While most of us are more familiar with Ryanair CEO Michael O’Leary’s maverick antics such as storming a rival’s headquarters with a WWII battle tank at the height of the Gulf War, few in this country realise that the low-cost airline is not only one of Ireland’s best business exports but is one of the best-known brands on the internet.
For a company that prides itself on its financial expediency (such as banning ‘post it’ notes and highlighter pens among executives), its decision to invest €1.85m in a new internet backbone is clearly not a light one. The company openly brags that its website, which attracts 700 million hits a month, was designed in 2000 by two students for less than €12,000.
This week the company signed a three-year contract worth €1.85m with telecoms carrier Cable & Wireless (C&W) to upgrade the company’s core communications network to a high-performance internet protocol (IP) virtual private network (VPN) with quality of service to accommodate its growing passenger base – 95pc of whom book and pay for their tickets online. The upgrade will allow the airliner to better handle the increased levels of traffic from customers logging onto its website as well as make essential flight operational information readily available to pilots and engineers at all European locations. C&W’s account manager, Feargal McDonnell, says that the new network will be spread across 15 locations in Ireland, the UK, Germany, Belgium, Italy and Sweden.
According to Ryanair’s communications manager, John Rowley, the company last year carried 11 million passengers, a number it expects to more than double to 24 million by next year. “By 2007, we want to be able to carry 50 million people and our internet transaction engine needs to have the bandwidth to support that,” he explains.
When Ryanair embarked on its internet strategy in 2000, within its first three months it was taking €50,000 worth of bookings a week. With a current 95pc of bookings coming from the internet, the company in its most recent financial results posted a 53pc growth to record pre-tax profits of €265m. “We plan to carry 24 million people within a year, so that will mean carrying 50,000 people a day, and almost all of them will have booked their tickets on our website. If we meet our target of carrying 50 million people by 2007, that will see us carry 150,000 people every day. We will need our website to be strong enough to handle these huge numbers,” Rowley says.
“In 2002, we were ranked as the seventh most sought-after brand by Google. Between Ireland and the UK, there are 60,000 searches a day on Google for Ryanair. When somebody thinks of European travel, we want their next thought to be www.ryanair.com,” Rowley states.
Ryanair’s aspiration to become one of the biggest internet travel brands in the world bucks the crash-and-burn trend of most dotcom enterprises by focusing instead on thrift. The policy appears to be working. Bible of the internet generation Wired magazine recently ranked Ryanair at No. 30 among the top 40 most-wired companies re-shaping the world’s economy.
It’s a policy-based on thrift and zeal rather than excess, says Rowley: “Ryanair approaches technology with two questions in mind: can this save us money or can we make money with it? We achieve a low-cost approach to technology by focusing on maintaining a standard configuration and keeping everything simple. We do not develop our own software – all software for operations is off-the-shelf solutions. All our ancillary revenues (car hire, hotels and travel insurance) are all handled by third parties. Ancillary revenues account for 15pc of our revenues. Flight bookings account for 85pc of revenues.
“We use traditional techniques to market our web: poster and newspaper advertising. We don’t get involved in search engine marketing or online advertising. Our philosophy is simple: ‘Give them low fares and they will come.’ One interesting spin off is that we can measure the success of our promotions in real time – we can watch and monitor the transaction spikes when we do discounted promotions such as two million free seats.
“The website consists of the booking engine and the content site. The content site is primarily a communications tool: promoting the low fares and special offers (news releases and homepage graphics etc), our customer service information (such as punctuality, FAQs, destination guide and terms and conditions) and investor information (passenger traffic etc),” Rowley explains.
It is clear that while most companies view the internet in terms of strategy, the airline makes daily tactical use of the web to win business and influence the market. “The site changes every day and allows us to target our special offers in a tactical manner aimed at winning business. We carry more than 150 special offers at any one time,” he says. A recent promotional manoeuvre saw a video file of Michael O’Leary berating Taoiseach Bertie Ahern about the proposed second terminal at Dublin Airport based on a TV ad that was downloaded from the front page of Ryanair’s website more than 7,000 times.
While Ryanair has been effective at e-commerce, the notion of e-business within the company is seen as onerous. “We cut costs everywhere,” says Rowley. However, one extra area that the internet does power within Ryanair is the co-ordination of the operational and engineering elements of the airliner’s pan-European fleet of aircraft.
“That’s why this new network will be vital. If we are going to move up to 50 million passengers, it will mean more planes and busier routes. We have to turn our planes around quickly, so our maintenance engineers use the web to co-ordinate parts, rosters and engineering manuals. We turn planes around in 25 minutes and that allows us to do two extra flights per plane every day. “If the network isn’t up and running, then the planes won’t be up and running,” Rowley adds.
By John Kennedy
Pictured at the announcement of Ryanair’s three-year contract with Cable & Wireless were, from left, Feargal McDonnell, account manager C&W; Howard Miller, deputy chief executive, Ryanair; and Gareth Murphy, customer director, C&W