The Low-cost Revolution

Ryanair’s Crisis Shows the True Price of the Low-cost Revolution - The Guardian

Excerpt from The Guardian

Ryanair chief executive Michael O’Leary, in his cheerfully blunt way, frequently used to assert that the only customer service that really counted was getting passengers to their destination on time and for the cheapest fare. That definition appeared to have softened when in 2013 it promised to be nicer to its customers: a bit more leeway with the bags, smaller fines for a lost boarding pass. Why not, O’Leary mused, stop “unnecessarily pissing people off”. Yet now, by whatever standard, customers are ill-served: thousands of flights cancelled, more than 700,000 passengers disrupted, and now a belated, grudging acknowledgment of statutory compensation rights.

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The Irish airline, with typical bravado, put it down to a management cock-up: messing up the rotas, not paying attention to the piffling rules, and suddenly finding itself short of pilots for a few thousand flights. D’oh! But that show of transparency shouldn’t persuade anyone that this is an aberration rather than a symptom, a visible culmination of the logic of low-cost economics.

Ryanair is a highly efficient business in an industry whose dominant vision is – in a phrase coined by the government’s airline commission – that “low-cost is king”. O’Leary, who keeps racehorses in his spare time, has bred and trained a generation of passengers to pay and expect little. Airline bosses have long talked about “unbundling the product”: the process that starts when a customer discovers a startlingly cheap fare on the internet, only to watch it double when adding baggage fees, paying a fiver to guarantee a seat, and so on. The components of the flight are effectively disassembled, and the headline price falls, but it will cost you ¤3 for a sip of water onboard.

Unbundling has become part of our world, and not just when we fly. It shows up in a host of what are billed as consumer choices, and increasingly in what were once public services. Utilities firms offer price bonuses to those able-bodied and affluent enough to read their own meter and pay upfront; in some areas, you have to pay for parts of the council recycling service.

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