The Beat Letters: Is Ryanair Brilliant or Barking Mad?

It raised the same haunting question which I have considered with every one of his past rabid outbursts, which is: is he brilliant or is he bonkers? 

On the plus side, I suspect he is a multi-millionaire who runs a successful airline which increases in popularity with every blunt denouncement he makes. Sounds sane and sensible to me. On the minus side, he seems to have failed totally to understand the business travel market and seems hell-bent on alienating the key players and customers in it.

Now this possibly may not matter, as I suspect less than 3 percent of his market is business travel, unlike easyJet which is well into the teens. But this lack of savvy might cause a change in financial market perception, especially as Ryanair's share growth bubble is beginning to look vulnerable. His current almost laughable and ill-informed approach could prove to be a sharp pin the longer it goes on.

So what's his problem? It is quite simple really. He seems to think that TMCs use screen scrapers to find a fiendish way to make more money out of Ryanair flights through mark-ups. This is crazy and shows a painful lack of understanding in the travel management market. Any TMC that presented a Ryanair fare that was higher than Ryanair's Web site is asking for trouble as customers are always comparing. What TMCs do, like with every other transaction, is add their own fee which is shown separately to the fare, so O'Leary's argument is deeply flawed and I think hides another motive. What he really wants is for the travelers themselves to book directly with Ryanair. Why? Because then they are exposed either directly to premium phone lines or online to what he is desperate to sell, which is ancillary services like insurance, hotels, car hire, etc. Nice one, Michael, but it happens to fly right into the face of what most corporates want, which is management information, control, tracking, policy compliance, et al. Perish the thought, but maybe he should take the same approach as his sworn foe easyJet, which has needed to recognize the corporates to the point of making itself available on the global distribution system. In saying that, easyJet has been a touch naughty by charging a mark-up for such bookings well in excess of the GDS cost--thus turning such "benevolence" to the business traveler into a money spinner.

Where are we now? Well, Michael is still ranting and complaining to everyone he can find from the European Commission to the tabloid papers. TMCs are scratching their heads, thinking, "What is this guy on? All we want to do is give him passengers in a way that is efficient to our corporate customers." And me? I still don't know if he is brilliant or barking! But I do know he could well be dangerous and destabilizing, even if he has a minimal percentage of the market.