Speaking on a conference call today (3 February), Ryanair boss Michael O’Leary said the airline has “won the argument” on pricing and will now look to promote other features including its improved customer service, punctuality and family-friendly tools. He adds that the firm is also considering TV advertising to support the launch of its new website, which is set to go live by the end of April.
“Historically we have gone out with cheap price adverts but we have won the argument on pricing. We are looking to do a TV ad to support the launch of the new website that will be more brand led,” he said.
Ryanair has launched a charm offensive in the past few months that has involved changes including cutting fees, introducing allocated seating and offering a grace period where people can make minor alterations to bookings. It has also upped its focus on marketing, hiring its first marketing director and running ads with the strapline “We’re changing”.
The moves come as Ryanair faces increased competition from rivals such as easyJet, which O’Leary admits has “done well” in the last few years. The airline posted a loss in its third quarter ending December, it’s first in the period since 2010, and is seeing its revenue growth slow as the price of flights drops.
O’Leary admits that the airline has been “slow to change” but says it now “gets the message” and is rapidly implementing improvements. He claims the airline has had “very positive feedback” from customers since Christmas and that he expects to see a meaningful impact on its financial results by the second quarter.
“This is not a warm cultural rebranding exercise, these are very real and meaningful changes that customers are seeing every time they book with us, fly with us and interact with the website. There has been ready acceptance of the message that we’re trying to change,” he says.
However, he dismisses suggestions that Ryanair needed fixing, citing the 81 million customers it carries every year and its “enormous” repeat business. Instead, he says, this is an opportunity for Ryanair to target the up to 20 million customers that are not price sensitive, such as business travellers, that have been put off by Ryanair’s poor reputation and “less than optimal” website.
“We’ve always been nice to people by not charging disproportionately high prices. But in our old model we’d have said ‘if you don’t like it bugger off’. Now instead we’ll offer them the chance to book seating, to be first off the plane, to get fast-tracked through security.
“Just like Ikea, Lidl and Aldi came in on the back of price but are now advertising quality, we’re doing the same thing. We want to people to like flying with us not just for the savings but also because they like us,” he says.
Ryanair plans to continue investing heavily in its IT platform and digital marketing to improve the website and make it easier to make bookings. O’Leary says the airline is already working on where to go next by looking at ecommerce leaders such as Amazon and Booking.com.
“This is the gateway to a period of strong growth for us over the next two to three years. Ryanair really is changing to welcome families and business people and if there is something else we’re not doing we’ll bend over double and do that as well,” he adds.