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18 August 2009

Ryanair

By Andrew Clifford

We can learn a lot from the business practices of Ryanair, both bad and good.

I decided to take a short break and visit the Republic of Ireland. I booked flights with Ryanair.

Ryanair is a very successful budget airline. It offers very low prices, but when you come to book a ticket, you are presented with a number of notionally optional, but entirely necessary, extras.

For each person on each flight you have to pay a £5 card handling fee, unless you use the rather uncommon Visa Electron card (I later found how to avoid the Ryanair card handling fee). You usually have to pay a £5 online check-in fee for each person on each flight. So each return flight costs £20 more than the headline price. Checked-in baggage is an expensive extra.

As well as the disingenuous hidden charges, additional charges if things go wrong are downright predatory. If you forget to check-in online, it costs £40 per person per flight to check-in at the airport. Changing a name on a flight costs £100 to £150. Excess baggage costs £15 per kilogram.

I had not booked on Ryanair before, and I found the whole process bewildering and stressful. I felt that they were trying to rip me off to start with, and extort me later if I hit problems.

I was going to write about the parallels between Ryanair's practices and IT project management. How we sell projects on low headline prices, in the full knowledge that they will really be more expensive. How we are predatory if our business customers want changes later in the project.

I did some more research into Ryanair. Although I still think that Ryanair are disingenuous and predatory, I now partly admire them.

Ryanair does everything it can to keep costs down and pass this on to their customers. Where costs seem high (such as baggage costs, or in-airport fees), they are trying to show people where the true costs are, and encourage them to take cheaper options.

Like other low-cost airlines, Ryanair avoids the costs of traditional, full-service airlines. But Ryanair goes further than most. They constantly battle airports and public bodies over fees and taxes, and withdraw services from airports over seemingly small amounts. Rather than work within industry norms, Ryanair constantly pursues value for their customers.

We can learn a lot from Ryanair.

We should avoid disingenuous and predatory pricing, knowingly or negligently giving low project estimates and inflating costs later.

But there is a lot we should copy from Ryanair. We should be prepared to break out of the traditional, expensive full-service model of IT and show low-cost alternatives. We should show where the money goes. We should show the true costs of business decisions, indecision, lack of business ownership, last minute changes, underinvestment.

And we should constantly battle to lower costs. This means breaking away from industry norms, constantly exploring new ways to save money, and constantly challenging suppliers to reduce costs.

Love them or hate them, we have a lot to learn from Ryanair.

Next: Knowing when to start finishing

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