LONDON – “Cost cutting” in this recession generally brings to mind job cuts, or at a push unusual methods such as British Airways’ request that staff work a month for free. Rarely, however, does a company take it out on its customers.
But, that’s a strategy being considered by iconoclastic Michael O’Leary, chief executive of Irish budget airline Ryanair. The company is considering chucking checked in luggage all-together, O’Leary said earlier this week at a press conference. It was the “next logical step” after the company has begun phasing out airport check-in completely, thus requiring all its customers to use the internet to verify that they’re flying and to get a seat assignment.
So, how would it work? According to Ryanair spokesman Daniel de Carvalho, it is fairly straightforward: Passengers could carry as much luggage as they like through security – subject to the specific requirements of individual airports – and would then drop all their bags but one outside the plane with a baggage assistant who will load them into the cargo bay.
According to de Carvalho, it won’t change much for Ryanair passengers. In the past three years since the airline started to charge for checking in baggage, the proportion of passengers opting for the service has fallen to 20% from 83%, according to the company. Ryanair flyers voluntarily (perhaps begrudgingly but at least through their choice of airline) travel light in order to lock in discounts.
Ryanair’s no-frills service has become iconic and O’Leary is playing it up. This is a strategy that has worked for other airlines in the past. JetBlue kept prices low by keeping labor costs down and flying limited routes. Before that, Southwest Airlines was among the first in the U.S. to eliminate hot food service, with its flight crews often mocking its modest fair as a classic “filet de peanut.” Southwest is a $4.7 billion company despite hard times for the airline industry.
Earlier this year, O’Leary suggested charging Ryanair passengers to use the lavatory, and Ryanair launched a campaign encouraging passengers to submit their thoughts on what the airline could begin charging for. No winners so far. Might be a good thing as some analysts think that Ryanair has crossed the line from quirkily cheap to low rent and flinty.
“They are heading toward the stage where they are in danger of alienating the consumer,” says Wyn Ellis, an aviation analyst at Numis Securities in London.
De Carvalho disagrees. “We had 59 million passengers last year and we are expecting 67 this year. What’s clear to us is that passengers are really willing to do a lot to spend as little on traveling as possible.”