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Title: Ryanair Customer Satisfaction
Description: A comprehensive research into Ryanair's customer satisfaction, their strategies, and how they can improve their customer relations. Research question: Will Ryanair financially benefit from focusing more on customer satisfaction?
Description: A comprehensive research into Ryanair's customer satisfaction, their strategies, and how they can improve their customer relations. Research question: Will Ryanair financially benefit from focusing more on customer satisfaction?
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Business & Management
Title:
Title Question:
Ryanair Customer Satisfaction
Will Ryanair financially benefit from
focusing more on customer satisfaction?
Table of Contents
Introduction
...
2
SWOT Analysis
...
4
Financial Benchmark
...
6
Customer Satisfaction Discussion
...
8
Bibliography
...
9
1
Introduction
Ryanair is an Irish airline established in 1985, and is widely known for being one of the cheapest
airlines in Europe
...
1 As a result, many of Ryanair’s
customers have become outraged and complained due to these “hidden” additional expenses
...
Then the 4P’s of marketing
of Ryanair will be listed to review exactly the service Ryanair is offering and how they manage to
offer it at such a cheap price
...
Finally, Ryanair’s annual report for 2015 will be used to determine whether Ryanair’s
increasing profit-focused strategies has benefited them, and then come to a conclusion whether
they would actually benefit financially from focusing more on customer satisfaction
...
“Keeping Passengers Happy is Not What Makes Airlines Profitable, Study Finds
...
2
...
3
...
4
...
Ryanair had a place near the bottom
...
“Ryanair Annual Report 2015” is Ryanair’s annual financial report for the year of 2015,
revealing vast yearly increases in revenue over the past decade
...
gl/5fmQzh
2
To begin this commentary, a SWOT analysis will be created to sort out the different aspects of
Ryanair and to create a starting point for the rest of the commentary, as an overview of the
circumstances of Ryanair is important to have
...
2
-
Bad reputation of not focusing on the
customers and exploiting them for
profits
-
Extremely quick growth of market
share
-
Expansion to outside of Europe
-
Very low customer satisfaction
-
Rated one of the worst customer
brands by Which magazine3
Strengths
Weaknesses
Opportunities
Threats
As can be seen on the SWOT analysis created above, most of Ryanair’s strengths are due to their
cheap prices that also allows them to hold a strong position in the European airline market
...
Due to these hidden extra fees, they have also earned a very bad reputation
amongst consumers in the airline market
...
gl/5fmQzh
Appendices: Which: Best and Worst Brands for Customer Service?: https://goo
...
Due to their cheap flights, their market
share has been growing extremely quickly, and Ryanair is already on their way to dominating the
European airline market
...
In order for Ryanair to be able
to do this, it is important to know whether their very low customer satisfaction will halt their future
...
4P’s of Marketing
Cheap and direct flights to many major
European cities
Advertised price is extremely low
compared to other airlines, e
...
$29 for
a flight from Madrid to Paris
...
4
-
Very little budget on marketing
compared to other airlines
-
They are not affiliated with any
advertising agency, since they advertise
themselves
-
Nearly every single Ryanair
advertisement promotes their cheap
prices
-
Ryanair only utilizes online booking,
which reduces their costs
-
Price
-
-
Product / Service
Only operates in Europe
Promotion
Place
4
Appendices: Investopedia: Why is Ryanair So Cheap?: http://goo
...
Furthermore, Ryanair increases their profits even more by not using any advertising
agencies, since they advertise themselves with simple advertisement promoting their cheap flights
...
Now that all the relevant information about Ryanair has been given, it is time to look at whether
their low customer satisfaction affects their profit compared to other airlines who do focus on their
customers a great deal more than Ryanair does
...
Financial Benchmark
Firstly, Ryanair will be benchmarked against the leading airlines worldwide based on net profit5,
which can be seen below
...
As explained before, this is because they have a special
strategy to increase their profit
...
5
6
Bibliography: Statista: Leading Airlines Worldwide in 2013 Based on Net Profit: http://goo
...
gl/P0bnkT
5
As can be seen above, Ryanair is the airline in Europe that has the highest operating margin, which
means that they are the airline in Europe that keeps the biggest percentage of their revenue
...
This allows them to keep a
huge margin of their revenue, which the other airlines use for their expenses, such as different
agencies
...
To do this, Ryanair’s annual report of 2015 will be looked at, which contains a graph showing the
changes in Ryanair’s profit over the last six years7
...
Their
change in profit from 2014 to 2015 was +66%,
even though their change in revenue was only
+12%
...
The Ryanair annual report
of 2015 is evidence that Ryanair’s decreasing
focus on customer satisfaction does not mean
that their profits have decreased at all
...
gl/GjjtTc
6
Having looked at all the relevant data and information about Ryanair, it is time to actually see
whether Ryanair would financially benefit from focusing on customer satisfaction
...
6 times more profit to your company than a
“somewhat satisfied” customer
...
A totally dissatisfied customer decreases profit to your business 18 times more than a totally
satisfied customer contributes to a company
...
However, everything is not as it seems in
the airline market
...
”9
According to the article, the IATA surveyed 60,000 fliers from everywhere, asking them about their
satisfaction regarding different airlines
...
The article explains exactly why the airline market defers from the traditional
correlation between customer satisfaction and profit
...
In the current generation, when an
airline introduces a new service or product in their airplanes, such as new seats, it gives off the “wow
factor” and everyone looks as it as an innovation, but only for a short time
...
This is an ongoing process, and it means
that the strategy to satisfy customers for airlines is not introducing new innovative services or
products, but to meet their expectations and fulfill their “spoilage”
...
Instead of trying to make these short-lasting innovations, that cost
extreme amounts of money to invent and manufacture, they offer cheap and direct flights to major
cities
...
gl/QGOhQq
Appendices: Fox News: Keeping Passengers Happy is Not What Makes Airlines Profitable, Study Finds:
http://goo
...
Through their microtransaction pricing strategies, they have acquired a very low customer satisfaction
...
All this leads to the results that Ryanair would not financially benefit from focusing more on
customer satisfaction
...
Considering Ryanair’s future, they would possibly also financially benefit from focusing
more on their customers
...
Word Count: 1496
8
Bibliography
Leading Airlines Worldwide in 2013 Based on Net Profit
Statista (2014)
...
gl/rZsBnp
Europe Airline Profitability 2012 Based on Operating Margin
Retrieved February 3, 2016, from Rewardingtravels
http://goo
...
gl/ZOJEX0
The Importance of Customer Satisfaction
Frumkin, T
...
gl/QGOhQq
Why is Ryanair So Cheap?
McFarlane, G
...
gl/5fmQzh
Best and Worst Brands for Customer Service
(2014, October)
Retrieved January 12, 2016, from Which
https://goo
...
gl/GjjtTc
Please Note
The links above are all http://goog
...
This means the
bibliography contains short links instead of extremely long links
...
(2015, April 16)
Retrieved January 25, 2016, from Nanorep
10
11
3
Why is Ryanair So Cheap?
McFarlane, G
...
14
Title: Ryanair Customer Satisfaction
Description: A comprehensive research into Ryanair's customer satisfaction, their strategies, and how they can improve their customer relations. Research question: Will Ryanair financially benefit from focusing more on customer satisfaction?
Description: A comprehensive research into Ryanair's customer satisfaction, their strategies, and how they can improve their customer relations. Research question: Will Ryanair financially benefit from focusing more on customer satisfaction?