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Ryanair CEO thinks frequent flyers should get no perks

Chief executive Michael O’Leary is known to be a bit of a loose cannon.

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Even more so than other industries, the aviation world is structured heavily around loyalty, hierarchy and seniority.

Routes with convenient layovers and to the most coveted destinations are assigned to employees based on how long a flight attendant has been with the airline while, on the traveler end, frequent flyer status is promoted as a “reward” for spending enough with the airline to earn it as well as the airline’s response to customer loyalty. That is why, in the fall of 2023, Delta Air Lines  (DAL)  found itself in the middle of accusations of being “disloyal” after cracking down on lounge access.

Related: Airlines are cracking down on lounge crowding in a way you won't like

The CEO of Ryanair  (RYAOF) , which was launched out of Dublin in 1985 and soon grew to become the largest carrier in Europe through its low-cost model, recently went against the grain and said that “loyalty” isn’t something the airline cares to reward.

A Ryanair passenger plane lands at Cologne/Bonn Airport. Photo by Thomas Banneyer/picture alliance via Getty Images.

picture alliance/Getty Images

Ryanair CEO says it offers low fares, not ‘loyalty’

“If you want something loyal, buy a dog,” O’Leary told an interviewer from The Independent when asked why the airline does not have frequent flyer status or even a basic points program. “If you want the lowest air fares in Europe, fly Ryanair.”

More Travel:

O’Leary, and Ryanair in general, are known as loose cannons in the aviation space. The airline has taken on a unique social media strategy in which it posts videos and memes making fun of both itself and passengers — from trolling “White Lotus” star Sydney Sweeney to asking a traveler who complained about the service on social media whether she would prefer to spend “€19.99 or €136,000,000?” for a private jet.

O’Leary himself has been known to make fiery outbursts and “fight back” against critics; after getting pied in the face by protesters arguing that ultra-low fares like the kind Ryanair offers are a significant source of greenhouse gas emissions, he wiped off the cream and said “well done” to the protesters before heading off to have his meeting with the European lawmakers.

This is why Ryanair is so set against a frequent flyer program

When it comes to the question around loyalty programs, O’Leary said that he doesn’t expect it to win over customers in the way it does for mainstream airlines.

“I don’t understand why, if you’re already getting the lowest fares in Europe and therefore you’re already benefiting, saving money every time you fly with us, why do we need loyalty scheme?” he said.

Another airline that does not have a loyalty program is fellow European low-cost competitor EasyJet  (EJTTF) . EasyJet did briefly experiment with a semi-private, invitation-only “Flight Club” immediately after the pandemic but ended up scrapping it because any rewards it could offer did not impact how much customers flew.

Related: Delta Air Lines makes a baggage change that travelers will like

Many other low-cost airlines have some type of loyalty program but the perks are significantly smaller than traditional ones since they cannot offer things like lounge access and significant discounts.

“The only low-cost carrier that has a loyalty program in the true sense is the Spanish budget carrier Vueling, which offers Avios based on the price you paid for your ticket,” Mark Findlay wrote for Simple Flying in September 2023. “Avios can then be used for upgrades and flights with Vueling or Spanish national flag carrier Iberia.”

Related: Veteran fund manager picks favorite stocks for 2024

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Food insecurity is significant among inhabitants of the region affected by the Belo Monte dam in Brazil

The social and environmental impact of the Belo Monte dam and hydroelectric power plant in Pará state, Brazil, has been called a “disaster” by researchers,…

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The social and environmental impact of the Belo Monte dam and hydroelectric power plant in Pará state, Brazil, has been called a “disaster” by researchers, environmentalists and several media outlets. The damage has again been highlighted recently in an inspection report issued by the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA), an agency of the Ministry for the Environment and Climate Change. The inspectors detected silting and erosion of the Xingu River, obstacles to river navigation, a significant increase in tree mortality, and the impossibility of reproduction for several fish species, as well as disruptions to the way of life of Indigenous and river-dwelling communities.

Credit: Igor Cavallini Johansen

The social and environmental impact of the Belo Monte dam and hydroelectric power plant in Pará state, Brazil, has been called a “disaster” by researchers, environmentalists and several media outlets. The damage has again been highlighted recently in an inspection report issued by the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA), an agency of the Ministry for the Environment and Climate Change. The inspectors detected silting and erosion of the Xingu River, obstacles to river navigation, a significant increase in tree mortality, and the impossibility of reproduction for several fish species, as well as disruptions to the way of life of Indigenous and river-dwelling communities.

A new study conducted with FAPESP’s support focuses specifically on food insecurity in Altamira, which is the city with the largest population in the region and has been dramatically affected by the construction of Belo Monte. Because of the megaproject, Altamira became a hub for the distribution of goods, services and the logistics essential to the construction process, with a significant impact on its population. 

Construction took place between 2011 and 2015, causing the city’s population to grow without adequate planning to assure the provision of services to residents and migrants looking for work. The shock made Altamira one of Brazil’s most violent cities. Although its population has declined since the dam was completed, the 2022 census recorded 126,279 inhabitants, 27.46% more than in 2010, when the previous census was conducted. This growth rate compares with 6.46% for Brazil’s total population growth in the same period.

