I’ve had a flight cancellation with RyanAir recently and it got me thinking about how much low-cost companies actually save by removing the service element from their offering. Traditionally, companies have always sought to minimise costs and increase efficiency; whether it’s by reducing product complexity or using call center outsourcing, but doing so by removing the service element was a pretty bold move. The fascinating thing is that the net result has been the usurping of the incumbents and the emergence of a completely new model for flying.
It does turn the whole game on its head and opens the door to a rethinking of other sectors. More importantly, it raises an interesting question:
Is the customer still king? Or are cheaper prices more important?