The Customer Service Survey
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Nice Going: RyanAir Intentionally Disrupts Thousands of Travel Plans
Friday - August 08, 2008 02:27 PM in
by Peter Leppik
Ultra-cheap European airline RyanAir has apparently had a longstanding feud with third party websites which sell plane tickets. RyanAir wants everyone to book their tickets through its own website, so RyanAir can try to sell higher margin services like hotel rooms, rental cars, etc. Their business model is apparently to sell the plane tickets as a deep loss leader, then make it up by selling other stuff to passengers.
The latest move by RyanAir is to cancel all plane tickets booked through third party websites, refunding the airfares to the websites (and forcing the websites to figure out how to process the thousands of individual refunds). One estimate is that this amounts to tens of thousands of tickets, and in the words of RyanAir's CEO, "We want to cause as much chaos for the [websites] as possible."
Apparently the third-party sales of RyanAir tickets are perfectly legal and there's nothing RyanAir can do (legally or technically) to stop them. On the other hand, RyanAir has built a business model which depends on having complete control of the customer transaction, and without the upsale opportunities the company loses money on every ticket sold.
I'm not sure what to make of this dispute (other than to say it is likely to be very entertaining for those of us not planning any travel on RyanAir). I have a hard time seeing how this will help the airline in the long-term or short-term. Even though RyanAir already has a reputation as the ultimate no-frills (i.e. miserable) flying experience, arbitrarily canceling the travel plans of tens of thousands of customers as a way to punish the third-party websites seems little short of suicidal. It's never a good reason to drag innocent third parties into a commercial dispute, especially when those third parties are your customers.
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