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Passengers checking in on Ryanair flights on Sunday will be the first to experience a modern-day seasonal redemption. The vow boss Michael O’Leary made to mend his ways, or to “stop unnecessarily pissing people off“, is bearing fruit. Like Scrooge banging on the Cratchetts’ door with a turkey, the airline is, in a small but significant change, letting passengers bring a second small carry-on bag – not least for gifts from the airport shop. But what were the visions of doom that spooked the Irish Ebenezer, and how is he changing course?
Musing on the ghosts of aviation past might lead O’Leary to a happy early scene recalled by Willie Walsh, chief executive of IAG. In his Aer Lingus days, Walsh’s employees watched and scratched their heads at Ryanair’s swift turnaround of aircraft at Dublin airport – an operation perfected like clockwork in half the time other carriers were managing. Ryanair transformed aviation with its cost-cutting, eliminating overheads and pulling in customers with fares rivals struggled to match. Baggage was discouraged and seating unreserved, to make the whole process as swift and cheap as possible. Fines for forgotten boarding cards seemed punitive but had their logic, as did a website designed to deter third parties from booking up blocks of cheap fares. Unfortunately, the cold logic ended up alienating many of the potential customers O’Leary wanted to attract.
It wouldn’t require the ghost of aviation present to suggest that not all is rosy for Ryanair, with two profit warnings between August and October. O’Leary, who has banked enormous wealth as a major shareholder, will have noticed a £30m hit when shares tumbled. Analysts have pointed out that while Ryanair has torn ferociously into the traditional market of legacy carriers with its low-fare model, it has been slow to recognise the space left for a cheap but welcoming alternative – specifically, one that could attract business travellers or families.
While Ryanair was paring its core service to the bone, rival easyJet made some counterintuitive moves for a low-cost airline – offering flexible tickets and allocated seating, to woo business travellers and, according to Douglas McNeill, investment director at stockbroker Charles Stanley, “stealing a march in terms of attitude to customers and positioning of brand”. A trebling in its share price since 2011 sent easyJet into the FTSE 100 this year.
O’Leary himself recently concluded after a mangled publicity offensive: “I’m getting in the way”. In a bleak portent for press conferences to come, he said he would withdraw from the spotlight. Could the ghost of aviation future really be pointing the man who launched a thousand headlines to a back seat?
Ryanair’s own retelling of A Christmas Carol might be more prosaic: a growing recognition of a need to change. Spooked or not, the changes are occurring: today’s hand-baggage concession follows a recent relaunch of the website, for easier booking in far fewer clicks, with a new booking app coming soon. Fines for lost boarding cards have been slashed. Last month, noisy adverts and the signature trumpet call on landing were banished for early morning and evening flights. Hold bag fees are to be cut from January. And allocated seating will be introduced, ending the scramble on board.
McNeill says: “There’s been a lot of talk about soft issues – the demeanour of the chief executive, the culture, improving the brand – all well and good. But a lot of what they need boiled down to concrete specific measures that can be achieved relatively quickly by pulling fairly specific levers.”
The need to attract businesses and families also dovetails with the ambitions of Stansted airport’s new owners, who also want to attract a new breed of travellers. The change to baggage rules comes with an eye on retail revenues at the airport acquired from BAA this year by Manchester Airports Group.
Andrew Lobbenberg, a transport analyst for HSBC, sees the business model evolving rapidly, mirroring those aspects of easyJet’s that have succeeded. Beyond the visible changes for consumers, he points to a major underlying change in network planning, with Ryanair planes increasingly landing at major airports. Expansion in Italy will continue apace, and permission for Moscow flights was granted last week. The proportion of flights going to minor cities’ secondary airports will drop from 30% today to just over 25% in 2014, Lobbenberg says.
Next year sees the start of deliveries of a massive fleet order: 175 Boeing 737s. McNeill says: “You’ve got to attract new customers, win them away from other airlines, and there’s no shortage of airlines around Europe who it can compete properly with on cost.”
After being belatedly confronted by its customer service problems, the face may be more welcoming, but the Scrooge tendencies haven’t vanished altogether: O’Leary won’t be expecting a Christmas card from the increasingly critical Ryanair Pilot Group.
And just as the airline again expands and moves into new territories next year, renewed economic woes could start to drive air fares down. As O’Leary points out, that is a battleground where Ryanair usually wins.
This article originally appeared on guardian.co.uk