28 Oct 2013

Does Ryanair's CEO actually insult his customers?

Michael O'Leary, CEO of Ryanair recently went on-air for a live Q&A chat on Twitter. Irate Ryanair fliers made known their dissatisfaction - and true to form, Mr O'Leary offended and insulted a large number of them!

So how does he manage to run an airline without having any respect or consideration for air-passengers?

You may have a point if you think that people are psychologically prepared to endure hardship and insults as long as they can fly cheap. But I think the real answer is simpler still. After reading the many smart and well meaning comments on a related Linkedin article gives me the feeling that people misunderstand the meaning of "customer" in this case.


Allow me to explain... The Ryanair business model is almost entirely based on financial engineering.

According to this unoffical September 2013 analysis, "Ryanair flies on (government) subsidies and tax discounts." The brand's belligerant stance hides a highly complex financial structure that is designed to handle legal battles and maximise tax benefits.

In fact Ryanair, based in Ireland, paid zero net tax in 2009.

Ryanair's real revenue, and the multi-millions that Michael O'Leary rakes-in annually, come from Europe's political and bureaucratic setup. The air tickets, in-flight sales and on-ground charges paid by fliers are simply a means to reduce operating costs.

Now it's easy to see why O'Leary can insult passengers (end user) with impunity, isn't it? The passenger is not the real "customer" - and he does not matter in the grand scheme of profit-making. Ryanair's real benefactors are the ones that make the civil aviation laws and the giant tax-funded loopholes that O'Leary and his accountants fly their airplanes through.

This is the exact same thing with people who think they are "customers" of social networking sites. Sorry, you are only the end user. And in a way, you are the product being sold to actual paying customers - the advertisers.


Anuttam Jamloki said...

Hey Shanty, This is good man! I haven't been following the advertising scene these days, except for being forced to experience a lot of it everywhere. But it was great to see your articles, I'll keep coming back from time to time. Cheers!

Anonymous said...

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