Business Irish

Friday 26 May 2017

Ryanair intensifies its plan to capture business flyer market

Airline has spent over two years on an image makeover which has paid huge dividends

Ryanair chief executive Michael O’Leary plans to expand the number of UK locations served by the airline, but the carrier has ruled out Heathrow as a Ryanair destination Photo: Bloomberg
Ryanair chief executive Michael O’Leary plans to expand the number of UK locations served by the airline, but the carrier has ruled out Heathrow as a Ryanair destination Photo: Bloomberg
John Mulligan

John Mulligan

Ryanair will focus on significantly enhanced digital retail services, as well as more improvements for business travellers as it rolls out the next phase of its self-styled 'Always Getting Better' campaign on Tuesday.

It's the latest major push by the airline, headed by Michael O'Leary, to improve its image and suite of offerings as it continues its march across Europe with a huge expansion of its fleet.

Chief marketing officer Kenny Jacobs told the Sunday Independent that the airline will unveil retail solutions that are a first in the airline industry, and some that are not even offered by current mainstream retailers. He declined to give specific details, however.

But the airline has embraced digital innovation to ensure it remains the leading European low-cost carrier.

It created its Ryanair Labs division to spearhead digital development for the carrier. It employs close to 200 people.

The head of that unit, John Hurley, has even previously indicated that Ryanair would contemplate acquisitions in the technology sector that would add value to the airline's development strategy.

Mr Jacobs also told the Sunday Independent that Ryanair will also roll out non-ancillary improvements aimed at business customers, for instance, that will include elements of in-flight service, but also focus on its fare products.

Ancillary items, on the other hand, include anything from sandwiches and cups of tea sold on board, to insurance products bought by customers when booking their flights.

Ryanair has engaged in a huge push to attract business travellers as it targets more primary airports to help fuel growth. Mr Jacobs said "anywhere but Heathrow" is a likely candidate for Ryanair flights. Last week, Ryanair said that it will open its 84th base - at Prague, in the Czech Republic - in October.

The airline has also been scheduling frequencies to primary airports that make it viable to use the airline for business travel that's often completed within one day.

Ryanair launched a major image and service revamp in 2013, following much debate at executive level about what the airline needed to do to spur growth.

Rival Easyjet had fundamentally changed its approach to customers before Ryanair, and the Irish airline took lessons from that evolution.

The continuing process has seen Ryanair redevelop its website to make it easier and quicker to book; ditching or slashing the cost of penalties for things like re-issuing a boarding pass; allowing flyers to take a second, small bag on board free of charge; and even a baby bottle warming service as it tries to entice more families to fly with it.

Mr Jacobs said the next phase of the Always Getting Better Campaign will include about 75pc innovation, compared to previous iterations that were split 50-50 between fixing and improving existing services and functions, and introducing fresh innovations.

He said there will be "constant improvement" of the initiatives it has already introduced.

The transformation campaign has so far paid huge dividends for Ryanair, which has credited the Always Getting Better programme with helping to boost its profits and passenger numbers.

The airline carried 101.4 million passengers during the 2015 calendar year, and has predicted that will be carrying 120 million by 2019, and 180 million by 2024. It recently took delivery of its 400th aircraft, and will have more than 500 in its fleet by 2024.

The airline expects to make to have posted a profit of about €1.2bn in the 12 months to the end of March this year, compared to €867m in the previous financial year.

One of its main geographic targets for growth is Germany. The airline wants to capture a 20pc share of the market there by about 2020. It ended 2015 with a 5pc share.

Mr Jacobs said last month that Ryanair is so far ahead of target in terms of growth in Germany, and expects to have between an 8pc and 10pc share of the market there this year.

Sunday Indo Business

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