Michael O’Leary, CEO of Ryanair, is in a bit of hot water.
According to the Irish Independent, O’Leary recently called Ryanair passenger Suzy McLeod an “idiot” and “stupid.” When asked about this odd approach to customer service, O’Leary did not back down. He explained, “I had not been intemperate, I had not lost my temper and it was not a tirade.”
The story began when Suzy showed up at the airport for her Ryanair flight without printed boarding passes. As a result, she had to pay fees totaling €298, about €60 per ticket. Outraged, she went on Twitter and complained, asking for a refund as a gesture of goodwill.
The normal response in a situation like this is for the company to apologize and refund the money. But Ryanair didn’t take this approach. Instead, the CEO observed that Suzy was stupid. O’Leary explained the response, “…we have replied, politely but firmly, thank you Mrs. McLeod but it was your f***-up and if you screw up, you compensate us and you send us a gesture of goodwill.”
Most people would call this an example of terrible customer management.
I disagree; I think this is an example of a brand wisely sticking with its strategy.
Ryanair is an exceptionally low-cost airline. The brand’s positioning is clear: Ryanair has low prices, poor service and high fees. It is hard to beat Ryanair on price but there are tradeoffs for passengers. Traditional airlines struggle to compete with Ryanair; they just can’t match the fares while delivering a generally acceptable level of service.
By strictly enforcing rules, Ryanair clarifies its positioning. It isn’t a luxury airline. It isn’t a gentle or kind airline. It doesn’t really care about goodwill. It is a cheap airline, arguably the best cheap airline in the world.
Ryanair was smart to deny Suzy’s request. The wording wasn’t perfect; the CEO shouldn’t have called her an idiot. But standing up for the brand was the right move.
A few pages after this article in the Irish Independent there was an ad from Ryanair advertising flights from Dublin to Rome for just €26. The brand’s proposition is clear: low prices and little service.
This is a fantastic little website I can not believe I didn’t wander onto it already.
Ryanair’s code of conduct states this commitment to it’s customers “For our customers, Ryanair is committed to fulfilling their needs in an honest and fair manner.”
Honest and fair can be interpreted differently in this particular case. On Ryanair’s side, clearly being charged nearly 5 times your original ticket price for not printing boarding passes is both fair and honest. On Mrs Mcleod’s side, fair may not be a word, she uses to describe this airline or her experience. I agree with CoreyBlake9000’s comment above that the the CEO has clearly laid out what Ryanair values.
As long as consumers continue to be OK with a trade off of low prices over customer service, Ryanair will be ok. But how sustainable can this positioning be in the long term when competitors can offer both low prices and great customer service? Hubris comes before the fall in my opinion.
Sorry for the grammatical error above. Meant “its customers…”
I’ve heard terrible things about the Ryan Air CEO and his schemes to make money however in this instance all he’s done it respond to an unreasonable customer complaining in the public arena. Maybe if she had complained through the official channels the response would have been more tempered. His manner is bad but I doubt it will dent his business or his brand.
I have never flown Ryanair but it sounds like it is a European airline. I agree that low cost careers do not focus much on customer service. Their value proposition lies in their cost structure. However, they also do not advertise otherwise. It is one thing to have poor customer service but it is another to wildly publicize it. I think this may have detered some customers who would have otherwise flow Ryanair for the cheap price at least once. He could have reworded his response more politely, still got his message across and not have created negative publicity.
Nonetheless, thank you for posting this Prof Calkins! It is a lot of fun reading your blogs and providing feedback.
I do not understand why “customer service” should ever include humoring every demand of customers. I have never flown Ryanair. Do they not disclose those fees?
Interesting exploration of core values. Obviously “Customer Service” is not a value Ryanair has chosen to live by. While I agree that doesn’t make rudeness an appropriate response, their reaction certainly does make their values clear and that gives customers an opportunity to either get on the train and accept those values, or get out of the way and go elsewhere if they value customer service over price. What this experience highlights is the importance of placing your core values clearly on the table for your customers to react to. In this case, its a cut and dry illustration of the compass the company uses to make its decisions.