Airlines and airports reject Ryanair passenger ownership claim

Bill Lumley

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Speakers at ARC 2010 defend the importance of ancillary revenues after comments by Ryanair COO Michael Cawley

The ownership of airline passengers was placed under intense debate among inflight duty-free practitioners this week. Around 260 delegates attending the Airline Retail Conference (ARC) 2010 heard Ryanair COO and deputy CEO Michael Cawley claim that his airline has full ownership of the customer from booking to landing back home from their trip.

His presentation exposed the main philosophy behind Ryanair’s commercial policies—cutting costs wherever possible and in increasingly creative ways. He said Ryanair’s growth was outstripping other European low-cost carriers and considerably higher than many of the beleaguered legacy carriers, and delivered a message to inflight retailers that the interests of operations other than his own were of low significance.

London Gatwick airport COO Mike Luddy responded to Cawley’s claim by stating: “All I have to say to that is, poor customers. I don’t think the passenger wants to be owned by Ryanair all the way through their journey. In fact, we all own the customer at different points in their journey through an airport and before they get on a plane.”

In the following presentation, Spanish low-cost airline Vueling CEO Alex Cruz said: “We have one thing in common with Ryanair, which is that we are absolutely dedicated to keeping our costs as low as possible. But that is not enough. We have differing customer profiles at different airports across Europe. We manage to offer such features as connecting flights without increasing our cost base and with the second best EBIDTA margin in Europe.

“Ancillary revenues are very important to us and grew by 21% in the last year,” he added. “The figure assumes only 50% of internet sales and Vueling is quite innovative in ancillary sales. We can relate to our customers many of them on a very intimate basis. And our customers are clearly willing to spend more money each year as we come up with new services and products. We are very interested in finding more ways of selling products and services during the overall travel experience. In particular there is more room for products that are technology-focused.”