Passengers Become Data Mines as Ryanair to Emirates Hone OffersBenedikt Kammel
Ryanair Holdings Plc said it’s building a database of passenger travel habits to help fine-tune offers as more people use mobile platforms to manage trips.
The Irish low-cost carrier set up a subsidiary called Ryanair Labs last year that includes data analytics as well as its mobile and digital platforms. The information stored helps the airline anticipate customers needs and interact with other providers such as insurers and taxi companies, Chief Executive Officer Michael O’Leary said in Berlin today.
“I used to say that my ideal customer had a pulse and a credit card, but I’ve revised that view radically,” O’Leary said. “In the next five years, with each of my 90 million customers, I’ll know when you’re traveling, where you’re traveling, and I can send you a direct offer.”
Ryanair’s push highlights moves by airlines to tailor packages to individuals in an age when Google Inc. searches have simplified the tracking of consumer habits. The push will help win more business customers as well as leisure travelers as the Dublin-based company seeks to double its annual customer tally to 150 million in coming years, O’Leary said.
While Ryanair has grown up around online bookings, O’Leary said it had “woken up late” to business travelers and has only recently upgraded its web and mobile platforms to make the user experience more appealing. Additional information received from these initiatives is helping sharpen offerings, he said.
‘Drill and Mine’
Ryanair’s data will let the carrier know how often travelers head to particular destinations, whether they travel alone or as a couple or group, if they routinely book insurance or car rental, and be able to customize its offers accordingly and target the passengers with special offers, O’Leary said.
“We know who you are,” the CEO said. “The clever airlines are going to make a fortune in the next 10 years”
O’Leary, who spoke at the Global Business Travel Association conference in Berlin, was joined on stage by Tim Clark, president of Dubai-based carrier Emirates. Clark said he’s taking a similar approach at his airline, predominantly a long-haul operation that boasts the biggest fleet of Airbus Group NV A380 superjumbos and Boeing Co. 777 wide-bodies.
“We will drill and mine every single passenger that is entering our network,” Clark said. “Today, 50 percent is lost to us, and we don’t use intelligently.”
The two executives, while serving fundamentally different markets, said there are many similarities in the way they have built their companies, which were founded in the mid-1980s and have grown up by challenging the status quo of network airlines.
Both have vast fleet orders and have been largely profitable in recent years, a relatively rare feat in an industry that historically struggles with razor-thin margins.
O’Leary said he has no plans to challenge Clark in the long-distance market in the near future, given the poor availability of the jets he’d need to make the operation work.
“If you could get 40 to 50 long-haul aircraft you could do a stripped-down version of an Atlantic service, and you could wipe the floor with legacy airlines,” O’Leary said. But you have to start with scale, and we can’t see it happening.’’