Alex Brummer writing for the Daily Mail suggests that Ryanair could become the next Sports Direct. The no-frills carrier and Mike Ashley’s retail chain have much in common, both are run by autocratic founders, and both believe that if you give customers what they want for the cheapest price they will not complain. Both also have subscribed that as long as you keep on expandingbyadding even more flights or more outlets and brands, then sales and profits will rise and investors will remain on side.
However, in adopting this approach Brummer suggests that Ryanair has lost a key ingredient for long term success; work force loyalty. In its latest effort to deal with its pilot capacityproblems,
BBC News Online writes about the latest problems affecting Ryanair and how that despite their self-proclaimed ‘mess up’ Ryanair will remain largely unaffected long-term.
The shareholders that the reporter spoke to that there was no issue with O’leary’s leadership claiming that Michael O’Leary is not some easy come, easy go, hired-gun chief executive. Although the airline was founded by Tony Ryan it became the biggest carrier of passengers in Europe under Mr O’Leary.
He owns four per cent of the company and has survived worse publicity than this. The reporter then goes on to suggest that higher pilots’ wages will not change the economics of Ryanair. All airlines try and bear down on cost as it is a competitive business, but the things that really affect profits are external factors like the world economy and the price of fuel. Both of those things are in the industry’s favourright now. When this current issue passes, consumers will return to looking at which airline can get them where they are going, at the price they want to pay.
The Times writes that passengers were met with silence from Ryanair yesterday as the budget airline was flooded with tens of thousands of complaints over its handling of the flight cancellation fiasco.
The article claims that travellers caught up in the chaos, said that they were unable to contact Ryanair for refunds despite spending hundreds of pounds on flights with other airlines.
It states that this week, Ryanair cancelled 18,000 flights between November and the end of March, affecting 400,000 passengers on top of the 315,000 passengers already hit by cancellations in September and October.
The airline was told on Thursday that it faced legal action by the Civil Aviation Authority (CAA) for misleading passengers. This included failing to tell them they were eligible to use a rival airline free of charge and receive expenses for hotels, meals and transfer costs.
On Thursday night, the CAA sent a new letter to Ryanair, giving the airline 24 hours to comply with a series of demands. By 5pm Friday, Ryanair must change its website to make it clear how it will reimburse passengers left out of pocket. It was also ordered to contact once again the passengers affected by the first round of cancellations after they were ‘misled’ over the possibility of being rerouted with another airline.
Independent Online comments that this will likely add around £20m to the ‘steadily rising bill for the mother of all airline-management muddles’.