines. Moreover, many new comers simply loose completely their money and don’t fly. And…they just feel stupid not to have read all the rules and done things in time ! In fact, there is no incentive for Ryanair to have everybody on board: priority is to fly on time.

    Second, when you know the rules, you pay in fact the normal the price but you are doing yourself part of the job or pay for extra. This means, nowadays, than more and more people prefer to do the job themselves and pay less.

    Third, Ryanair does not care about “image” only about the low cost, cash and avoid refunding, of course also about transporting the travellers in time . So if passengers are not happy, loose the flight, who cares ? The money is in, there is less traveller in the plane to take care of and refunding is very rare ! Statistics for newspaper are goods, profit for shareholders also.

    Four, only in special cases (clear discrimination against E.U rules) the passengers are able to organise themselves to win in the court against the big Ryanair machinery . It seems that the consumers are not yet well-organised enough to protest against every unfair treatment from Ryanair. There are many special cases due to non-professional attitude but how to provide evidence and set rules for those changing case…and have better opportunity to refunded and a better treatment ?

    It seems that many people accepted not to be well treated as long as the price is low… “Problems, disagreements only happen to others, we are smart enough” !

    As for the low level of claims, when you do not have any chance to win anything you just do not claim anything ! The statistics for Ryanair can be good this way

    Let us hope that :
    – airlines treating better their customers will grow and be good competitors on the long run,
    – large consumers protest will end up in the passing of rules providing better consumers protection against unfair ticks to get money without proper service.

    When I say tricks, I mean the “rules in the travel contract” and attitude leading to ” insufficient information provided in due time to travellers”.

  9. I”ve the same experience as you. I”ve been refused boarding because Non UK passport holder have to register at airline desk even the travel agent already issued u a boarding pass! I”ve missed the flight in my live but I can”t board even I”m at the waiting room watching all the passegers to board, Their staff very unhelpfull, they wanted me to run out to register & they know I”m could”t make it on time! It ruined my holiday to Marrakesh! I”m sweared will never travel by Ryanair !I”m have total loss the package!

    I”m never expect passeger will boarding pass refused to board! In my lifetime it only happen in Ryanair!

    After this incident,I”m feel very depress, Is because I”m hardly get day off & I”ve applied Morroco VISA,is costly in money & time! Those Muslim country embassy just like Ryanair!

  10. I think I am more aligned to the typical Ryanair customer.
    I have bought close to 100 tickets with Ryanair in the last 8 years.
    I care about the cost only.
    It’s a 2 hours trip pretty much everywhere in Europe, less than going by train to the next town.
    I don’t care at all about anything else apart security and safety.
    Trains toilets are more miserable, hostesses on trains are not present, no newspapers, no food, no drink, no help, no smiles, trains dont wait for you, they can be as late as Ryanair, they can be suppressed as well.

    I compare Ryanair with trains, not with other carriers. Ryanair is cheaper, quicker and better than Trains, for same distance. Other national carriers (the one you compare Ryanair to) are not cheaper than Trains. And Trains here in UK are deadly expensive.

    Only things I care are price and security (I hope regulations and controls won’t allow any carrier to compromise this), as multiplying by 100 even just 50 pounds more per trip would make a sensible difference for my pockets.
    But with normal carriers you are looking something closer to 150£ more, not just 50£.
    Does this delta justify the difference? In my opinion it does not.

  11. Jon Picoult just posted A Revelation From Ryanair: Service Might Actually Matter. He notes that shareholders are becoming restless as growth slows:

    A few weeks ago, Ryanair shocked the stock market with a profit warning (the first in a decade), as flight bookings have fallen appreciably. And at the firm’s latest annual meeting, several shareholders went public with their concerns that the company’s abysmal customer service is hampering growth.

    Now the bombastic CEO Michael O’Leary, who in the past has taken delight in telling complaining customers to bugger off, is taking a more conciliatory tone. Or is he?

    If you search on “ryanair growth slowdown” you’ll find several stories over the past 10+ years where O’Leary warns of slowing growth, including this one by The Telegraph. Is it the beginning of the end, or just the CEO cleverly managing expectations for growth in the same way he has managed (lowered) expectations for customer service?

    That said, maybe reports of passengers crying at airport gates is finally getting through to O’Leary, who said “I am very happy to take the blame or responsibility if we have a macho or abrupt culture. Some of that may well be my own personal character deformities.”

    And yet, he also plans no signification management changes, and presumably no changes to his own macho personality which drives the company.

    I think it will take the next year to really see if
    1. the bloom is off the Ryanair growth rose
    2. the culture can change to be more customer friendly

    Personally, I think there is plenty of life left in Ryanair’s low-cost / low-service strategy. And until a viable low-cost / better service competitor arrives, customer service won’t improve much at all. Will be fun to watch!

  12. I Googled “file a complaint against RyanAir” and was directed here:

    http://www.ryanair.com/en/questions/how-do-i-make-a-complaint

    Sounds like the right page, right? Oh, except it’s about TRAVEL INSURANCE. Maybe RyanAir doesn’t get many complaints because they don’t have a page to FILE them. If you can find them, let me know. I have a bit of a problem being charged four bucks for water on a flight that’s leaving around the time it’s supposed to have arrived.

  13. Ryanair does have offer a way to send a complaint.

    On the Contact Us page, under “Compliments or General Complaints” you’ll find this:

    Please send by post to the following address:

    Customer Service Department
    PO Box 11451
    Swords
    Co Dublin
    Ireland

    Hey, Ryanair, the 1960s called and they want their customer service channel back.

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