News analysis

All grown up
Three years on, Ryanair's corporate makeover feels more like a natural evolution
than a marketing experiment. Martin Rivers reports on the airlines customercentric progression
Ryanair will trial hub-andspoke operations at Stansted
and Barcelona (photo: Boeing)

yanair is three years into its 'Always Getting

Better' programme a corporate makeover
designed to rehabilitate its toxic reputation for
customer service.
It was back in September 2013 that Chief Executive
Michael O'Leary finally acknowledged the need for change
at Europe's most uncompromising LCC. His commitment
to no longer trying to "unnecessarily piss people off" came
after Ryanair suffered its first profit warning in a decade,
prompting angry shareholders to revolt against the airline's
harsh treatment of its passengers.
"I have seen people crying at boarding gates," one
shareholder complained at the time. "There is simply
something wrong there that needs to be addressed."
However, the early stages of the makeover seemed
to resemble a superficial facelift rather than a
deep-rooted restructuring.
Unwilling to jeopardise any of the cost discipline that
secured Ryanair's market-leading position, O'Leary instead
pruned the "macho or abrupt culture" that deliberately
antagonised customers in the name of promoting
efficient behaviour. He described some of the airline's most
egregious conduct as reflecting "my own personal character
deformities", rather than a rational commercial policy.
Sky-high ancillary charges were quickly rolled back,
taking on the form of proportional revenue-generators,
rather than punitive fees aimed solely at discouraging
costly practices like checking in at the airport.

12 / Low Cost & Regional Airline Business

Baggage policies were re-written to permit a

second small cabin bag for free, while pre-boarding
measurements were relaxed and allocated seating
added to the sense of gentrification. Within days of
the volte-face, a survey by flight comparison website
Skyscanner found that two thirds of online shoppers
were now more likely to book with Ryanair.
That contrasted with the airline's ignominious title
as the UK's "worst brand for customer satisfaction"
bestowed by consumer group Which? shortly before the
branding makeover was announced.
The changes stepped up another gear in February
2014 when Kenny Jacobs was appointed as Ryanair's
first Chief Marketing Officer.
He quickly became the company's most prominent
spokesperson, replacing O'Leary's like-it-or-lump-it
attitude with the sanitised PR speak of a marketing
guru. Overturning his boss's mocking disdain for social
media, Jacobs spearheaded a digital revolution aimed
at improving the customer experience and softening
Ryanair's online persona.
The airline's website which had made customers
jump through hoops to avoid inadvertently purchasing
ancillaries was top of his target list. It was quickly
replaced with a slick, user-friendly platform more
befitting a 21st century travel company. A mobile
app was introduced and distribution channels were
broadened to include travel agencies.

www.lowcostandregional.com / July 2016

News analysis

TV adverts were also aired for the first time in 25 years,

as Ryanair tripled its 2014 marketing budget to
35 million ($48 million).
During the good old days, O'Leary had relied almost
entirely on profanity, customer goading and tonguein-cheek announcements to drum up media coverage.
"Marketing companies are rubbish," he told Marketing
magazine just one month before the airline's change of
heart. "Negative publicity sells more seats than positive
publicity The media picks up on it and then someone
writes a story on it."
No longer teasing the press about a fat tax and a toilet
charge, Ryanair began focusing on products that travellers
especially business travellers actually wanted to see.

Jacobs spearheaded a digital transformation at the airline

(photo: Ryanair)

A major concern in 2013 had been easyJet's

successful drive to attract corporates with a hybridised
product. O'Leary conceded that his rival had "wiped
the floor with us" when it came to accommodating
shorthaul business travellers, few of whom had the time
or inclination for Ryanair's shenanigans.
His response was to launch Business Plus, a premium
airfare offering added flexibility and comfort. Though
hardly a revolutionary concept, multi-tier pricing had
been anathema to Ryanair's old strategy of 'piling 'em
high and selling 'em cheap'.

Norwegian Air Shuttle's longhaul network is the

prime target for interlining, though O'Leary said LCCs
will "inevitably feed into the legacy carriers" as they
withdraw from shorthaul markets. Irish flag-carrier, Aer
Lingus, is already holding preliminary talks.
The newly gentrified Ryanair has even expanded
into private-jet charter flights, configuring a Boeing
737-700 to an all-business class layout, with 60 leather
seats and optional fine-dining.
Together with upcoming improvements to its
mainline aircraft interiors slimmer seats, more neutral
colours and purportedly extra legroom 2016 looks
set to be a transformative year.
The jury is still out when it comes to the wisdom of
Ryanair's corporate rebirth. A doubling of third quarter
profits in 2015/16 may have more to do with falling oil
prices than rising customer satisfaction, while concerns
about terrorism and over-capacity could still derail
this progress. If the market takes a turn for the worst,
O'Leary might be tempted to fall back into his old
penny-pinching ways.
More fundamentally, Ryanair's evolution into a
customer-centric airline comes as legacy carriers gradually
move in the opposite direction, stripping out perks in an
effort to boost their shorthaul competitiveness.
Some say that this blurred distinction between
low-cost and full-service carriers points to the industry
reaching a new level of maturity, converging on one
optimal shorthaul proposition. Others see it as a
dilution of the core principles that made both airline
types successful in their own right.
Whichever is more accurate, the growing sense
that the opening chapter of the LCC story where
passengers had to be weaned off the extravagance of
full-service flying is drawing to a close.
O'Leary may always be devilishly immature, but
Ryanair finally seems to have grown up.

The airline's makeover has

extended to new cabin crew
uniforms (photo: Ryanair)

LOW-COST BOUNDARIES
Having started with common-sense reforms during its
first two years, 'Always Getting Better' is now pushing the
boundaries of the low-cost business model.
Two policy changes that risk driving up cost and
complexity have gained traction in 2016. First, Ryanair will
trial hub-and-spoke operations at London Stansted and
Barcelona El Prat airports this summer. "The connecting
time at Stansted might be two hours and you won't
have to come through passport control," O'Leary told the
Irish Independent, while acknowledging that baggage
transfers pose a bit of a logistical headache.
Second, long-rumoured plans to synchronise
schedules with rival carriers are close to fruition.

July 2016 / www.lowcostandregional.com

Low Cost & Regional Airline Business / 13