Your Task You have recently secured a graduate role with top management consultant. The company has just acquired a new client, which they would like you to work with. The new client is Ryanair low cost airline, the company has been criticise for bad customer service for a number of years and they are looking to change the consumer’s perception of the brand. You should demonstrate an exceptional knowledge of customer management theory and models including extensive reading around the subject in the relevant business management and academic journals. Equally important will be an understanding of how to put theoretical plans into practice. This means acquiring an excellent understanding of all aspects of airline and travel industry operations. To succeed in your first assignment please complete a written report outlining how RYANAIR can best engage with and manage their customer to become even more profitable. Company Background The Ryanair fleet Ryanair operate a fleet of over 300 Boeing 737-800 aircraft with an average age of 5.5 years. They have another 183 Boeing 737-800 on order and with an option for 100 Boeing 737 MAX 200. Ryanair estimate that by 2024 they will have over 520 aircraft in operation, (Ryanair, 2017).

• Airline type: Low-cost/budget/no-frills
• Distances flown: Medium- and short-haul
• Passenger uplift: 117 million, up 15.4% on 2015. In the financial year to 31 March 2017, it carried 120 million passengers, up 13% on the year to 31 March 2016
• Revenue: €6.6 billion in the year to 31 March 2017, up 2% on the year to 31 March 2016
• Profit after tax: €1.3 billion in the year to 31 March 2017, up 6% on the year to 31 March 2016
• Load factor: 94%.

According to Ryanair, average fares fell by 13% to €41 in the year to 31 March 2017. The budget carrier also expanded, taking delivery of 52 new Boeing 737s. By March 2018, Ryanair hopes to grow its fleet to 427 aircraft, to reach its target of 130 million customers. Last year it launched 206 new routes, and opened 10 new bases at primary airports in Bucharest, Corfu, Frankfurt Main, Hamburg, Ibiza, Nuremburg, Prague, Sofia, Timisoara and Vilnius. The airline is currently intohalf way its ‘Always Getting Better’ (AGB) campaign, aimed at improving the public’s perception of the brand. As part of the AGB campaign, it began selling long-haul flights from Madrid with Air Europa.   In the past, the airline has expressed a desire to become the “Amazon of Travel”, by developing better search tools, travel guides, and express booking, auto check-in and onward transport partnerships.   Ryanair also intends to extend its Ryanair Holidays to new markets; Ryanair Holidays allows consumers to book packaged holidays, comprised of flights and accommodation, along with other extras like all-inclusive, half-board, car hire etc. Ryanair continues to use its Ryanair Labs to develop and transform the customer experience. In turn, it hopes to boost ancillary revenues by making it easier for customers to add on extra services like reserve seating etc. According to Ryanair, its website is Europe’s most visited travel website with over 50 million views a month. The company says that its Labs aims to develop more functional software by focusing on UX (user experience) and design, and uses various forms of data analytics, including Big Data technologies, Predicative Analytics and Machine Learning to improve its technological ecosystem.

The Brand Perception

British Airways and Virgin Atlantic brands associated with high quality, whilst Ryanair is associated with low trust (Mintel, 2017)

Brand personality: Low-cost carrier EasyJet seen as most accessible brand, while Ryanair viewed in a negative light, (Mintel, 2017)   Ryanair’s Reputation   The Ryanair brand has the worst reputation out of all selected airlines. Just 59% say they would recommend it to a friend. By comparison, 76% said they would recommend budget rival easyJet. While Ryanair’s main positive trait is value, its brand is also perceived as unappealing and boring.   However, despite the broadly negative connotations, its global passenger uplift in 2016 was nearly twice as large as easyJet; in 2016 Ryanair carried 117 million passengers compared to EasyJet’s 63.3 million. Indeed, it carried more passengers than easyJet and British Airways combined. This is perhaps the best example of how air travel has become a commoditised product and how low base fares drive mass-market bookings. Having said that in the last three years the company have focused on improving its image with launch of ‘Always Getting Better’ programme in 2014. This campaign aims to improve the airline’s negative image with a range of customer service improvements and digital enhancements like a new website and app, new uniforms, cabin interiors, allocated seating, and new business, leisure and family products.   The recent issues the company had Ryanair came under scrutiny after announcing earlier in September that it would scrap 18,000 flights on 34 routes between November 2017 and March 2018, affecting nearly 400,000 passengers. The statement came a week after a first wave of cancellationswas announced, (Guardian, 2017).   According to the BBC (2017) Ryanair customers have today branded the budget airline a 'disgrace' after being forced to spend up to £1,500 of their own money on new flights to get home - with some even having to pay twice.   Please visit this link for information about the customer reviews of Ryanair: http://www.independent.co.uk/travel/news-and-advice/ryanair-easyjet-worst-airlines-in-world-new-rankings-research-airhelp-quality-service-delay-a7791151.html     Report Structure    

1       Introduction (200 words maximum)

Explain very briefly the  

1. Context, i.e. your report has been prepared for RYANAIR, a leading LCC (low cost carrier)

 

3. Outline the structure/content of the report3.1

 

2   Develop an appropriate value proposition for RYANAIR (approx. 350 words)

Advise them on an appropriate customer value proposition This should clearly identify

1. The main elementsof their current value proposition and indicate whether this is alignment with customer needs or not.

 

1. A proposed new value proposition which is alignment with customer needs

    Advice Note:  Before making recommendations for a new value proposition you should carefully study the VPs of other leading LCCs in Europe, North America, Asia and companies involved in the transportation businessas part   of your research to advise Ryanair how they can provide value to the customer whilst maintaining their position as a leading LCC.

3         Using the SCHEMA data spread sheet(350 words)

  We cannot provide any data on customer value segments (e.g. quintile or decile analysis) for confidentiality reasons.  Instead you should use the EXCEL spreadsheet Schema  data on BB to demonstrate and explain how you can increase the value of this fictitious customer base. This data is merely used to enable you to demonstrate your understanding of customer value.   You should also indicate realistic time frame over which your increase in value will take place. For example is it one year or two years?   There is enough data for you to write 3,000 to 5,000, however Michael O’Leary doesn’t have time to read longwinded reports and want you to demonstrate you understand how to increase customer value on 350 words.  

3.1      Using one or two element of REAP factors; suggest how Ryanair could increase profitability from customers. Also use other relevant frameworks or models such as customer pyramid by J Curry to support your recommendations.

 

4       How could Ryanair provide an outstanding customer experience?  (350 words)

  Using one or more customer experience models suggests how Ryanair as a LCC could provide an outstanding customer experience.Think about the social CRM as well.

5       Conclusions (250 words maximum)

Provide a brief and concise conclusion that will persuade RYANAIR to accept your report in full.