Ryanair has little hope of becoming a Booking.com or Expedia but it could find new revenue streams if it convinces other airlines to enable it to sell their flights on Ryanair's sites.
Ryanair doesn’t love online travel agencies. It tolerates them, and is once again going after them.
But, in a twist and in a bid to become more comprehensive, the Irish airline is taking steps, online travel agency-like, to convince other airlines to allow their flights to be sold on Ryanair sites.
Over the years the Irish airline has been embroiled in all manner of arguments with various companies, including eDreams Odigeo and Google, for abetting the practice it hates most: screen-scraping. That’s a practice where third-party websites lift information from an airline website, for example, without any sort of cooperative technical integration or contract.
At the same time, Ryanair has been touting itself as the “Amazon of air travel” in an attempt to try and wrestle back some of the control airlines have handed to travel’s middlemen by becoming one itself.
The company’s chief marketing officer, Kenny Jacobs, has been at the forefront of many of the changes that have taken place at the company since joining in 2014.
He believes that airlines and the hotels missed the opportunity offered by the Internet back in the 1990s and 2000s, allowing online travel agencies, to seize the advantage. Now, he says it is time to fight back.
“I mean what does an OTA do other than put it all in front of you? And all we’re going to do is put it all in front of you and the advantage we’ll have is we have an incredible amount of visits and the advantage we have is it starts with the flight,” he told Skift.
“Because when you are that person in San Francisco thinking ‘I want to do a bit of a tour of Europe,’ you think of how do I get there. The travel equation starts with the airline. So If you’re an airline who sells everything, you have a good chance of getting those people.”
Ryanair has talked before about selling other airlines’ flights but recently took a step closer to achieving this when it began talks with Norwegian late last year. At some point in the near future, it looks like customers will be able to book a transatlantic flight on Ryanair.com — flights that are not operated by Ryanair, which doesn’t fly to the Americas.
“I would love people be able to come in and book … Boston, Bogota on the Ryanair website. I would love people be able to book cruise ships, camp sites. Hotels is an obvious one: We have that; holidays is an obvious one: we have that. But pretty much other airlines, all other airlines fares, we’re quite happy to share them,” said Jacobs.
He added: “When we start doing connecting flights with Norwegian and Aer Lingus I want an American to come onto the Ryanair website… and book San Francisco to JFK with an American airline; book JFK to Dublin with Aer Lingus and Dublin to Bergamo with Ryanair; and Bergamo to Berlin with Ryanair, and do all that from the one website on the one booking reference. Add the hotels, add everything else that you want to book.”
It is easy to see why Ryanair might be keen to add further revenue streams. Last year, Chief Executive Michael O’Leary said that tickets years from now might be free with money made from sharing airport revenues.
Ancillary revenues, including everything beyond the actual ticket, make up about 24 percent, or $1.7 billion (€1.6 billion), of Ryanair’s 2016 revenue. That figure is an increase of 12.5 percent compared with 2015 revenue.
Taking on the competition
To further its ambitions, Ryanair is not afraid to take on the competition.
“The Group is one of several online travel agents involved in litigation with Ryanair in connection with Ryanair’s efforts to prevent OTAs from booking and selling its flights,” said On the Beach in its most recent annual report, before adding, “Litigation is unpredictable and if Ryanair were to prevail, this could have a material impact on the Group’s business.”
Lastminute.com Group’s disputes are more extensive and concern a number companies in different jurisdictions. In two of these cases, Lastminute.com noted: “the likelihood of success for Ryanair Ltd is remote.”
“We are suing Expedia at the moment because they’re scraping, they’re not using our licensed API [application programing interface] and we’re saying to Expedia, use our licensed API. You’ll get our full inventory, you can show our full inventory, you will be a partner of ours but you’re using our licensed API and it comes with a hefty charge of one euro no matter how many bookings for the full year. It’s basically for free. We want them to use the API,” Jacobs said.
Skift contacted Expedia. A spokesperson declined to comment specifically on the litigation but said: “We believe the best way to empower that customer choice is through a transparent marketplace with as many options as possible.”
When Ryanair rejoined the global distribution systems after a gap of a decade it looked like the end of the war with third parties but in truth hostilities have never ended. That might be because while Ryanair is happy to sign deals and relinquish some of its fares, it holds back its three lowest categories.
“We work with a number of GDS providers, who access our inventory in an agreed and legitimate manner, and we trust that our partners do not authorise any collaboration with [online travel agencies] to mis-sell our flights,” the airline said.
Although Ryanair also grants licenses to some metasearch sites such as Skyscanner for comparison purposes, this to could be heading for problems should any decide move into the realm of instant booking.
Online travel agencies see Ryanair’s aggressive tactics as an attempt to limit consumer choice, while Ryanair says the online travel agencies simply aren’t sticking to the rules. This argument is going to run and run.
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Photo credit: Ryanair is in talks with Norwegian to sell Norwegian's flights, and wants to do the same with other airlines that fly to the Americas. Norwegian Air