SimpliFlying » Michael O’Leary

The Southwest Effect in Ireland? Does the RyanAir brand come close?

Shashank Nigam — Thu, 11 Jun 2009 07:19:13 +0000

This is a guest post by Rob Mark from Jetwhine.com in Chicago. We’ve decided to begin a little cross-posting here at SimpliFlying and at Jetwhine.

A commercial pilot and journalist, Rob has been writing Jetwhine as the blog of “aviation buzz and bold opinion,” for two and a half years. His posts are never dull because you never need to try to figure out where he and his co-writer Scott Spangler stand on an issue. Enjoy.

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For as long as I can remember, Southwest Airlines, now the largest U.S. domestic airline, created in the 1970s by Herb Kelleher and Rollin King, has been the low-cost airline others most want to emulate. The need to copy isn’t just about money, although Southwest has a profit history better than any other airline in the world. Most Southwest look-a-likes have, in fact, been dismal failures.

Southwest has a record of solid labor relations – despite last week’s pilot contract rejection – and a culture of customer fun in an industry that most others have never been able to duplicate. Southwest simply delivers a solid, consistent service at a fair price that keeps passengers coming back. To me, an airline that actually still responds in writing to a customer complaint says quite a bit.

The airline’s no hidden fees policy has also carried it quite a long way at a time when competitors have tried charging for everything short of breathing space. True, Southwest did appear to break with tradition last week when it announced some new fees, but charging for the work related to managing unaccompanied minors as well as pets carried in the cabin is something the average man or woman on the street will most likely never notice.

On to Ireland

When Ryanair opened for business in 1985, many analysts thought the Dublin-based carrier could evolve into a European airline modeled on the success of Southwest. Having had the opportunity to fly Ryanair a few times, I can tell you that the Southwest folks probably have very little to worry about on that front, something my first flight on the European airline confirmed. At Southwest, boarding is by group to bring some sort of order to the process of putting folks in their seats. In fact, we spoke to Southwest’s Doug Lawson about just that topic last year.

When boarding at Ryanair, they essentially open the terminal doors, aim passengers at the airplane and yell “go.” It’s every man, woman and child for themselves to find a good seat using both the front and rear doors. There was nothing even remotely funny about watching people run like crazed dogs for the Boeing while I tried to make sure they didn’t mow down my family in the process. To me, Ryanair’s business model is not so much about low cost as it is about being cheap. Even ads for the airline tout “cheap.” And when a company is cheap, consumers should beware.

In March, Ryanair CEO Michael O’Leary made news by suggesting pay toilets might be a good idea aboard his airplanes where flights are often no more than an hour per leg. In the U.S., we laughed, especially when O’Leary’s press officer confirmed that the CEO often makes this stuff up as he goes. Then last week O’Leary confirmed he’s in talks with Boeing to find a workable pay toilet solution, one that will help Ryanair remove two of the three lavs on the Boeing 737 to make room for more seats.

Making passengers pay to use a toilet is sure to become one of the largest revenue losers in the history of the airline business. But it also opens the door to a discussion about how Ryanair is fast become an airline at which the wheels have finally begun to come off the wagon. The company has clearly crossed the line between what passengers will accept and what they will not. O’Leary just doesn’t seem to realize it because he’s in business to make money, not run an airline.

I always thought no one could be less customer-focused than United Airlines. Clearly I was wrong. The only thing that really worries me is that some airline bean counter here in the states might think Ryanair is on to something. They are of course. It’s just not anything good for airline passengers. And if you do fly Ryanair in the future, you just might want to bring along a can of Lysol to kill the germs. It’s going to get messy over there.

What can Tony Fernandes of AirAsia teach US airline executives? Servant leadership.

Shashank Nigam — Fri, 20 Mar 2009 04:23:16 +0000

: Image via Wikipedia

I read an article about Tony Fernandes, the CEO of AirAsia, in The Economist today that got me thinking. Thinking about the last few articles I’ve written about United Airlines, RyanAir and Southwest Airlines – on how they make money off their customers – what what works and what doesn’t.

