Ryanair suffering turbulence despite increased profits

Ryanair's reputation has been getting a drubbing on Gay Byrne's radio show

Ryanair's reputation has been getting a drubbing on Gay Byrne's radio show. Mr Tim Jeans, the airline's commercial director, has defended the company but the listeners are not listening. Ryanair's brand image is under threat.

The company's difficulties are encapsulated in the experience of Mr Lawrence Duffy, a chartered accountant with a practice in Wales and Skerries, Co Dublin, who wrote to Ryanair's chief executive, Mr Michael O'Leary, on November 13th.

Ryanair had informed him, Mr Duffy said, that his flight home after Christmas had been altered because of a revised winter timetable. His flight from Cardiff to Dublin had been changed from 12.15 p.m. to 10.30 p.m. He is travelling with two young children.

Mr Duffy says he has been offered alternative flights - on different days. "It is interesting that I had to pay for my flight in full when I booked it in September. I was also advised I would lose my money if I tried to alter the time of travel."

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Mr Duffy is not interested in compensation: "these days that seems to be an insurance policy against poor management". He told Mr O'Leary: "I would like you to be aware of the difficulties you caused just one customer. Car hire had to booked two months ago - will I be able to alter dates at the busiest time of the year? I doubt it."

His wife, Mr Duffy added, booked her work schedule around me taking the children to see their grandparents and it was now too late to change.

The day Mr Duffy posted his letter Ryanair reported a 36 per cent increase in turnover of £96.9 million for the six months to the end of September.

Profits after tax, when certain non-recurring items are taken out, increased from £12.4 million to £18.6 million. Could there be a link between the factors fuelling the criticism and the increased profitability?

There is no doubt that the tourist industry owes an enormous debt to Ryanair and the company still enjoys widespread goodwill. Almost single-handedly, Ryanair revived the fortunes of an industry which spent most of the 1980s in the doldrums. The callers to Gay Byrne have long since lost any sense of this gratitude. Their almost uniform theme has been that of Mr Duffy: a failure of Ryanair to understand or care about its customers. Ryanair replies that its looks after its customers in the way customers most appreciate: the lowest cost of competing products.

British Airways is now going into the no-frills airline business. The conventional wisdom is that large carriers are too unwieldy to successfully introduce a no-frills product. However, BA is among the leanest and meanest of the global carriers and the conventional wisdom may not apply.

Meanwhile, Aer Lingus has introduced a £49 return fare from Dublin to Stansted compared with Ryanair's £39, bringing more pressure on a route which is already intensely competitive. Ryanair must re-establish the brand as the customers' friends. The callers to Gay Byrne would suggest this has become a formidable task.