Another cracking post from Comotion Associate Ian Golding – the RyanAir and Customer Experience debate is one I’m all too familiar with and use in many of my conference speeches. During these talks and the questions that inevitably follow we debate whether RyanAir are any good at Customer Experience, invariably the audience are split 60% saying No and they, like Ian would never fly with them. 40% say yes – because, as Ian says, they do exactly what they promise – they consistently meet expectations (that have been set very low).
So clearly RyanAir are competing mostly on Price and to some degree destination. RyanAir would argue that there is a big enough demand for this combination of Service and Price. So, my final question to the audience (and to you today) is always
Would I invest in RyanAir?
to which I would have to answer a resounding no.
Their business model is not sustainable
- A great majority of their revenue is dependent on airport/government based subsidies for bringing volumes of passengers through airports. This is under regulatory review and extremely volatile income. The plane rides themselves are not proftiable.
- It is too easy to replicate and better their service offer
It is so important to understand the business model behind a company because there must be a sustainable strategy in order to continue to exist. You need permission from customers to make profits and ultimately RyanAir bribes passengers to fly on their buses so they can make money out of the towns they fly to – If RyanAir could fly cattle on their planes instead – they would their business model does not care at all about the passengers except for the revenue they make elsewhere from them.
If another low-cost airline can exceed those same expectations customers will leave in droves. Because this is a business that only knows how to ‘meet’ expectations it will not be able to respond to that competition. But most importantly – even if it tried – because this is a business that does not appear to care about it’s employees and customers – who would care if they did try?