A New Flight Path for Ryanair… Could Be More Turbulence Ahead

By John Keilthy

Ryanair is in the news again. “Nothing new there”, you might say. “Isn’t that the idea?!”  

Since its inception – and particularly over the last 15 years – the low cost airline has specialised in generating hundreds of thousands, if not millions, of free newspaper column inches. The full page seat sale ads, the cheeky hijacking of news and high profile events, and Michael O’Leary’s penchant for dressing up in outlandish costumes, were all part of a very successful marketing mix.

It was all designed to take every opportunity to reinforce the airline’s simple but very effective customer messages - low fares, no frills, get you there on time.

It’s been a very effective mix of what are the most basic attributes of any airline, but ones that have worked a dream for Ryanair. 

But the recent headlines are potentially more significant as they could reflect the latest move by a business that is in transition from the sometimes irreverent, moody, argumentative, attention-seeking, risk-taking adolescent to a more considered, listening, patient, tolerant, predictable and mature adult. And it’s not because Ryanair necessarily wants to. But because it probably has to.

From a reputation perspective, Ryanair has been an anomaly.

The well-established reputation playbook suggests that strong, sustainable, value-creating corporate reputations are built on a foundation of multiple, interconnected so-called reputation dimensions including vision and leadership, products and customer service, performance (financial and otherwise), workplace environment, emotional appeal and increasingly, contribution to wider society.  


For Ryanair’s part, it seems to have majored on a small number of dimensions such as financial performance, its low cost product offering and the vision and leadership of the CEO.

And for a long time, this approach served the company very well. 

Shareholders were happy that the business continued to grow exponentially and this was reflected in its share price performance and the over €6 billion that has been paid to shareholders in special dividends and share buybacks; customers were delighted that they could get to unexplored parts of Europe on time and for next to nothing, and presumably employees were content with having a decent job in a fast growing airline at a time when other carriers were struggling.

But while Ryanair was growing its passenger, fleet and profits, stakeholders’ expectations of the company (and indeed all companies) were also growing.

The first signs of change for the airline came in 2014 when Michael O'Leary publicly declared that Ryanair would be investing heavily in improving its customer offering, stating he didn't want customers to have to "put up" any longer with a service that regularly saw the company top the consumer complaints league in the UK.

Then in the last year the company has done what for many (especially Michael O’Leary) was the unthinkable and made the move to recognise pilot and cabin crew unions and, in a case of be careful what you wish for, it’s the airline’s engagement with these unions that’s the source of its recent travails.

So it would appear that either consciously or unconsciously Ryanair is moving inexorably to a more traditional reputation management model which shouldn’t come as a huge surprise  for a company that is now Europe’s Number 1 airline, carries over 130 million customers annually on more than 2,000 daily flights and employs over 13,000 people.

Things have come a long way from 1985 when the airline was first launched and carried 5,000 passengers on its only route between Waterford and London, employed 25 people and had a share capital of just £1.

As for the future of Ryanair and its reputation, the classical Greek philosopher, Socrates, had some words of wisdom: 

“The way to gain a good reputation is to endeavour to be what you desire to appear.”

 

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