{"id":129586,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/mn6005-managing-corporate-reputation-spring-2016"},"modified":"2017-08-16T06:33:31","modified_gmt":"2017-08-16T06:33:31","slug":"mn6005-managing-corporate-reputation-spring-2016","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/mn6005-managing-corporate-reputation-spring-2016\/","title":{"rendered":"MN6005 Managing Corporate Reputation, Spring 2016"},"content":{"rendered":"
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<\/strong><\/p>\n

MN6005 Managing Corporate Reputation, Spring 2016<\/p>\n

Assignment 2 (70% weighting), Case Study: Ryanair www.ryanair.com
______________________________________________________________________________<\/p>\n

1. INTRODUCTION:
Despite being a hugely successful corporation, with impressive revenues of:
2015 Euro: 5,640 million (+12% from 2014)
2014 Euro: 5,037 million (+4% from 2013)
2013 Euro: 4,884 million<\/p>\n

and impressive net profits after tax of:
2015 Euro: 866.7 million (+66% from 2014
2014 Euro: 522.8 million (-8% from 2013)
2013 Euro: 569 million<\/p>\n

and impressive passenger numbers of:
2015: 90.5 million passengers (+10% on 2014)
2014: 81.7 million passengers (+3% on 2013)
2013: 79.3 million passengers\u2026<\/p>\n

\u2026the \u2018no-frills\u2019 airline Ryanair still has a number of reputational problems.<\/p>\n

The 2014 decline in profitswas due, claims the company, to its reduction in passenger fares, keeping fares low. This appears to be true, as Ryanair\u2019s actual passenger
numbers increased from 79.3 million passengers in 2013, to 81.7 million passengers in 2014, a rise of 3%. The 2015 increase in profits is due, according to its 2015
Annual Report, to a further increase of passenger numbers, to 90.5 million, an impressive increase of 10%, while still keeping its fares low.<\/p>\n

However, the airline regularly comes bottom, or near the bottom, of every major customer satisfaction survey, customers regularly use social media, such as Twitter and
YouTube, to complain about the dreadful quality of service (see: https:\/\/twitter.com\/hashtag\/ryanair; also see: https:\/\/www.youtube.com\/results?search_query=ryanair),
and its belligerent CEO, Michael O\u2019Leary, brushes aside any criticisms of his company, claiming that he gives customers what they want \u2013 cheap \u2018no-frills\u2019 flights with
little quality service (see: https:\/\/www.youtube.com\/watch?v=qQqGKMU5_NM).<\/p>\n

Also, a consumer-based global branding website shows that Ryanair is one of \u2018Worst Brands in the World\u2019(see:http:\/\/simplicityindex.com\/2015\/region\/global), and the
worst airline, for customer satisfaction.<\/p>\n

But things are changing. In 2013 and 2014, faced with reductions in predicted profits, many shareholders, plus other key stakeholders and audiences, asked Michael
O\u2019Leary many tough questions, and demanded that Ryanair:
\u2013 radically improves its levels of customer service
\u2013 turns its negative publicity into positive publicity
\u2013 manages its communications, brand, and image more effectively
\u2013 radically improves its overall corporate reputation.<\/p>\n

Ryanair\u2019s CEO Michael O\u2019Leary finally agreed, and made 2014 the year of change for Ryanair (see:www.thedrum.com\/news\/2014\/01\/17\/ryanair-insists-it-s-changing-2014-
weekly-twitter-chats-and-new-irish-ad<\/p>\n

Yet two years later in 2016, the picture is still a mixed one. As recently as January 2015, the airline was fined by the Italian airline authorities for poor customer
service, its third fine from the Italians in recent years (see below). On the other hand, business, revenue, profits, and passenger numbers are clearly impressive,
and are growing (see FY data, see above), and recent figures from March 2016 show record numbers of passengers (see:
http:\/\/www.telegraph.co.uk\/business\/2016\/04\/04\/ryanair-passenger-numbers-surge-to-record-level\/). But many stakeholder groups, especially customers and the media,
continuing to draw attention to Ryanair\u2019s poor customer service and damaged corporate reputation, while some other stakeholders, especially financial analysts and
market researchers (such as YouGov), have praised the airline for improving it customer service, brand, identity, and reputation.<\/p>\n

