Brand Health Check: Ryanair

O'Leary has reacted to the downturn in fortunes by embarking on yet another price war, with the rationale that the economic downturn will instigate a 'wave of bankruptcies' among Ryanair's competitors. The brand is also a standard-bearer for 'no-frills' flying, and charges for any products and services beyond the bare minimum, so fare increases would be hard to justify.

The travel landscape has become much more competitive than in the late-90s budget-airline heyday. Rail links between the UK and Europe have improved, for example, with Eurostar having won market share on the London-Paris and London-Brussels routes. Railteam, an alliance of high-speed rail operators, has also made inter-city train travel across the Continent simpler and cheaper.

While easyJet founder Stelios Haji-Ioannou has extended the easy brand in myriad directions, Ryanair has been more reticent. It has rolled out branded financial services with GE Capital Bank, and last year announced plans to launch a hybrid budget/business-class long-haul airline, RyanAtlantic, in 2009. However, the future of this venture is unknown.

O'Leary appears keen to continue his aggressive advertising strategy; estimates suggested that the brand's series of seven print ads banned by the ASA earlier this year generated as much as £700,000-worth of media coverage.

Nonetheless, with the airline referred to the Office of Fair Trading for persistently flouting advertising rules, Ryanair may have become too abrasive for its own good. We asked Paul Snudden, chief operating officer at responsibletravel.com, and Liana Dinghile, senior consultant at branding agency Dragon, if it is time to become more customer-friendly.

Diagnosis 1

Paul Snudden chief operating officer, Responsibletravel.com

The expectation may be that there is nothing good to say about any of the leading low-cost airlines, which have done so much to increase air travel and hence CO2 emissions. But not so.

On some levels, there is much to admire about a brand that has been the people's champion for low-cost travel.

It has done much to help cultural understanding among ordinary Europeans and drive the economies of many less well-known, emerging destinations, as well as campaigning so effectively for its cause, even if it has made a lot of enemies in the process.

However, the question now is whether the brand is Michael O'Leary or Ryanair. The confrontational style and seeming lack of consideration for customers embodied by O'Leary is in danger of becoming inextricably linked to the brand, which will drive passengers away in the longer term unless the airline can continue to maintain a price advantage. Is this partly what lies behind the decision to abandon profitability this year and reduce prices by 5%?

Remedy

• Begin the slow process of divorcing the airline from the O'Leary brand.
• Maintain the absolute drive to be known as the lowest-cost option - it is the only advantage on competitive routes.
• Accentuate achievements and adopt a less combative style to the customer base.
• Be more transparent about the environ-mental impact of flying and communicate more effectively with consumers about the steps being taken to reduce this.

Diagnosis 2

Liana Dinghile, senior consultant, Dragon

Often we suggest that a client's brand embodies its reputation. In the case of Ryanair, is its reputation good enough - or, by its own preference, bad enough - to weather the current climate?

The airline has led the low-cost era as much by attitude as volume. As fuel costs continue to escalate and budgets pull tighter, however, low-cost flying simply doesn't exist as a reality. Indeed, even when fares are kept down, it seems the so-called 'optionals' go up.

The new reality is 'lower cost', which doesn't fit the established aggression of the brand; nor do price guarantee models fit where they aren't trusted by consumers.

Ryanair's real decision now may be to either become a brand or remain a 'reaction'. Such a PR-hungry brand - or individual, here - willingly puts itself up for scrutiny. The risk of exposure is high and any announcement will be met with cynicism. The airline may not care, but customers do - even more so when times are tough. What can Ryanair do to make them care enough to book? Price cuts may be the unsustainable option.

Remedy

• Start with some honesty about the brand and offering, rather than provoking others.
• Lower-cost travel, if it truly stays that way, will still be attractive, but only if consumers trust the reality.
• Mature as a brand. It is time to become an airline brand rather than a chief executive's soapbox. Virgin, for example, is still associated with Sir Richard Branson, but the brand also lives on its own, translating his vision in ways relevant to consumers.