Saturday, 17 October 2009

A very clever business model


Last week's BBC Panorama was all about Ryanair and was attempting to portray them as the bad guys.
The list of complaints included:
  • printing out your own boarding pass (ie using your own computer and ink)
  • having to pay if you wanted to choose where to sit (priority booking)
  • paying to take a suitcase (ie checking it in)
  • being ripped off with expensive inflight sandwiches and drinks
  • not having a pouch on the back of the seat in front where you put magazines etc
  • having the safety instructions stuck to the back of the seat in front instead of a card tucked into the missing pouch
  • airports not actually being near the city they are going to (rather than Milan, it is Bergamo; rather than Glasgow, it is Prestwick, etc)
  • charging extortionate fees to pay for each ticket using a normal debit/credit card
Whilst I too often moan about Ryanair, it does what it says on the tin. It forces you to behave in a way that speeds up the whole operation and means that they can get their 29 minute turnaround and have more planes in the air per day, have the lowest fares and still make a profit.

And how do they do this? Firstly they:
  • get rid of check-in desks - always time wasting as people have lots of suitcases and passports to check in. Self check-in means you go straight through to departures with your 10kg handluggage. Now 10kg is quite a lot. Everyone always takes too much on holiday so Ryanair is just helping you be a bit more rigorous. Everyone who buys a ticket gets 10kg so for a family of 4 that is 40kg.
Secondly, and perhaps more importantly, they rely on human nature to get extra revenue and to speed up the boarding process. They rely on us being:

1. disorganised:
  • one mistake with names and dates on the booking and you have to pay a hefty fee to change the info.
  • forget to print the check in slip and you have to pay a hefty fee
  • not pack within their guidelines and you have to pay a hefty fee
  • forget to make, take, buy food and drink before you get on board and you pay a hefty premium
  • not be bothered to find out in advance how to get a visa electron care in advance (there are ways and means) and you pay a hefty premium..
2. selfish:
  • Not having seats allocated means there's a rush to get on board. You should see my 75-year-old mother-in-law. Rat out of a drainpipe springs to mind. Boarding is therefore swift.
3. Messy. So having no pouches on seats means there is nowhere to leave your used hankies, empty tins, newspaper. It cuts down on the cleaning up during the 29 minute turnaround. And there is no faffing about trying to restore the safety instructions to the pouch if they are stuck on the back of the seat.

As for the complaint about the airports being far away from the city. The Ryanair airports often have a special deal to get you to the city. Prestwick to Glasgow on the trains (showing a Ryanair boarding pass) is something like £2.50. And not everyone is destined for the city. The airport may be nearer their actual destination.

And there are ways of avoiding the debit/credit card fee. I think getting a post office travel money card pre-loaded with sterling or euros could be one of them. Check it out.

So whilst Ryanair can be annoying, it is very good at delivering its promise (cheap flights). Make sure you don't fall into any of the above traps, get a visa electron, don't get hungry on the flight and you can get yourself a bargain.

Oh, and Michael O'Leary has a villa in Loveno (the village where my mother was born), so he can't be all bad.

1 comment:

Harry Campbell said...

Not sure about "what it says on the tin". Their dishonest advertising is infamous, and they've been rapped over the knuckles for it in court: flights advertised at 5p that actually turn out to cost £45 when you add in all the hidden extras, that kind of thing.

However, it's fair enough that you should get what you pay for on a no-frills service. Perhaps the real bad guys are the full-price ("yes-frills"?) airlines who I get the impression have been taking advantage of people's familiarity with the no-frills ethos to quietly do away with all the nice little freebies that used to come as standard, while still charging a "frills" price.