Ryanair’s O’Leary calls upon retailers to ‘screw the airports’

By Charlotte Turner |

Michael-O'Leary-Ryanair-FTE-leadIn a typically candid and colourful presentation delivered at the Future Travel Experience conference (FTE) in Dublin, Ryanair CEO Michael O’Leary yesterday called on duty free & travel retailers to work with Ryanair to ‘screw the airports’, whilst restating his ambition for Ryanair to become the ‘Amazon of travel’.

 

On the topic of duty free and travel retail he shared his opinion that ‘retailers are getting screwed by the airports’ and said that for this reason transactions needed to be moved away from the airport.

 

He said airlines and retailers needed to work together to take the transaction out of the airport and make airport shops more like showrooms.

 

“It’s payback time,” he said. “Let’s all work together to screw the airports. Let’s work with the retailers to screw the airports.”

 

RYANAIR REVISES ITS ANCILLARY FORECAST

Interestingly, as has already been reported by TRBusiness, Ryanair’s ancillary revenue forecast has been revised up from 27% to 30% by March FY2020, which underlines Ryanair’s more concentrated focus on this area of its business.

 

Ryanair-slide-Europe's-lowest-fares

O’Leary believes that air fares will eventually be driven down to zero…at least on the the majority of flights.

 

Interestingly, his colleague in the audience yesterday revealed that 45% of the airline’s customers already buy ancillary products, although O’Leary was convinced this percentage was ‘much higher’ – at more like 60%.

 

Ryanair was also asked about ‘disruptors’ in the travel industry and the threat of these companies to the airline in particular, to which he replied. “Flights are not up for disruption. Everyone still has to fly.”

 

Despite the agility of the airline and the speed at which it can make decisions, O’Leary has been reticent to offer connectivity onboard up to this point. He said that this was down to the fact that he would be losing €80-100m a year due to a 4% drag factor – a result of fitting a very heavy aerial to the aircraft. “Our fuel bill was already €2bn last year.”

 

Michael-O'Leary-Ryanair-FTE-large

“It’s payback time,” says O’Leary. “Let’s all work together to screw the airports. Let’s work with the retailers to screw the airports.”

 

Since launching its package holiday service and the ‘MyRyanair’ personalised digital platform over a year ago, O’Leary has made it clear that revenue growth will not be driven by airline tickets.

 

RYANAIR TO TAKE ON BOOKING.COM IN EUROPE

Instead, the airline is openly and very publicly focusing on ancillary revenue generation. It also plans to ‘take on’ hotel/booking aggregator and price comparison sites, such as Expedia and booking.com which he deems ‘useless’.

 

“Booking.com are useless,” he said. “They don’t own a brick. We are going after them in Europe. I own the customer in Europe because we have the lowest fares.”

 

He reinforced his opinion about his reluctance to work with Google. “Google are not getting a cent of us.”

 

Ryanair have always been clear about their business model and have driven democratisation of travel harder and faster than any other airline. O’Leary believes that costs will continue to be driven down to basically zero. “The majority of seats will be free, obviously not on bank holidays and things like that.

 

MORE THAN JUST CREDIT CARD INFORMATION…

O’Leary readily admitted that Ryanair’s method of collecting customer data used to consist of just capturing their credit card information. He said they have since learned that they need to know more about their passengers.

 

However, he remained resolute in his opinion that the airline really owns the passenger, ‘not Google, Expedia or Booking.com’, who he believes are ‘scamming the customer one way or another.’

 

Michael-O'Leary-Ryanair-FTE-large-2

O’Leary readily admitted that Ryanair’s method of collecting customer data used to consist of just capturing their credit card information.

 

“We’ll be using real-time customer info to prompt packages, hotels, flights that customers want to book/order before they initiate the process themselves,” he added.

 

He also said that customers are given an incentive (a huge discount) to book directly on Ryanair’s website. Indeed, many other airlines have followed suit.

 

 

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