Is Ryanair starting to mind its manners?

A long-term shift in the industry could explain why Michael O'Leary's notoriously cavalier attitude toward his own customers is mellowing.

Good manners cost nothing but Michael O’Leary, the chief executive of the budget airline Ryanair, is an expert at putting a price on things people never expected to pay for. Customers who fail to print boarding passes are charged £70, checking in a bag at the airport can cost £100 and the airline periodically moots the idea of charging passengers to use the loos.

Ryanair ticket sales have historically proved immune to O’Leary’s lack of charm, and his boast that “short of committing murder, negative publicity sells more seats than positive publicity” appears irritatingly accurate. In June 2013, the International Air Transport Association reported that more than 80 million people flew Ryanair in 2012, nearly 30 million more than Lufthansa, the second most popular airline.

This makes O’Leary’s recent about-turn all the more intriguing, because he has announced a raft of concessions to make flying Ryanair a bit less unpleasant. The airline is increasing passengers’ carry-on allowance, decreasing penalty charges and giving customers a 24-hour “cooling-off” period during which they can correct mistakes to their booking. Passengers on early-morning or evening flights will no longer be subjected to headacheinducing public announcements urging them to buy e-cigarettes and scratch cards, or a grating fanfare every time their flight lands on time.

One possible explanation for O’Leary’s mellowing attitude is that Ryanair issued a warning that it might not meet its £480m profit target this year. Ryanair blamed the weakness of the European economies and price-cutting by rivals – but it could also point to a long-term shift in the industry. The gap between low-cost and legacy carriers is shrinking. Low-cost airlines were intended to appeal to holidaymakers on a budget but, having crowded out established carriers on some short-haul European routes, they are increasingly being used by cost-conscious business travellers, too.

Ryanair’s main rival, easyJet, has already introduced a series of measures to attract business passengers. Meanwhile, the low-cost airlines are expanding into markets still dominated by the conventional carriers. October brought the maiden international flight for Africa’s first low-cost airline, Fastjet. The same month, Norwegian Air Shuttle, the world’s fastest-growing budget airline, signalled an expansion into long-haul travel by unveiling plans for a flight from London to New York which will cost £149 one-way. On short-haul flights, where legacy airlines are at a comparative disadvantage, some carriers have tried to emulate their budget rivals. Aer Lingus and Iberia no longer provide free food and drinks on some routes.

In many ways, these changes were inevitable once air travel became a more accessible and, by extension, less luxurious mode of transport. In the early days of low-cost flying, passengers might have been willing to put up with rude treatment for Ryanair’s hugely popular £1 flights, but in a more competitive market O’Leary may be learning slowly that bad manners can be costly.

Has Michael O'Leary learned his lesson? Image: Rex Features

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 30 October 2013 issue of the New Statesman, Should you bother to vote?

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired Battersea power station in 2012. Initially, it promised to build 636 affordable units. This was pretty meagre, but with four developers already having failed to develop the site, it was still enough for Wandsworth council to give planning consent. By the time I wrote Up In Smoke, this had been reduced to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls.

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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