Ryanair Holdings Plc risks reviving its reputation for slack customer service with a move to scrap hundreds of flights through the end of October because of poor planning amid aggressive expansion. The cancellations could leave hundreds of thousands of passengers in the lurch, undermining efforts by Europe’s biggest discount airline to improve its image and woo more lucrative customers. Ryanair began its Always Getting Better program in 2014 to make flying with the no-frills carrier less onerous, introducing faster boarding for business travelers, discounts for children and sleeker aircraft cabins. “It is the potential for long-term damage that concerns us,” Damian Brewer, an analyst with RBC Capital Markets, said Monday in a note to clients.
While the scrapped flights account for only about 2 percent of normal daily operations, the cause was avoidable and stems from the company’s aggressive management style. As it ramped up capacity, Ryanair overscheduled its crews, which has led to a vacation backlog as it scrambles to meet holiday requirements by Irish authorities.
“We were trying to give too many pilots blocks of four weeks leave,” said O’Leary. “We have mismanaged that process.”
Image-Improvement Project
The fiasco undermines O’Leary’s efforts to improve Ryanair’s image and woo more lucrative customers. Ryanair began its Always Getting Better program in 2014 to make flying with the no-frills carrier less onerous, introducing faster boarding for business travelers, discounts for children and sleeker aircraft cabins.
“It is the potential for long-term damage that concerns us,” Damian Brewer, an analyst with RBC Capital Markets, said Monday in a note to clients. “The poor PR could deter future bookings and may well put off more time-sensitive higher yielding demand, like business trips, if the carrier is seen as unreliable and less punctual.”
Ryanair shares dropped 1.9 percent to 16.76 euros as of 2:04 p.m. in Dublin. That pared the stock’s gains this year to 16 percent, valuing the company at 19.9 billion euros ($23.8 billion).
The budget carrier plans to release the full list of affected flights by Tuesday. The company worried millions of customers by announcing on Friday that it expects to cancel 40 to 50 flights a day for the coming six weeks. Some 162 flights were dropped between Saturday and Sunday, with another 164 due to be cut through Wednesday.
97% Full
Ryanair has been running its system at the limit, with 97 percent of seats occupied in August, when the carrier flew 12.7 million passengers. Flights are operating as usual for customers who haven’t received emails from the carrier.
The airline is mandated by the Irish Aviation Authority to bring staff time-off in line with the calendar year from Jan. 1, requiring it to distribute the backlog before the end of 2017. That left the carrier without enough pilots and flight attendants to operate its full fleet of Boeing Co. 737s until the start of its winter timetable in November.
“My apologies to our investors but also primarily to our customers for any uncertainty or any inconvenience we’ve caused you over the weekend,” O’Leary said. “It wasn’t done lightly, it wasn’t done out of some dismissive or ‘don’t-care’ attitude.”