TASK:
So, Michael O\u2019Leary will clearly need help, and will require the expertise from the industry\u2019s best corporate communication professionals \u2013 you \u2013 in producing a
comprehensive communications report which identifies Ryanair\u2019s key stakeholders and audiences, improves communication with them, plus innovates new activities, in
order to: (i) improve the company\u2019s long-term customer service, identity,image, and brand (ii) ensure the company gains positive publicity, and (iii) develop a strong
corporate reputation for the company overall, beyond 2016.<\/p>\n

2. SELECTED NEWSPAPER \/ MEDIA ARTICLES (four in total):<\/p>\n

(i) Daily Telegraph Business, 4th April 2016<\/p>\n

(http:\/\/www.telegraph.co.uk\/business\/2016\/04\/04\/ryanair-passenger-numbers-surge-to-record-level)
By Tim Wallace, Daily Telegraph Business, 4 APRIL 2016 \u2022 8:44AM
Low-cost airline Ryanair\u2019s passenger numbers shot up by 28pc in March 2016 compared with the same month in 2015, marking its fourth consecutive month of growth of more
than 25pc.The average plane was 94pc full, up from 90pc a year ago and 80pc in the same period of 2014.
It comes after the company promised to cut prices and start treating its customers better, in a bid to shed its reputation for terrible customer service.In 2014 chief
executive Michael O\u2019Leary said the airline \u201cis more fluffy now\u201d as he pledged to offer better service, a move the company now says is paying off.<\/p>\n

Michael O\u2019Leary has promised to treat customers better
Ryanair carried 8.5m passengers in March. In the past 12 months it has carried 106m passengers, a rise of 18pc on the year before.An early Easter could have helped
boost the figures with more trips taken in the school holidays, but February\u2019s passenger numbers were also up 28pc to 7.4m and January\u2019s rose 25pc to 7.5m.
Rival airline EasyJet has yet to publish its March figures, but reported that it carried 4.9m passengers in February, a rise of 9.8pc on the year.
Ryanair\u2019s chief marketing officer Kenny Jacobs said lower prices combined with better service had driven the improvement. \u201cThese record monthly numbers were
delivered- despite three days of unjustified French air traffic control strikes in March which caused the cancellation of over 500 flights \u2013 due to our lower fares,
stronger forward bookings and the continuing success of our \u2018AGB\u2019 [Always Getting Better] programme,\u201d said Mr Jacobs.
The Ryanair group made a profit of \u20ac103m (\u00a382.4m) in the third quarter of 2015, a rise of 110pc on the same period of 2014.Those improvements came despite the
terrorist attacks in Paris, which Mr O\u2019Leary said had dented demand for flights.<\/p>\n

(ii) YouGov, 3rd November 2015<\/p>\n

https:\/\/yougov.co.uk\/news\/2015\/11\/03\/ryanairs-upward-flight-continues<\/p>\n

By Milan Dinic<\/p>\n

Ryanair\u2019s Brand Flying High: On the crucial measures of value-for-money, quality and consideration, Ryanair\u2019s brand continues to improve
Ryanair has announced its profits, revenue and share price have continued to improve. The airline\u2019s traffic has risen 13% to 58 million passengers. This follows a
strong summer for the company which became the first airline in the EU to have carried more than 10 million customers in one month.
YouGov BrandIndex data reveals that Ryanair\u2019s brand strength has continued on its upward path since June when we reported the company was seeing the benefit of a more
customer-friendly approach.
The value-for-money score has increased and is currently on an all-year high, from -14.2 in January to current +3.4 points on November 1st. In terms of the perception
of quality the low-cost carrier has had a continuous growth up until the end of June and it has stabilized since then.<\/p>\n

Regardless of the 2% raise in ticket prices, BrandIndex shows Ryanair\u2019s consideration score (a measure of whether people would consider using the service) has gone up
since the beginning of the year. Since October the air carrier has continued to increase the advantage over the average in the airline industry on this measure.
Currently, Ryanair\u2019s consideration score is on 21.3 points and rising, compared to 14.4 of the airline sector as a whole.<\/p>\n

