Ryanair’s sky-high profit jump is thanks to its customer service turnaround

Ryanair managed to attract nearly three times the predicted number of additional passengers, with numbers rising 11 per cent to 90.6m – in contrast to the prediction of 4 per cent.

Its net profit for the year ending 31 March increased 66 per cent to £867m. Pretax profit also increased 66 per cent to €982m.

The results reflect the significance of Ryanair’s “Always Getting Better” strategy, which had focused on a more targeted approach to addressing areas where customers thought the Irish airline was lacking.

Kenny Jacobs, Ryanair’s CMO, had previously pointed to numerous aspects of its programme which were big hits with passengers – “the introduction of allocated seating, a free second carry-on bag, reduced fees, a new website, a brand new app with mobile boarding passes, and our dedicated family service, Ryanair Family Extra,” he listed.

In the summer of 2014, Ryanair also announced its Business Plus package as part of the scheme, to provide tailored travel benefits. It cited flexibility on ticket changes, 20kg checked-in bag allowance as well as priority boarding and premium seats among the benefits. Jacobs added: “We now offer even more business routes, connecting Europe’s major cities with additional flights and improved schedules, ensuring great savings for businesses of all sizes.”

The focused approach to delivering good customer service has been paying off – and what’s particularly remarkable about the progress is how uncomplicated it appears to be. Ryanair’s CEO Michael O’Leary had summed up the strategy as essentially “being nice”, a seemingly simplistic perspective, but undoubtedly an effective one.

The Irish chief executive admitted the airline’s image was in an unacceptable place in 2013, as consumer magazine Which? ranked it in first place for worst customer service among Britain’s biggest brands. It was criticised for a “macho” culture – O’Leary had previously hosted press conferences in bed with models, as well as encouraging crew to strip for the Ryanair calendar.

Image: Shutterstock

He said he was “very happy to take the blame of responsibility if we have a macho or abrupt culture”. O’Leary added: “Some of that may well be my own personal character deformities.” He declared that Ryanair needed to stop “unnecessarily p*****g people off”, and needed to keep up with customer expectations, as some turned towards its rival easyJet.

Insight provided from shareholders included tales of family members refusing to fly Ryanair and criticism at dinner parties for involvement with the Irish-based airline. One was notably frank in their portrayal of the business: “I have seen people crying at boarding gates. There is simply something wrong there that needs to be addressed.”

While O’Leary once dismissed Twitter, the airline now has an account – which appears to have cracked the tricky balance of being both humorous and useful. The employees manning the account were mostly recently embroiled in a back-and-forth with the mayor of Copenhagen, who ordered all city staff not to fly with the airline – even if it offered the cheapest fares.

Ryanair responded with a mock-up picture of Frank Jensen as Marie Antoinette and responded to allegations of treating staff poorly with information on how much its staff was paid. It followed up with a message thanking Jensen for boosting a record number of bookings in Denmark.

Customer service is arguably an increasingly difficult area to keep a handle on – particularly as social media can be a curse here. There’s no room for scraping something under the carpet if it has been poorly dealt with – once something goes viral on Twitter, it soon gets scrutinised and picked up by the press too.

Another airline that felt the full force of social media recently was easyJet. Comedian Alistair Barrie was quick to criticise the company on Twitter when he had to change his flight due to his wife’s breast cancer. The following message soon gained traction on the site, and easyJet responded online.

After the airline’s initial claim that the matter had been resolved over direct messages, Barrie soon disputed that – while also voicing his dismay at being sent a customer satisfaction questionnaire afterwards. By the time the flight change fees had been waived, the damage was already done.

Over the past year, Ryanair has realised that while it trumped competitors on the price front, the value of feeling well-treated and listened to, is one that can’t be bought for many customers. O’Leary has admitted that passengers trying the airline out for the first time “like the new policies, they like the friendly, smiley cabin crew and the feedback has been positive”. 

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Complaints had dropped 40 per cent to 80,000 letters a year in 2014 and O’Leary said the combination of its lowest fare model with the “Always Getting Better” programme has “attracted millions of new customers to Ryanair”.

While bigger businesses can feel the heat of social media more extremely than smaller ones, a particularly positive customer experience story can be something that quickly gains attention, whoever is involved. Ryanair’s changes haven’t been complicated – nor are they impossible to replicate. For companies looking to what small tweaks can have big rewards, it’s a reminder to look no further than customer service as a useful starting point.

Image: Shutterstock

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