Going into the UK August Bank Holiday, our airports begin to experience a surge in demand as many of us try to get away chasing the last of the summer sun. Ryanair has always managed to cause a stir in the aviation industry, but have you ever stopped to consider why they operate in the way that they do?
The business purpose of Ryanair is to offer low-cost and affordable air travel, and they very much remain the market leader in Europe, but how do they do it?
There are three simple yet highly effective principles that stand out within the Ryanair business model, helping create the levels of success experienced no matter what the market conditions are:
- If a plane is not flying, it is costing money, not making it
- Meticulous and sometimes aggressive management of processes, logistics, and partners to ensure costs remain low
- Any advertising is helpful advertising; even negative press coverage helps highlight their robust approach to processes – forewarned is forearmed
In this article, the logic behind the end-to-end customer journey of a Ryanair customer is explored and analysed to highlight how and why they manage process waste.
Booking
The approach to booking flights is now relatively standard across the aviation industry, with bookings being made via mobile apps or directly through an airline or holiday package website. Ryanair is no different here.
Once you have identified your desired location, flight times, and the number of passengers travelling, you are ready to book. It is at this booking stage you really begin to see the structure and rigidity of the Ryanair process.
When progressing with the booking, you are presented with a table of “upsell” options which help determine what your requirements are. The table is very much tailored to the amount and the type of luggage you will be taking on the aircraft. Getting this commitment early in your journey is critical for the Ryanair model as this helps with logistics planning for aspects such as check-in staff, ground staff, fuel loads and calculating available space for cargo.
Once the booking is concluded, you can amend your booking in advance of your flight but there will be costs applied so it pays to be organised. This is the first example of where Ryanair have “waste” in their process and incur costs to modify your booking. Their answer – make this customer pay for it.
Check-in
We have all seen the newspaper articles where families have been charged significant amounts to obtain boarding passes to catch their flight. With customers selecting their requirements at the initial booking stage, Ryanair can plan staffing and logistic requirements more accurately as they know how many customers and how many pieces of luggage they are required to handle for each individual flight.
Waste occurs in the process when customers who are not expected to arrive at the check-in desk try to use it. This creates additional costs and time in their process that are not factored into the ticket price; their answer– make this customer pay for it (up to £55 per person).
Overweight luggage follows a similar pattern. Your agreed weight is budgeted for in handling and fuel allowances. If you exceed your weight limit, Ryanair’s costs increase; their answer– make this customer pay for it (£9 – £11 per kg)
Boarding
Boarding the plane is where Ryanair really comes into its own in managing (and monetising) its processes, flows, and waste. Many of its techniques to manage and control waste and flows are seen as controversial and are the source of frequent public frustration.
Again, your initial booking determines how you will be managed and why.
Customers who have booked hand luggage are given priority boarding. Aside from giving priority as the customer has paid more, this is done for two reasons. One, it ensures the overhead lockers are filled with bags of paying customers; two, the speed of boarding is increased as there is more room for the larger bags to be placed.
A regular frustration is the process whereby the boarding team vigorously check the size and weight of hand luggage bags. There are a few reasons why Ryanair are so methodical with this, which emphasises the meticulous management of costs and waste.
- Oversized luggage is much harder to fit in the overhead locker and slows down boarding times with customers queuing in the aisles
- Overweight luggage may present a health and safety risk, but it also uses more fuel and the cost of running the plane increases
- It discourages customers from selecting the wrong option at the booking stage, allowing the airline to plan more effectively
Seat allocation is another area of potential waste that Ryanair monetised. Typically, when customers are part of larger groups, they are slower to take their seats causing congestion within the aisles while boarding and also have a higher probability of leaving litter, increasing cleaning time. This is dead time within the turnaround time in the plane’s schedule. Ryanair’s solution is to pay for the “luxury” of sitting together and offset their waste by increasing revenues.
Conclusion
In conclusion, Ryanair has done an exceptional job of understanding and defining its primary customer journey. At each and every opportunity, they have identified potential waste and introduced an additional process step to reduce it or monetise it to help offset non-standard costs. While this has been a commercial success, their approach often results in perceived poor customer experience and satisfaction.
Although this approach may not be an appropriate or desired strategy for many organisations, it highlights the importance and value in understanding all of the intricate steps and waste points in a process.
For some organisations, eliminating waste points may involve streamlining processes and reducing unnecessary steps to improve efficiency. For others, it may mean identifying opportunities to add value for customers by offering personalised services or innovative solutions. Ultimately, the key is to align the utilisation of waste points with the specific goals and values of the organisation, ensuring that it enhances the customer experience and satisfaction rather than detracting from it. By understanding and leveraging these waste points effectively, organisations can not only offset non-standard costs but also create a competitive advantage in the market.
