Comment: What now for Ryanair after failed attempt to cut out agents?

If Ryanair didn’t know how much it has the trade to thank for selling its seats it does now after last week’s aborted attempt to block third parties booking on its website.

As Travel Weekly revealed on Friday the Irish lowcost carrier, without warning, included an additional security level to its booking process aimed at thwarting dynamic packaging agents who screen scrape.

If industry rumours are correct and commentators on our original story are right, Ryanair lost 80% of business in the short period that the verification measure was live.

No wonder it disappeared so quickly.

Of course Ryanair’s distaste for travel agent business and attempts to block screen scraping are nothing new and it has fought and lost a number of court cases around Europe.

But with the airline clearly so reliant on agents, and conversely some big UK agents hugely reliant on Ryanair by up to 60% it is claimed, this particular battle looks set to run.

What the airline was banking on last week is that its customers, on realising that they were not able to book via their chosen travel intermediary, would immediately turn to the Ryanair website itself.

But that naively assumes that most people who buy dynamically packaged holidays are naturally drawn to Ryanair and are confident enough and savvy enough to go online and put together their own holiday from scratch.

The fact is most of this custom turns to agents because they want someone else to do the work for them and offer them a holiday for the lowest price possible.

It’s not like these holidaymakers are fantastically loyal Ryanair customers who have been forced to use an agent because they have tied up all the seat availability and best deals. No one would mistake Ryanair for an airline that particularly goes out of its way to inspire loyalty through its fantastic customer service.

The millions of people who are booking Ryanair flights through third parties are just as happy to fly with easyJet, or Monarch or Jet2 as long as the deal is right. Did someone at Ryanair really think it would be able to redirect this business to its own website by adding another annoying step in the booking process?

The estimated 30% of Ryanair’s business that comes through the trade costs the airline nothing in direct payments, so why is it so determined to cut off this flow of bookings?

In the past it’s all been about price for Ryanair. Chief executive Michael O’Leary has been hugely critical of agents who he believes drive up price but add little value. However in his most recent assessment of Ryanair’s trading O’Leary was happy to talk about increased average fares.

Why? Because an airline that has based its performance to date on growing volume by opening up new routes has to, at some point, start to make those routes more profitable to keep the City happy.

The largest airline in Europe has to start making more money to achieve growth. And who, if not agents, are capable of pushing up average selling prices? There’s only so far Ryanair can go in driving up the basket value by increasing charges for ancillaries or dreaming up ever more outrageous costs.

What Ryanair appears to have underestimated is that agents who are specialists in putting together packaged holidays do add value.

They have strong consumer brands and offer the consumer one place to come to to book their holiday and, increasingly, peace of mind that everything is taken care of and their money is safe.

Obviously this is not lost on airlines who have their own direct holiday offerings, like easyJet through its tie-up with Lowcost Holiday Group and British Airways’ holidays on
So following last week’s aborted experiment what price Ryanair moving to significantly improve its holiday offering, as easyJet has done?

Or could we see a softening of its stance on agents now it knows the degree to which it shares its customers with other travel companies? Given O’Leary’s past utterances on travel agents I wouldn’t hold your breath.

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.