Ryanair has said it is planning an aggressive expansion in the coming period, with new bases opening in Berlin, Gothenburg, Corfu and Milan.<\/p>\n

(iii) Daily Telegraph Travel, 23rd January 2015
(http:\/\/www.telegraph.co.uk\/travel\/news\/ryanair\/Ryanair-fined-550K-for-poor-customer-service\/)
By Soo Kim, TELEGRAPH TRAVEL WRITER, 23 January 2015 \u2022 12:00am
The budget airline was fined by the Italian competition watchdog AGCM this week following a flood of complaints received from passengers over its premium rate customer
service phone lines.
Fliers found it \u201cdifficult and unreasonably expensive\u201d to get reimbursements, find alternative flights following cancellations and receive detailed billing information
for tax and expenses purposes, The Australian reported. Others complained of the difficulty experienced when changing their bookings before the flight and trying to
obtain information about accessibility for passengers in wheelchairs.
The fine comes after an investigation launched last June which gave the airline 90 days to eliminate the \u201cextreme difficulty\u201d and exorbitant costs faced by its
customers. The AGCM acknowledged Ryanair\u2019s effort in the last year to improve its service, which included getting rid of a premium phone number for passengers
requiring assistance with boarding, but those measures were deemed not sufficient to avoid a fine.
Ryanair has noted the ruling and is looking into an appeal, according to a statement. The latest fine is the second one imposed by the Italian authority on Ryanair in
less than a year. Last February, the airline was fined \u20ac850,000 (\u00a3635,000) for the \u201clack of transparency in their travel insurance policies\u201d and the \u201cobstacles created
in case of refund\u201d during the online purchase of airline tickets. The airline was accused of not supplying adequate information or providing misleading information to
consumers regarding travel insurance.
In 2013, the airline was also fined \u00a3350,000 by the Italian competition watchdog Codacons for failing to provide a clear price at the very start of the booking
procedure. Ticket prices should be \u201cclearly and fully indicated from the very first contact with the consumer in such a way as to make the final price immediately
clear\u201d, the regulator said. Ryanair rejected the \u201cunfounded decision\u201d, and said it would appeal the ruling.
Last year, the airline saw an increase in passenger numbers and a rise in half-year profits, which Kenny Jacobs, the company\u2019s chief marketing officer, put down to
\u201cimproving customer experience\u201d.<\/p>\n

Michael O\u2019Leary says \u201cRyanair is more fluffy now\u201d, with customer service improvements on the way (Getty Images)
Last summer, Telegraph Travel\u2019s Lizzie Porter was allowed to go behind-the-scenes at Ryanair\u2019s customer service centre, where she spoke to Clodagh Rochford, a customer
services manager who claimed that customer complaints had dropped significantly since Christmas of 2013. The 2013 figures from the Civil Aviation Authority showed that
it received 35 complaints about Ryanair per million passengers, compared with 174 for US Airways and 139 for Virgin Atlantic.
The most recent charge against Ryanair\u2019s customer service puts a setback on the radical overhaul of its image and service in the last year.
Previously, Michael O\u2019Leary, Ryanair\u2019s chief executive, has come under fire for a host of controversial statements he made about customer service and passengers, such
as describing passengers who forget their boarding pass as \u201cidiots\u201d. On customer service, he once noted: \u201cPeople say the customer is always right, but you know what \u2013
they\u2019re not. Sometimes they are wrong and they need to be told so\u201d while regarding refunds he\u2019s said: \u201c\u201dYou\u2019re not getting a refund so **** off. We don\u2019t want to hear
your sob stories. What part of \u2018no refund\u2019 don\u2019t you understand?\u201d
Last year, however, the Ryanair chief admitted the airline\u2019s failure to make customer service a priority and said the airline would invest heavily in improving the
customer experience over the next few years.
\u201cPeople used to come to us for the low prices and put up with the service,\u201d he told the Telegraph. \u201cI don\u2019t want them to have to put up with the service any more.\u201d
\u201cRyanair is more fluffy now,\u201d he said, insisting the airline would stop things which \u201cunnecessarily p*** people off\u201d.
(iv)The Guardian, 23rd December 2014<\/p>\n

http:\/\/www.theguardian.com\/business\/2014\/dec\/23\/ryanair-richly-rewarded-transformation<\/p>\n

