UK Regulator Calls Ryanair on Its Funny Business

Michael O'Leary

 (Billypix)

It was only last week we wrote of how Michael O’Leary at Ryanair was flying high. In a lunch interview with the Financial Times, O’Leary did not seem fazed by anything out of the ordinary.

Now there’s a diversion.

Britain’s business regulator Office of Fair Trading has described Ryanair’s high credit card fee (£5, even though it reportedly only costs the carrier 30p) as “puerile” and “almost childish”, The Independent reports.

Coincidentally, this month Flightglobal publication Airline Business features O’Leary and Ryanair on the cover. (You can read the article, and O’Leary’s latest thoughts on a long-haul carrier, the future of Aer Lingus, and other matters here.)

In a corresponding editorial The Independent writes:

So the question, given that none of these charges are illegal, is whether the manner in which Ryanair conducts its business is anyone else’s concern. John Fingleton, the head of the Office of Fair Trading, suggests that it is.

[...]

This seems like a shot across the bows for the airline. The OFT is in the middle of an investigation into online prices and advertising, which could spell trouble for Ryanair when it reports later this year. The regulator has certainly shown itself willing to take on the airline in the past. In 2006 it forced Ryanair to alter its contract terms over lost baggage. And last year, the OFT secured an agreement from the airline to increase the clarity of its website and emails over the small print on promotional offers

Surcharges are gaining prominence, and not just with low-cost carriers. In October, Qantas won the dubious “Shonky” award for its “sky-high” surcharge on tickets purchased with a credit card: A$7.70 for each domestic passenger and A$25 for each international passenger.

What is Ryanair’s response? Well judging from the Independent it doesn’t have one:

Stephen McNamara, Ryanair’s head of communications, said: “As a general rule, anything that comes from an office that has chosen to ignore fuel surcharging airlines like British Airways and remained mute while London air passengers were being ripped off by the BAA monopoly should be taken with a pinch of salt.

“Ryanair is not for the overpaid John Fingletons of this world but for the everyday Joe Bloggs who opt for Ryanair’s guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 and £10.”

In the future, would McNamara have to modify his comment to “we give them the opportunity to fly across 26 European countries for free, £5 and £10, plus a £5 credit card fee, if applicable”? Hmm. Doesn’t have the same ring to it.

4 Responses to UK Regulator Calls Ryanair on Its Funny Business

  1. roman 4 January, 2010 at 4:45 pm #

    this is part of its PR strategy. The war of words that has begun with the OFT is another free way to make people talk about the company. And it works… Ryanair doesn’t want to lose any free advertising opportunities. This is also why the company is also doing its best to remain controversial!

  2. Will Horton 5 January, 2010 at 3:35 am #

    Hey Roman, thanks for your comment! I agree a lot of the tactics Ryanair engage in is with the intention to generate free PR. But this time it is the OFT starting the dialogue, and any ruling they issue could hamper Ryanair’s revenue stream from fees. That said, Ryanair is trying to spin this matter (look at the comment about how Ryanair has low fares).

  3. charlie f. kohn 26 January, 2010 at 4:53 pm #

    that strategy of free promotion without spending more than the coffee and bisquits for the press is one thing and imo can go undisputed. that doesn´t mean that i agree with it. on the contrary, i am entirely opposed to it. but well, not in any other way could FR/o´leary afford the money for that much publicity. and the press follows like a well trained dog without any comment…
    what is worse though, is the avalanche of court suites FR has thrown at BA and LH and others for matters obviously clearly business conform – and lost most. in those cases the effect was not double but triple: not only did FR accuse network carriers for bad practice and posted itself as the big saviour of the public but FR also prompted an amount of manpower and legal cost and in the end loosing most cases. the third effect: again the press followed suite to o´leary´s intentions.

    i am expecting the day when not only a few german consumer magazines are drumming up about the less than serious business practices of FR that show how little that “low cost airline” is worth its name. it must be called a “low service airline” and “no interest in customers airline”.

    saludos cordiales
    charlie.f.kohn@sixpence-pictures.ocm
    photography // design // madrid

  4. Will Horton 26 January, 2010 at 10:00 pm #

    Thanks for your reply, Charlie!

    A few years ago some news outlets instituted a news blackout on celebrities that were always coming to the forefront, even though they arguably offered little to society.

    Should there be a similar news blackout on Ryanair?

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