Ryan Air

OPD Project

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October 2013 saw Ryanair announce that they were planning to make a number of improvements to its “industry leading customer service” over a six month period. Some of these improvements as set out in Ryanair’s Customer Service Improvements video (2013) include

New website and improved booking process. A second free carry-on bag can be taken on board by passengers. Quiet flights. Boarding card reissue fee cut Allocated seating. Improved family and business services. 24 hour grace period for ticket altercations. “My Ryanair” passenger registration service.

Ryanair has admitted that in the past the company has been caught up in its quest to be operationally efficient while in the meantime the company has neglected its customer service (Searle 2014).

Before Ryanair announced it would be improving its customer service operations the company’s Key performance objectives where aimed at cost, speed and dependability with flexibility and quality being neglected to a certain extent. Examples of the airline’s operations with regards to the performance objectives previous to changes being made include…

Cost: The airline has paid a lot of attention to efficiency in order to minimize costs and offer customers lower prices than other rival airlines.

Speed: Turnaround times for planes, luggage handling etc. are done as quickly as possible as these elements if done at a slow pace can push up the airlines costs.

Dependability: Ryanair’s punctuality is also impressive compared to rival airlines as-well as the reliability of its luggage service (su-bc, 2010).

Quality: In the past Ryanair has been heavily criticised for its poor customer service standards! The airline put no emphasis on the customers Ryanair experience instead concentrating on efficiency of the operation.

Flexibility: Ryanair’s obsession with keeping costs low meant the airline offered limited flexibility to its customers. If Ryanair where to increase their flexibility it would mean offering their customers more options and provide a more unique customer experience (Beata’s Blog, 2010).

Ryanair’s corporate strategy is still to be Europe’s leading low cost airline (Ryanair, 2014). However in September 2013 the company issued a profit warning as the company’s share price nose-dived and the company, this profit warning is what prompted Ryanair to make these operational changes (Neville, 2014).After reviewing the changes mentioned above it is clear that the companies new initiatives are pointing them in a different direction, I now feel Ryanair are striving to become more customer centric. The incoming customer service improvements as shown above show that Ryanair will be focusing its attention in order to meet Quality and Flexibility as its key performance objectives.

As the operations manager of Ryanair it is clear to see from the examples below that the operational improvements which are being implemented are allowing the airline to meet these key performance objectives.

New user friendly website and improved booking process

As part of the company’s new operations they have redesigned their website in order to make it more user friendly. The old website was heavily criticised for its poor design and the number of requests it made to passengers to buy add-ons when they were in the process of booking their flight (Bohan, 2013). As part of the operations improvement Ryanair hired 50 new I.T specialists for the re-design process, a new efficient booking system also means it is now possible for passengers to book a flight with five easy online steps where before it was seventeen (Kennedy, 2013). I feel the improvements to the website and booking system enhances the quality of the service and reduces the strain that a passenger may of felt when trying to book a flight using the previous system.

Boarding card reissue fee cut

Michael O’Leary was once famously quoted as saying with regards to passengers who had forgotten their boarding passes “We think they should pay 60 euro for being so stupid” (Hogan, 2013). Before this operational change the cost of having your boarding card reissued was in-fact 70 euro, however this has now been cut to 15 euro. This service has been implemented so that it can only be availed by people who have checked in online, if a customer has not checked in online they will still be required to pay the 70 euro airport check in fee. This new improvement can also be seen as Ryanair trying to implement their new digital strategy (Breaking news.ie, 2013). Again I feel that like the 24 hour grace period this operational improvement will help strengthen Ryanair’s brand image among its customers and will definitely strengthen its level of quality in regards to customer care as well as the added flexibility customers will now feel have as the price will be much more affordable for most people creating greater customer satisfaction.

Quiet flights

The introduction of quiet flights will see flights which take place between the hours of 9pm and 8am. Flights taking place during this time will have no unnecessary announcements (essential safety info only). The lights inside the plane will be dimmed throughout the whole flight to allow for a more comfortable sleeping environment, the cabin crew will also be informed that they are not to make any sales or disturb any of the passengers throughout the flight unless they are requested to or in the case of an emergency (Ware, 2013). I think that this operational improvement will help Ryanair achieve the level of flexibility the company needs to achieve. Quiet flights lie in the products and services flexibility bracket and I think the service will especially appeal to frequent fliers such as business people who will be able to catch up on their sleep or prepare for meetings in without being disturbed

Challenges/risks to the operations success

If Ryanair fail to meet these performance objectives I feel that their profits will continue to decline in the future. As already stated above the company received its first profit warning in September of last year and then received a second two months later. The company has also predicted a 90 million loss for the second half of the year with airline fares falling by a total 9% for this year (Topham, 2013) Even though Ryan air carried over 81 million passengers the falling air fares means that the companies returns are reflecting the reduced prices which they are having to offer. Michael O’Leary has blamed the falling prices on increased competition from other airlines in the U.K and other countries as well as the weak exchange rate between sterling and the euro (Thomas, 2013). A competitive price structure will only get you so far in business, and as Ryanair have just realised, not as many customers will want to use a service if the quality is of a poor standard (su-bc, 2010).

