Being nice pays off for Ryanair as customer numbers jump
Monday 03 February 2014
Ryanair boss Michael O’Leary’s attempts to woo back passengers by shedding its image for poor customer service and imposing punitive charges at every turn appears to be working as the airline saw customer numbers rise by 6 per cent to 18 million.
The maverick chief executive revealed that seat promotions and lower fares meant sales were down 9 per cent in the last three months, leaving a €35 million (£28.8 million) loss.
He added that even though takings for tickets fell, the amount passengers spent on extras such as reserve seating, priority boarding and higher credit card fees rose, meaning ancillary revenues jumped 13 per cent over the period.
O’Leary said last year that he wanted to overhaul the abrupt culture of the business, following a profit warning in November and years of being voted among the worst companies for customer service.
He had been criticised for telling customers they deserved being charged extra for forgetting to print boarding passes or getting information on their tickets slightly wrong.
Today the company said its new initiatives were paying off and been fully implemented, including offering a free second carry-on bag, a 24-hour grace period to correct minor booking errors and reducing boarding card and airport bag fees.
Allocated seating has also proved popular, with a €5 surcharge per seat. Ryanair also wants to focus more on winning over business passengers to plug the losses, which the company said were in line with expectations.
Meanwhile, Flybe said the economic recovery in the UK means bosses will reduce job losses by 10 per cent. The result is that about 450 staff will lose their jobs, rather than the expected 500.
A huge restructuring has seen 30 unprofitable routes cut, with write-offs of £14 million expected this year and a further £27 million in 2015.
Sales in the third quarter fell to £142.9 million from £165.5 million.
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