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Ryanair Rapped By Spanish Courts As Share Price Tumbles

It’s been a tough week for the leading low cost carriers Ryanair – as shares in what some observers refer to as the ‘World’s Rudest Airline’ nosedived by nearly 13% on fears of falling profits. Whilst a recent Spanish court judgement has ordered the company to remove specific clauses from their booking terms and conditions.

Over the last decade Ryanair has evolved into one of the world’s busiest airlines – and their importance to both the Lanzarote property and tourist markets cannot be underestimated, as they remain the largest volume carrier of passengers to the island by some distance. Having created a flight hub at Arrecife airport back in 2011.

However many industry observers believe that this amazing ascent has been achieved at a very high price – as over the years the company has become synonymous with ruthless pirate pricing (essentially hitting customers with overpriced fees for any extras), whilst also displaying a flippant and arrogant attitude towards these passengers and their rights. A policy best epitomised by their motor mouth CEO Michael O´Leary, who once famously stated; “People say the customer is always right, but you know what – they’re not. Sometimes they are wrong and they need to be told so.”

However traffic volumes at Ryanair are now set to remain static for the first time in many years and fares are expected to fall, whilst competition is also on the increase. All of which has forced the airline to launch something of a charm offensive that is essentially designed to hold on to market share – resulting in a u turn on some of their most hated policies, such as charging for changes to flight bookings, whilst allocated seating will also be introduced from February 1st next year.

Meanwhile in Spain, a court in Madrid ruled last week that Ryanair would have to remove eight ‘abusive’ clauses from their booking terms and conditions, such as charging passengers who forget to print out their boarding passes. It remains unclear however whether these changes will impact all Ryanair customers or just those passengers flying with the airline into and out of Spain.

Certainly the Ryanair board and their garrulous chairman have been berated by investors recently for their macho, bullying approach. With some fearing that this has helped to alienate swathes of potential customers, who have been scared off by the stress associated with the no frills offering and the seemingly endless stories about travellers being fined for baggage size and weight at the departure gate.

And now that the squeeze on consumer purses in key markets such as the UK is dissipating there is a real and growing fear that this approach could all now backfire spectacularly. As better off consumers decide to spend a few extra pounds with rival airlines instead.