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"Serves You Right" by Barry Urquhart

Michael O’Leary is the Chief Executive Officer of Ireland-based Ryanair, Europe’s largest low-cost airline. He is widely considered to be abrasive, arrogant and unforgiving about the lack of in-flight customer service, poor baggage allowances and seemingly excessive cost penalties for passengers with heavy hand bags. Long-term success and growth tolerate such attitudes, behaviour and cultures.

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By Barry Urquhart

Michael O’Leary is the Chief Executive Officer of Ireland-based Ryanair, Europe’s largest low-cost airline.
 
He is widely considered to be abrasive, arrogant and unforgiving about the lack of in-flight customer service, poor baggage allowances and seemingly excessive cost penalties for passengers with heavy hand bags.
 
Long-term success and growth tolerate such attitudes, behaviour and cultures.
 
However, beware economic downturns. In recent times, O’Leary has learnt that efficiency and low costs are not the sole drivers of consumer demand, repeat business, loyalty and competitive edge.
 
Value, largely based on expectations of good courteous service, timely departures and arrivals, attractive and spacious airport and in-flight facilities remains attractive to an overwhelming majority of consumers.
 
Since June, Ryanair share prices have collapsed by around 30%. Utterances by the Chief Executive about customer care, allowances for extra handbags and cheaper prices have not been met with increased demand.
 
When customers are fed-up with poor, indifferent and inconsistent service it is difficult to enhance competitive standings. Ryanair is learning the lessons of Tiger Airways in Australia, which in the past contaminated the image, market positioning and preference for its previous parent, Singapore Airlines.
 
A similar example is Target, the discount department store, is doing similar for the related wholly owned by Wesfarmers-owned retail operations.
 
In Australia, there is an interesting story is unfolding. Qantas is a premium full-service international and domestic airline. Its subsidiary, Jetstar, is positioned as a low-cost domestic and international competitor.
 
Jetstar is being assigned priority in the introduction of the technology-advanced Boeing 787 Dreamline aircraft which features spacious leg room, larger windows and higher in-cabin humidity – which lessens the incidence of jet-lag.
 
The older Jetstar Boeing and Airbus aircraft will be retired from its fleet and migrated to fly under the Qantas livery. So, intending travellers will be provided the choice:
 
Jetstar or jet lag.
 
Whatever happened to the Qantas promise of great service and unparalleled safety? Each is a cornerstone of service... and of sustainable competitive advantage.
 
To those who take focus off customer service and suffer the consequences of falling demand, revenues, margins, profits and share prices the marketplace is speaking loud and clear...
 
“Serves You Right!”