Low-cost carriers
AIR ON A SHOESTRING
Low-cost carriers are turning their attention to the corporate market and infi ltrating travel programmes across the country, and now even Ryanair is getting in on the act. Andy Hoskins takes a look at this evolving sector
be turning its attention to the corporate sector and making its flights available for travel agents to book on the GDS. For Ryanair CEO and chief motormouth, Michael O'Leary, it is a major u-turn. “Screw the travel agents. Take the f*****s outside and shoot them,” he once said. “What have they done for passengers over the years?” Winning over agents and the wider business travel community is one obstacle, developing its business model and product offering to suit travel managers and their road warriors is quite another. So why now? A low-fares leisure market that is slowly saturating, a couple of profit warnings, the falling cost of GDS distribution and an orange rival that is making serious inroads with the corporate market are all reasons for Ryanair to chase the high-yield corporate passenger. The self-styled 'ultra low-cost carrier'
I
f ever there was a universal raising of eyebrows in the business travel community it would be the point in time when Ryanair announced it would
and a business product – likely to include late flight changes, fast-track security and more luggage and seating options – is due to be launched this summer. Referring to O'Leary as “the most hated
“ As the number of low-cost carriers continues to grow,
TMCs are adapting their ”
procedures to accumulate this fare content
man in the travel industy”, the airline's newly appointed corporate sales manager, Lesley Kane, said at the Advantage Conference in May that, “There is no getting away from the fact we have a significant amount of work to do.” Ian Allan Travel's managing director, Pat O'Neill, echoes that sentiment, pointing out that Ryanair “went great lengths to distance TMCs by threats of penalising screen- scraping and the use of its website.” He continues, “Trust,
transparency of pricing, availability of content and structure are major hurdles it needs to overcome in order that
they can compete successfully in the corporate market."
has already revamped its website, reducing the number of clicks needed to make a booking from 17 to just five, introduced allocated seating and it allows passengers to take a second, small item of hand luggage onboard. But perhaps the biggest development
was its return to the GDS earlier this year, after an absence of 14 years, going live with Travelport in April. It is also spending £35million on communicating the message that it's serious about courting corporates,
Distribution developments Kane says Ryanair's return to the GDS is a win-win for the airline and for travel management companies, and that it hopes to build relationships with the likes of Advantage, the GTMC and with agents. “When we came off the GDS it was the
right decision at the time. Now we want to go after wider distribution channels and grow our passenger traffic,” said Kane. An estimated 20 per cent of Ryanair
costs were paid in travel agents commission and GDS costs the first time round, figures that a low-cost carrier
couldn't sustain. But times have changed, with commissions disappearing and GDS fees falling in recent years. The carrier’s launch on Travelport in
April has proved “very successful so far”, says Kane, who added that the airline is also in talks with Sabre and Amadeus and hopes to be onboard with one of them by the year’s end. “Low-cost carriers want to be in the
corporate space because it’s where passengers travel year-round and book late,” says Amadeus UK & Ireland's head of marketing communications, Rob Golledge. “They get better yields for those last five
seats on the plane. GDS distribution also expands their reach and distribution beyond their home market,” he adds. There are currently over 500 airlines on
the Amadeus system, including 70 low- cost carriers, and the GDS reported a 25 per cent increase in LCC bookings in the first half of 2013 alone. “As the number of low-cost carriers
continues to grow, TMCs are adapting their procedures to accumulate this fare content,” says Ian Allan Travel's O'Neill. “The GDSs have recognised the demand
and the requirements of both the TMCs and their customers and continue to bring appropriate tools to the marketplace.” EasyJet has been on the GDS since 2007
– and making a success of it – but last autumn it became the first airline to sign up to Amadeus Light Ticketing, a development that is “expected to increase bookings with new pricing, ticketing and booking functionality offering the same look and feel as for traditional or flag carriers”, says the GDS. Andrew Hodges, easyJet's Director for sales, distribution and business, adds, “Working with travel agents in the most
➔ THE BUSINESS TRAVEL MAGAZINE 31
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