First-class customer service lifts Ryanair’s profit

Ryanair chief executive Michael O'Leary. Photo: Bloomberg

Ryanair chief executive Michael O'Leary. Photo: Bloomberg

Published May 27, 2015

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Kari Lundgren London

FOR the first 20 years of his career in the airline business, Ryanair chief executive Michael O’Leary liked to think that he was always right and his customers always wrong.

Now with a 66 percent jump in full-year profit, 9 million additional passengers, and the outlook for the next 12 months looking similarly rosy, European aviation’s enfant is singing a different tune.

“If I’d only known that being nice to customers was going to be so good for my business I would have done it years ago,” the Irish executive said.

With an eye on the successful marketing strategy of discount retailers like Aldi or Ikea, Ryanair has pursued a full-fledged image revamp. Out with irritants ranging from excessive baggage charges to its ebullient on-time arrival trumpet. In with business-friendly perks like reserved seating and serving primary airports instead of dusty airstrips in the countryside.

The aim is to turn a brand once known for being “cheap and nasty” into one offering good value, O’Leary has said.

Gone are the days when offering the lowest fare alone pulled in the public. With full-service carriers like Lufthansa or Air France rolling out their own versions of no-frills airlines, competition in the sky for cheap tickets has heated up.

The good news for Ryanair shareholders is that cuddling puppies and eating one’s words appears to be good for business. Ryanair shares have risen 85 percent since the beginning of last year when it started introducing changes, and profits are at an all-time high. – Bloomberg

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