Hardly a week seems to go by without Ryanair Holdings plc (NASDAQ:RYAAY) announcing some new policy as part of their new ‘customer-friendly’ initiative. This week, Michael O’Leary says that he is working on a partnership with Google Inc (NASDAQ:GOOG) that will dramatically change how we buy plane tickets in future.
“There are some very exciting developments with Google Inc (NASDAQ:GOOG) where we have been working with them on sharing the pricing,” O’Leary said. “We’ll be sharing the Ryanair Holdings plc (NASDAQ:RYAAY) pricing through all of the Google outlets, so when you go in, there’ll be route selections, cheapest prices and so on. Google Inc are developing a price-comparison thing themselves. They want to launch with us and we’re working with them on that kind of product.”
In typical O’Leary style, he added:
“It’ll blow comparison sites, like Skyscanner, out of the water.”
Transparent pricing for air travellers
In order to make it happen, the budget airline has shared confidential pricing information with Google. It’s thought that the new Google Inc (NASDAQ:GOOG) service will display fares by all airlines to a specific destination. Customers who are interested in purchasing a particular deal will then be directed to the airline website.
Google will be displaying fares from all airlines, so they will be no charge to Ryanair Holdings plc (NASDAQ:RYAAY) to use the service, says O’Leary. All revenue will come from advertising.
But what benefits are there for the budget airline if competitors will be advertising their fares alongside Ryanair’s? O’Leary believes, because Ryanair will offer the lowest prices, then the airline will gain more customers from the initiative.
“They don’t want to have a limited or biased search. They want to be able to say they’ve screened all of these airlines on all of the routes. They need to find who has got the lowest airfare on these routes… and that’s us!”
Ryanair expects the project to go live by the end of March, but Google Inc (NASDAQ:GOOG), which already has a Flight Search Service in the UK and a number of partnerships with airlines, said it had ‘nothing new to announce at this stage’.
Ryanair flying into the future
O’Leary says it’s the start of a drive to integrate more technology into its services:
“In Europe, the flying won’t change much, but the distribution will change massively. It’s all going to move to digital and mobile. The opportunities for ancillary revenues through mobile are enormous. In five years’ time, everyone on Ryanair Holdings plc (NASDAQ:RYAAY) will be paying on their mobile. You’ll pay for your drinks and snacks with your mobile. You’ll upgrade to priority boarding on your mobile.”
O’Leary also said that Ryanair intends to launch a personalised marketing initiative known as MyRyanair, whereby the airline will tailor offers to different types of travellers:
“For example, if you fly business 12 times a year, we’ll say something like: ‘Fly 13 times and here’s a free ticket for your wife’.”
It’s a savvy move by Ryanair Holdings plc (NASDAQ:RYAAY) and one that should win over new customers. O’Leary is adapting his business model to attract more business travellers and those who are prepared to pay that little extra to fly with the likes of Aer Lingus.
Ryanair Holdings plc (NASDAQ:RYAAY) has made massive changes to its business model in a relatively short period of time. It will be interesting to see how these customer-oriented strategies translate in the bottom line come Ryanair’s next set of figures.