Recently, at Valuewalk, we looked at the causes behind Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA)’s falling share price and what the airline could do to prevent customers defecting to rival airlines, given greater competition on price and Ryanair’s reputation for horrendous customer service.
O’Leary improving Ryanair’s customer service
Well, now it would appear bad boy CEO, Michael O’Leary, has been paying attention. In a dramatic departure from the usual Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) rhetoric, O’Leary has made a commitment to improve the way it treats its customers:
‘I think in the past we have responded with far too much of a blank – ‘Look, that’s the policy. Go away’. Now, we have to be a little bit more sensitive and responsive to the customers. It’s about evolution, not revolution.’
But can O’Leary escape his past?
Up until now, CEO, Michael O’Leary has led the way in ‘anti’-customer service, ridiculing customers with statements such as the one concerning the boarding pass fee issued at the airport for those who don’t print theirs out at home:
‘We think they should pay 60 euros for being so stupid.’
But after issuing a poor set of results and a profit warning, the company has come under pressure from shareholders to change the way it treats customers, especially after the recent kerfuffle regarding Dr Muhammad Tufiq Al Sattar. The doctor, who was working in Dublin, was charged €188 to change to an earlier flight back to the UK to get to his family who had been murdered in arson attack. Even shareholders were quick to condemn the company’s actions.
Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) said later it would refund the money, but this was all a little too late to change public opinion. One newspaper’s headline said it all: ‘Ryanair sinks to new low’.
Too little, too late?
So, in the same week that the airline received a fine of €10 million from a French court for breaching labour laws, Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) has unveiled plans to overhaul ‘abrupt’ corporate culture and improve customer relations.
However, when Valuewalk asked Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) how it would do this, the company seemed to focus mainly on making the booking process easier for customers. Certainly, the website could be improved. It takes much longer to make a booking online with Ryanair than it does with competitors such as Easyjet and Aer Lingus. It’s also much harder to identify and remove hidden extras. O’Leary admits himself it could be better:
‘If you look at the way our website works it’s very clunky…. It’s the source of most complaints I get from customers. They like our fares, they love our punctuality, they like the service we deliver but they think the website is awful and I agree with them.’
‘Our primary focus this winter will be to significantly invest in, and improve, the Ryanair.com website, our mobile platform and our interaction with passengers using social media. We are pleased to remove Recaptcha from November for individual passengers, although the security feature will remain in place for high volume or multiple IP addresses in order to deter larger travel agents, screenscrapers and others.’
‘This winter will also see a rolling programme of development to improve the Ryanair.com website, make it easier for passengers to navigate, quicker for them to locate our all-inclusive price quotes, identify availability of our lower fare promotions and book Ryanair’s great fares for themselves and their families.’
Customers don’t forget bad service
To be fair, the airline has made their mobile app free of charge, opened a Twitter account and finally provided an email address for complaints. This mightn’t seem like much, but, until now, customers had to write a letter or call a premium rate number. That said, the airline only relented on this after pressure from the National Consumer Agency.
Mr O’Leary may find that changing public opinion will take a lot more than just being giving customers a free app or opening up an avenue to engage with customers. What Ryanair really needs to do is look at improving the service offered by customer-facing staff and actively respond to customer criticism by changing or even removing unpopular policies.
As every good business owner knows, it’s much easier to annoy customers than it is to please them. Undoing current customer sentiment may be O’Leary’s biggest challenge yet.