By Gwyn Topham, transport correspondent, Tuesday 23 December 2014 18.42 GMT
Nicely does it \u2013 Ryanair is richly rewarded for its transformation
Gone are the cash-milking rules and girlie calendars. In come allocated seating, relaxed baggage rules \u2013 and more passengers<\/p>\n

This time last year Ryanair\u2019s conversion to being nice seemed an unlikely if relatively straightforward morality tale. Boss Michael O\u2019Leary had repented his penny-
pinching and potty-mouthed ways; customers were no longer to be fleeced for an extra bag or for forgetting to print a boarding pass; and the Scrooge in charge was no
longer crying humbug about the internet and Twitter.
In the Dickens version, doing good becomes an end in itself for the transformed Ebenezer: \u201cHis own heart laughed: and that was quite enough for him.\u201d But in the Irish
airline\u2019s story, what happened next would have delighted a miserly Scrooge: being nice has seen profits soar with huge windfalls for shareholders. This modern
Christmas Carol sees the hero ever more loaded, even now that Tiny Tim can carry his crutch on to the plane for free.
And after years of berating the bleeding hearts, O\u2019Leary hired former moneysupermarket.com and Tesco marketing executive Kenny Jacobs to become the smiley public face
of a newly cuddly airline. Ryanair was, says Jacobs, \u201ccheap and nasty\u201d. But he resists talk of being \u201cnice\u201d \u2013 the shorthand used by his boss for the airline\u2019s
transformation. \u201cI\u2019m not sure we\u2019re quite nice yet.\u201d But they\u2019ve definitely toned down the aggro: \u201cThere was a lot of antagonism between Ryanair and its customers that
didn\u2019t need to be there. In the past year we\u2019ve just absolutely taken that away.\u201d
Jacobs is frank about the experience many passengers could relate to. It was, he says: \u201cI\u2019m going with Ryanair [so] you\u2019d better be ready for it, know the rules, pack
this way, be there at this time, watch out for this and that \u2013 and when it\u2019s boarding time, that scrum, if you\u2019ve got your kids with you, what do you do?\u201dAfter a year
in the job he reckons that has changed: \u201cThe fear factor, the antagonism has gone \u2013 and that\u2019s made a huge difference.\u201d
Changes such as allocated seating, he says, together with an accessible website, curbing punitive charges and relaxing baggage rules have filtered through to the
public. YouGov polling for the airline shows 30% more people now say they would happily fly Ryanair.Now, he says, the emphasis is on \u201cgetting smarter [rather] than
nicer \u2026 us being gushing and the most wonderful flight you\u2019ve ever had, that\u2019s not our territory. It\u2019ll always be stripped back. It was cheap and nasty. Now it\u2019s cheap
and straightforward and smart. We\u2019re one of those savvy brands: H&M, Hyundai, Primark \u2013 there\u2019s no shame in that for us, that\u2019s who we compare ourselves to.\u201d
Jacobs\u2019 inside story of Ryanair\u2019s year of change starts with his interview for the job. He didn\u2019t have to convince O\u2019Leary that Ryanair needed to transform its image:
\u201cThat was bleedin\u2019 obvious.\u201dThe essentials of the new brand were written on a sheet of A4. \u201cMichael had made up his mind that he wanted to be nice and had a list of
things he wanted someone to come in and implement.\u201d
Jacobs added some ideas of his own: the infamous Ryanair crew calendar was scrapped at that interview.They had to \u201cwipe the board clean\u201d, he says, and with the charity
calendars the airline was unnecessarily closing down its own customer base. \u201cWhen you\u2019re raising money through a girls-in-bikinis product, it\u2019s got a limited
audience.\u201d<\/p>\n

