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Is Ryanair's customer focus paying off?

Monday, February 03, 2014 - 01:40

Feb. 2 - Ryanair reports strong forward bookings and an easing of intense price competition among European airlines, raising hopes it can quickly regain height with a new customer-friendly image after a profit warning spooked markets last year. Hayley Platt reports

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It invented the no frills airline, making its name as the lowest of the low-cost carriers. But now Ryanair is changing course. After being voted the worst of the 100 biggest brands by a UK consumer magazine last year. The company promised to change its culture and improve customer service. A move IG's Brenda Kelly says investors seem to like. SOUNDBITE: Brenda Kelly, Market Analyst, IG, saying (English): "I think by addressing that particular problem, by changing it up in terms of the seat allocations, driving it towards the business class customers as well. And I also think that having Michael O'Leary step back from the PR job to a certain extent will probably be all for the good of the share price." Shares opened 6 percent higher - despite the Irish airline reporting its biggest quarterly loss in five years. It blamed the fall in profit on heavy discounting - average fares were 8% lower, leading to a 35 million euro loss for the quarter. A weak pound also hit trading. The company said the improvements to its customer service were beginning to pay off. Forward bookings were 6 percent higher than the previous year. But Chris Hughes from Reuters Breakingviews isn't convinced Ryanair have done enough. SOUNDBITE: Chris Hughes, Editor, Reuters Breakingviews, saying (English): "You don't have the evidence yet that it's going to work, it's a viciously competitive industry. The shares have come up an awful lot. The shares trading on a comparable valuation to easyJet who Ryanair is now trying to emulate but you know it still has to deliver." Michael O'Leary has been the public face of Ryanair for almost 20 years. But he's decided to step back from the spotlight. Still, the company isn't holding back on its marketing budget. That's set to triple to 35 million euros this year.

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Is Ryanair's customer focus paying off?

Monday, February 03, 2014 - 01:40