Over the past couple of years the airline experienced a lot of growth. This was mainly down to the economic downturn which meant people where more concerned about saving money then quality when it came to flying. However with economic conditions improving consumers are now willing to spend more in order to gain a better service, one airline customer was quoted as saying “I now prefer to pay the extra 50 euro for my flight and be treated like a human being” (BBC, 2013). In a recent survey taken customers were asked to rate the customer service provided by 100 different companies, out of 5 stars Ryanair scored 2. This meant they ranked as the worst company out of all which were rated (Smith, 2013).

I feel that Ryanair face the risk of continued falling profits and customer dissatisfaction if they fail to meet the key performance objectives I have set out. These two risks will hurt both the annual revenue of the company and also its brand. I think that increased competition and expectations in the market mean that Ryan airs previous strategy of being a “no frills low cost” airline and begin to excel in the areas which were previously neglected.

Personal operation improvement recommendation

My recommendation for the next operational improvement which Ryanair would be implementing a self-boarding service at their gates. White (2012) promotes the idea of self- service technology in airports. There are already self- service kiosks in most airports now where passengers can now print off their own boarding passes eliminating the need to stand in line and speak to a ticket agent. McCue (2006) explains that the idea of self-service boarding was first trialled back in 2006, the idea initially involved the passenger scanning there passport and fingerprint at the self-service check in kiosk before receiving their boarding card, the passengers finger would then be scanned again at the automatic boarding gates and if both fingerprints matched up the passenger would then be free to pass through and ready to board the plane. Some airlines have already installed the new operation and Bender (2012) reports that unlike the original design described by McCue (2006) there is no fingerprint scanning involved instead turn style type gates are put at the gate and the passenger will scan their boarding card in order to proceed to the plane. Lufthansa has been the pioneer since the first instillation of the gates 8 years ago with gates currently installed in airports such as Munich and Frankfurt. Incheon International airport in South Korea are advocates of the operation, there gates however are designed by IIAC as opposed to Lufthansa and are currently in the process of moving into more advanced bio-metric technology which will incorporate facial recognition into the operation with an estimated boarding time of 13 seconds (Ghee, 2011). I feel that this operations improvement would benefit Ryanair as it would allow for a quicker more efficient boarding process which would not only improve the quality of the service being provided to the passengers by reducing the waiting time dramatically but also adding to the speed of the overall service which will help the company to further drive down costs.

Of course not all concepts which are generated will necessarily be capable of further development into the service. Concept screening is used by companies to evaluate concepts under the criteria of feasibility, acceptability and the vulnerability of implement the design (Slack, 2013).

Feasibility

Ryanair have the financial capability to implement the operation improvement, even with a drop in profits the company still has a turnover of over 500 million euro.

Implementation of the service will be outsourced to one of the companies mentioned above which means Ryanair will not have to worry about anything technical involved.

Acceptability

The service will improve Ryanair’s customer service further. Will improve the airlines efficiency in terms of boarding passengers onto the plane and will

reduce both time and resources. The increased levels of efficiency will help the airline drive down its costs which in turn will

increase the company’s overall revenue.

Vulnerability

Initial costs to install the new operation may be expensive. Passengers may prefer face to face interaction with a staff member before boarding the

plane and may be put off at first.

The machines may breakdown which could cause delays

I believe after carrying out the concept screening stage on the recommendation that it would benefit Ryanair in their bid to compete on a more customer-centric basis with other airlines as well as enhancing their overall operations and keeping costs down.

Recommended design of new operational improvement

In terms of the design of the operations for this improvement, Ryanair will be implementing what is known as customer processing technology. Ryanair is a high volume service and will benefit greatly from this new operation as it will allow them to process or serve more customers at a more efficient level. How operations managers deal with process technology is now one of the most important decisions which shape the capabilities of an operation. As part of the design process with regards to technology it is vital that operations managers can do three things

1. Understand the process technology and what it does.2. Evaluate the process technology and how it affects the operations.3. Implement the process technology as smoothly as possible.

An example of an industry which has also benefited from process technology is the milking of cows. The implementation of this technology has helped reduce the workload of farmers and increase productivity. Although the airline industry and the milking industry are very different we can identify that the design of these operational improvements both reduces the workload for humans and also improves efficiency of the operation (Slack, 2013).

Customer processing technology will provide Ryanair with an acceptable level of service for its passengers while reducing costs helping the airline to control its flow of passengers to a greater standard and enhancing their new customer service operations.

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slack 2013

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