Friday, October 23, 2009

No Apologies From the Boss of a No-Frills Airline

August 1, 2009 NYT

A critical component of creating competitive separation is deciding what you ARE and what you are NOT while meeting needs or creating outcomes for a large enough segment of customers. Ryanair is an example that some may think is counterintuitive. They do NOT deliver service but low fares, a good on-time record, few cancellations and few lost bags. The key is to be good enough to be world class in delivering your Value Promise to your target customers to keep yourself separate from you competitors in the eyes of your customers:

RYANAIR flies more than 850 routes across Europe, often to obscure airports far away from big cities — “from nowhere to nowhere,” in the scoffing words of Sir Stelios Haji-Ioannou, who runs the competing airline EasyJet. Ryanair’s post-tax profit fell by 78 percent in the year that ended in March, but still amounted to $149 million. While most carriers are hemorrhaging passengers, Ryanair expects its passenger numbers to increase, to 68 million this year from 57 million in 2008. ……..
The mystery is why so many people are willing to put up with an airline that, in the words of The Economist, “has become a byword for appalling customer service, misleading advertising claims and jeering rudeness towards anyone or anything that gets in its way……”
………“Nobody helps you — it’s as simple as that,” said Malcolm Ginsberg, editor in chief of the travel newsletter, describing what happens to Ryanair passengers who need assistance at the airport.

That is not the point, Mr. O’Leary said in a recent interview. “Our customer service is unlike every other airline, which has this image of, ‘We want to fall down at your feet and you can walk all over us and the customer is always right,’ and all that nonsense.”

By contrast, Mr. O’Leary continued, Ryanair promises four things: low fares, a good on-time record, few cancellations and few lost bags.(critical driver of their competitive separation)

“But if you want anything more — go away! Will we put you in a hotel room if your flight was canceled?” Mr. O’Leary asked rhetorically. “No! Go away.”

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