There’re a lot of airlines in the US and Europe can learn from Tony Fernandes and AirAsia (+ Azran and AirAsiaX). Here’s how the article in The Economist ended.

“Mr Fernandes says that he came to the industry with no preconceptions, but found it rigidly compartmentalized and dysfunctional. He wanted AirAsia to reflect his own unstuffy, open and cheerful personality. He is rarely seen without his baseball cap, open-neck shirt and jeans, and he is proud that the firm’s lack of hierarchy (very unusual in Asia) means anyone can rise to do anyone else’s job. AirAsia employs pilots who started out as baggage handlers and stewards; for his part, Mr Fernandes also practises what he preaches. Every month he spends a day as a baggage-handler; every two months, a day as cabin crew; every three months, a day as a check-in clerk. He has even established a “culture department” to “pass the message and hold parties”.”

I wonder when Glenn Tilton last flew Economy Class on United Airlines and when Michael O’leary helped load the baggage on RyanAir…if they did, they probably would learn not just a lot more about their employees, but also their customers, don’t you think?

I wonder why is it that the concept of servant leadership is lacking in the airline industry?
Especially in the Western world. We know that exceptions like Southwest exist, but why don’t others do it too, when they see this working out well?

I’d love to hear your thoughts in the comments.

Hot topic: Will Ryanair charging for toilets work for its brand?

Shashank Nigam — Wed, 04 Mar 2009 04:17:46 +0000

: Image via Wikipedia

For the last couple of days, I’ve been at the Aviation Outlook Middle East, as a keynote speaker (check out my presentation here). You’d expect that the hottest topic might be the recession, or the threat/opportunity for Low Cost Carriers in the Middle East (see my interview on that here). But ironically, during the panel discussions, during the networking breaks and even during cocktails, the hottest topic for discussion was Ryanair charging for the use of toilets in-flight!

Will charging for the loo work for the brand?

From the amount of buzz just one statement from Michael O’Leary has generated, it looks like the move has already worked for Ryanair. Afterall, no PR is bad PR! And the Ryanair CEO is probably one of the best when it comes to getting free PR anyway, just like Richard Branson. The two of them are icons for their respecive brands, like Steve Jobs is for Apple, and it adds an X-Factor to the brand (read more in my whitepaper) that most other airlines cannot compete with.

So, even though the official press release from Ryanair did not commit to such an initiative, the PR generated by that one statement probably doubled the hits on Ryanair’s website, which is a major source of revenue for the airline.

Extra charges, in-sync with Ryanair’s brand positioning

Ryanair has a very clear and distinct brand positioning – that of the lowest seat price provider. They promise to give the traveler the cheapest seat possible (a friend bought a ticket from London – Barcelona for $5 last week!). And everything else is charged for. And Ryanair has made this positioning clear to its customers. So people either love Ryanair, or hate it. And Ryanair cares about those of love the airline, and caters to their needs.

Now, if these people are already used to paying additional for check-in bags, credit card payments and other add-ons, then this is just another in the list. It’s the right strategy for the right customer segment. Now, this will not work on another airline, like United, which has advertisements showing off its latest First Class, and treats its Economy passengers very differently. But Ryanair might be able to pull it off.

“The Good, the Bad and the Irrelevant” airlines

I was listening to Dr Nawal Taneja, an aviation guru from Ohio University, and he mentioned an important point. He said that at the end of the recession, there will be the Good airlines that emerge the strongest, the bad ones, which will disappear and a large majority of “irrelevant” ones, which will just exist for the sake of it.

I believe that Ryanair will not be in the last category. They’ve got a distinct brand positioing and their actions reflect that distinctiveness in almost everything that they do. And as long as their means of earning ancillary revenues are in-sync with the brand, they’ll succeed.

What do you think? Is this a good move by Ryanair? Will charging for toilets chase away current customers? Will it prevent new ones from trying the airlines? Will this be detrimental to the brand? Let’s discuss.