That decision prompted \u201ca few complaints from wannabe models\u201d, he says with a grin, but otherwise staff were keen to change. Within a month of Jacobs\u2019 arrival, town
hall-style meetings were held at corporate HQ in Dublin. \u201cWe put up a slide saying this is what we\u2019re going to do and how we\u2019re going to do it. For people who had been
there a while, there was a bit of eye-rubbing \u2013 we\u2019re really going to do this: launch an app and not charge people for it, launch a family product, scrap the
calendar?\u201d
Some of the transformation could be implemented from head office, but he adds: \u201cWhere the rubber hits the road is 6,000 crew, 1,600 flights a day: it does come down to
the flight experience.\u201dChanging the staff culture is under way: the first retraining programmes, for about 70 senior cabin crew and base supervisors at a time, started
in November at Stansted and Dublin.\u201cIf you go back to old Ryanair \u2013 in the queue, no allocated seat, wearing two jackets, packing your handbag into your case \u2013 you
didn\u2019t enjoy that, but the crew didn\u2019t either. Now, taking off, you don\u2019t have this grumpy crew versus grumpy passengers.\u201d
O\u2019Leary himself took little persuading in the new-fangled methods, from the crew training to hiring a generation of developers for a new department named Ryanair Labs
and adopting recruitment, data and marketing tools that Jacobs says had taken too long to reach Ryanair\u2019s Dublin HQ. \u201cRyanair at management meetings is probably
talking about things that it didn\u2019t talk about before: the blinkered view of \u2018this is the way we do it\u2019 is now gone.\u201d
The internal company mantra is Always Getting Better \u2013 the \u201cnorth star\u201d in Jacobs\u2019 management-speak. \u201cI kind of had to take Michael through that, but he loves the fact
it\u2019s the umbrella we put up, and a core value in Ryanair.\u201dTargeted mass emails \u2013 about 20m a week \u2013 have had high rates of conversion into customer bookings, almost
10%, claims Jacobs. Marketing spend and some other costs have gone up but are more than balanced by extra tickets sold to keep costs per passenger stable.Fuller planes
and even healthier balance sheets will have helped sweep away doubts for the results-driven \u2013 and immensely personally rich \u2013 O\u2019Leary. \u201cHe loves new Ryanair. He\u2019s a
big shareholder and he sees it in the numbers too: it\u2019s easy to love it because of the net margins.\u201d
O\u2019Leary remains very visible on the shop floor at Ryanair HQ, even if he has kept some of the more colourful aspects of his personality from public view in the last 18
months. But Jacobs hints that the boss may soon make a welcome return to the fray.The cultural change may hasten the airline\u2019s next big strategic change: Ryanair has
made no secret of its low-cost long-haul ambitions, but with investors in America warming to its reincarnation, Jacobs says transatlantic flights may come even sooner
than expected.
Getting the necessary wide-body aircraft remains the sticking point in linking Dublin to east coast US the Ryanair way, but the airline\u2019s vast cash reserves mean it
may yet jump the queue of international competitors for Airbus A350s or Boeing 787s. \u201cIt would need to be a cancellation from one of the big Gulf carriers \u2013 a
Dreamliner or an A350. But three years out, it\u2019s possible, yeah.\u201d
Does he ever feel a pang of regret for the Ryanair past, the loudmouthed, customer-baiting, truculent misanthropes of old? Jacobs doesn\u2019t pause. \u201cI don\u2019t think anyone
will miss the way we used to be. But I guess a few of the lads might miss the calendar.\u201d
3. ADDITIONAL INDUSTRY RESOURCES TO RESEARCH:<\/p>\n

History of Ryan Air: http:\/\/corporate.ryanair.com\/about-us\/history-of-ryanair<\/p>\n

Full Year (FY) results for 2015, see the 2015 Annual Report:
https:\/\/investor.ryanair.com\/wp-content\/uploads\/2015\/08\/Annual-Report-FY15.pdf<\/p>\n

Ryanair Job Vacancy: Pan-European Brand Communications Manager:
http:\/\/corporate.ryanair.com\/careers\/vacancies\/Sales%20&%20Marketing\/174830850D
4. ADDITIONAL MEDIA \/ NEWSPAPER RESOURCES TO RESEARCH:<\/p>\n

Video of Ryanair\u2019s Kenny Jacobs on the airline\u2019s Customer Experience Strategy: