Ryanair’s chief marketing officer Kenny Jacobs says it would need to get ‘very distracted’ expanding into leisure to dilute the brand and derail its attempt to become the “Amazon of travel”.
Chief executive Michael O’Leary made the comparison last week (27 September) to sum up how the airline will double annual profits to €2bn over the next six to eight years. Ryanair wants to “disentermediate the disintermdiators,” he told the Financial Times when it launches a site later this month that will take on services like Tripadvisor with offers like accommodation and concerts as well as flights.
“We will start with those services that we see as natural adjacencies to what we do today,” Jacobs told The Drum. Done successfully it will add revenue and profit, minimise the pressure on the airline and make it easier for consumers to shop in one place. However in offering more, Ryanair opens itself up to the danger of spreading itself too thin that could fail to define the brand’s purpose beyond making money.
“The Ryanair brand is so central to low cost air travel in Europe – we would need to get very distracted to dilute this brand equity,” Jacobs continued. “We have a very lean and focused approach here at Ryanair and we won’t, and Michael wouldn’t let us, get distracted from the core business of flying customers.”
Moving into the entertainment space doesn’t just pit Ryanair against Tripadvisor, it will be competing against other online travel agents, tour operators and small specialist providers. Ryanair already shuttles customers to these providers; therefore it’s only natural for an airline to want to cut out the middleman, as it is dealing with these fliers anyway. Indeed, the margins of experiences and tickets events can be higher than the yield of an airline seat.
“We will also look to work with partners and leverage their experience,” said Jacobs. “We will do a few at a time and won’t take on too many. We will also look to work with partners and leverage their experience.”
Could Ryanair ever be anything like Amazon? Possibly. Consumers don’t think of Ryanair as the place to find the individual parts to make the best holiday – be it flight, accommodation, transfers, experiences etc – and so it needs to make it sure it’s in prime position to offer these types of extras as there is no point booking concert tickets or football games if you can’t fly to the city or venue where it’s taking place.
“Ryanair however, isn’t a brand with a purpose, it’s a financial institution,” said Myles Ritson, chief executive of brand innovation consultancy Fusion Learning. “It has aggressively attacked other airlines by eliminating all unnecessary cost (like customer service) in order to win the price war.
“The travel industry is full of middle men who hide costs - from ticket touts to resort banana ride reps. So if Ryanair decided to rid the world of the bandits that steal your hard earned holiday money and bring transparency and choice to cut them out, they would actually have a real purpose.”
Digital will be key to shaping this purpose, specifically if Ryanair can elevate its mobile and data expertise. Both will inevitably be called on to power the website, with Jacobs eyeing events and activities at destinations, travel planning advice and travel utilities and retail linked to travel.
“If Ryanair simply puts ‘experiences’ live on the website, then it is simply competing in a mature space; by linking it all together, the combined proposition of flights, hotels and experiences becomes very powerful, particularly as travel has become increasingly fragmented,” said Chris Walmsley, founder and head of planning of creative agency Cubo.
“I think the element that will take some time to work out, is establishing what works brilliantly and what doesn’t. Some experiences will naturally carry a premium due to high demand, whilst others may not carry the cache for people to venture 600-1,000 miles to get to. Some experiences will require significant speed to market e.g. the announcement of Champions League knockout round, as fans will want to book within hours. All owned channels, SEM, advertising, partnerships etc. need to be activated quickly and as seamlessly and efficiently as possible.”
Branching out into new services will be tough but will be key for the airline’s hopes of growing its passenger numbers from 100 million this year to 160 million by 2023. Being the ‘Amazon of travel’ is more than just selling lots of stuff in addition o flights; today people don’t just care what you sell, but why and how, so being cheap but loathsome doesn’t pay.