The study, published in the International Journal of Environmental Research and Public Health, shows that 61% of Altamira’s households experienced some level of food insecurity and malnutrition in 2022, when the data was collected. 

“We conducted the survey in July 2022, seven years after construction ended, visiting 500 households selected as representative of the city’s socioeconomic strata and geographic areas. The scale used to measure household food insecurity is divided into three categories. We found the worst food insecurity in the poorest group, where heads of household had low levels of educational attainment and unemployment was high. In addition, the households with severe food insecurity had more members. Families displaced by the dam and resettled elsewhere also experienced severe food insecurity,” said Igor Cavallini Johansen, first author of the article. Johansen is a demographer and a postdoctoral researcher affiliated with the State University of Campinas’s Center for Environmental Studies (NEPAM-UNICAMP) in São Paulo state.

Unlike other studies of food insecurity in the context of hydroelectric developments in Brazil, this one used the Brazilian Household Food Insecurity Scale, known by the Portuguese-language acronym EBIA, Johansen said, explaining that the scale is based on a scientifically validated methodology for measuring access to sufficient food of adequate quality. 

“The survey included a questionnaire with eight standardized items. The responses were scored using the EBIA scale to arrive at a classification of food insecurity for each household in the sample,” he said.

The households were classified into the following categories: (1) food security (adequate food quantity and quality); (2) mild food insecurity (food quality impaired and uncertainty regarding future food availability; (3) moderate food insecurity (inadequate diet, food becoming scarce within the household, children prioritized over adults); (4) severe food insecurity (insufficient food for all household members).

“We formulated three hypotheses: (1) households were affected by a range of factors that together produced food insecurity; (2) poverty played a key role, and the most affected groups were those who had been forced to leave their homes and had been resettled in purpose-built housing projects, known as RUCs; and (3) besides the impact of the dam, the problem was made worse by the COVID-19 pandemic,” Johansen said.

The survey also took into account several socioeconomic variables as correlates of food insecurity, such as a wealth index (poorest, intermediate, least poor) considering the characteristics of the home, ownership of vehicles and appliances, etc.; whether respondents were monthly handouts from the Bolsa Família conditional cash transfer program; whether they had officially declared themselves affected by the dam; whether they lived in an RUC; the number of household members and over-sixties; and the head of household’s gender, skin color, age, marital status, educational attainment and employment status. 

“All three hypotheses were confirmed. Predictably, the various factors correlated with each other: the impact of the dam’s construction significantly increased the probability that household members lived in an RUC, and this increased the likelihood that a family was poor, which in turn entailed a risk of food insecurity,” Johansen said. “Access to food of the desired quantity and quality became more difficult for 69.7% of the households after construction of the dam was completed in 2015.” About half of these households (52.5%) said it had already been difficult before the pandemic, and the rest blamed the pandemic for the worsening of food insecurity since then.

“We also found that households with one or more members aged 60 and over experienced less food insecurity. This can be attributed to the contribution of old-age pensions to the household income, potentially reducing their exposure to poverty and hence to food insecurity,” he noted.

The lack of a survey conducted before the dam’s construction and based on the EBIA scale was unfortunate, Johansen added, as this could have been compared with the results obtained after its construction. “In any event, it was a shock to find that 61% of the households experienced food insecurity when the consortium that built the dam claimed to have invested BRL 6.5 billion, or about USD 1.3 billion, in social, environmental and sustainability-related measures in the region between 2016 and 2022. What was all that money used for?” he said.

The negative impact of Belo Monte is not an isolated case. Several other megaprojects implemented in the Amazon have also had significant social and environmental side effects. Another study conducted by the same research group and led by Caroline Arantes, a professor at West Virginia University in the United States showed that fishing communities lost production and income after construction of the Santo Antônio and Jirau hydroelectric projects in Porto Velho, Rondônia state. The communities were forced to adapt their fishing strategies and find other ways to earn a living in response to the impact of the dams. Household consumption of fish diminished significantly as a result. “These communities had always had fish meals every day, but after the dams were built they were able to do so only once or twice a week, if not less often,” Johansen said. The study in question is published in the Journal of Environmental Management.

Another prior study, in this case focusing on a fishing community on the Xingu River after construction of Belo Monte, showed that fish became scarce and food in general became more expensive in the region. An article on this study is published in the journal Human Ecology.

All these studies involved contributions by Professor Emilio F. Moran, principal investigator for the project “After hydropower dams: social and environmental processes that occur after the construction of Belo Monte, Jirau and Santo Antônio in Brazilian Amazon”, and supported by FAPESP via the São Paulo Excellence Chair program (SPEC). 

In addition to this grant, the study was supported by a postdoctoral scholarship awarded to Johansen, and a postdoctoral scholarship awarded to Vanessa Cristine e Souza Reis, also a member of the research group.

About São Paulo Research Foundation (FAPESP)

The São Paulo Research Foundation (FAPESP) is a public institution with the mission of supporting scientific research in all fields of knowledge by awarding scholarships, fellowships and grants to investigators linked with higher education and research institutions in the State of São Paulo, Brazil. FAPESP is aware that the very best research can only be done by working with the best researchers internationally. Therefore, it has established partnerships with funding agencies, higher education, private companies, and research organizations in other countries known for the quality of their research and has been encouraging scientists funded by its grants to further develop their international collaboration. You can learn more about FAPESP at www.fapesp.br/en and visit FAPESP news agency at www.agencia.fapesp.br/en to keep updated with the latest scientific breakthroughs FAPESP helps achieve through its many programs, awards and research centers. You may also subscribe to FAPESP news agency at http://agencia.fapesp.br/subscribe.

 


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International

Ryanair CEO goes on tirade about frequent flyer loyalty

Chief executive Michael O’Leary is known to be a bit of a loose cannon.

Published

on

Even more so than other industries, the aviation world is structured heavily around loyalty, hierarchy and seniority.

Routes with convenient layovers and to the most coveted destinations are assigned to employees based on how long a flight attendant has been with the airline while, on the traveler end, frequent flyer status is promoted as a “reward” for spending enough with the airline to earn it as well as the airline’s response to customer loyalty. That is why, in the fall of 2023, Delta Air Lines  (DAL)  found itself in the middle of accusations of being “disloyal” after cracking down on lounge access.

Related: Airlines are cracking down on lounge crowding in a way you won't like

The CEO of Ryanair  (RYAOF) , which was launched out of Dublin in 1985 and soon grew to become the largest carrier in Europe through its low-cost model, recently went against the grain and said that “loyalty” isn’t something the airline cares to reward.

A Ryanair passenger plane lands at Cologne/Bonn Airport. Photo by Thomas Banneyer/picture alliance via Getty Images.

picture alliance/Getty Images

Ryanair CEO says it offers low fares, not ‘loyalty’

“If you want something loyal, buy a dog,” O’Leary told an interviewer from The Independent when asked why the airline does not have frequent flyer status or even a basic points program. “If you want the lowest air fares in Europe, fly Ryanair.”

More Travel:

O’Leary, and Ryanair in general, are known as loose cannons in the aviation space. The airline has taken on a unique social media strategy in which it posts videos and memes making fun of both itself and passengers — from trolling “White Lotus” star Sydney Sweeney to asking a traveler who complained about the service on social media whether she would prefer to spend “€19.99 or €136,000,000?” for a private jet.

O’Leary himself has been known to make fiery outbursts and “fight back” against critics; after getting pied in the face by protesters arguing that ultra-low fares like the kind Ryanair offers are a significant source of greenhouse gas emissions, he wiped off the cream and said “well done” to the protesters before heading off to have his meeting with the European lawmakers.

This is why Ryanair is so set against a frequent flyer program

When it comes to the question around loyalty programs, O’Leary said that he doesn’t expect it to win over customers in the way it does for mainstream airlines.

“I don’t understand why, if you’re already getting the lowest fares in Europe and therefore you’re already benefiting, saving money every time you fly with us, why do we need loyalty scheme?” he said.

Another airline that does not have a loyalty program is fellow European low-cost competitor EasyJet  (EJTTF) . EasyJet did briefly experiment with a semi-private, invitation-only “Flight Club” immediately after the pandemic but ended up scrapping it because any rewards it could offer did not impact how much customers flew.

Related: Delta Air Lines makes a baggage change that travelers will like

Many other low-cost airlines have some type of loyalty program but the perks are significantly smaller than traditional ones since they cannot offer things like lounge access and significant discounts.

“The only low-cost carrier that has a loyalty program in the true sense is the Spanish budget carrier Vueling, which offers Avios based on the price you paid for your ticket,” Mark Findlay wrote for Simple Flying in September 2023. “Avios can then be used for upgrades and flights with Vueling or Spanish national flag carrier Iberia.”

Related: Veteran fund manager picks favorite stocks for 2024

Read More

Continue Reading

International

The CEO of a major airline is a former flight attendant

Mitsuko Tottori’s unexpected appointment shook up the Asian aviation world.

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While the trope of a lowly employee climbing through the ranks to eventually become chief executive has fueled a number of Hollywood film plots, the aviation world has been shaken by this actually taking place over in Japan.

At the start of 2024, Mitsuko Tottori was appointed as the chief executive of Japan Airlines  (JPNRF)  — the country’s flagship carrier that has a market cap over $1.24 trillion. Tottori has been in the aviation world for nearly 40 years when she first joined ranks as a flight attendant for Japan Air System in 1985. (The two airlines would later end up merging in 2002.)

Related: How the CEO of a Low-Cost Airline Tries to Keep Prices Low

Tottori would steadily rise through the ranks to different management roles, including being made the director of cabin attendants for Japan Airlines in 2015, before being appointed CEO and becoming one of less than 1% of women who lead major companies in Japan.

A Japan Airlines A350-1000 is depicted. Japan AIrlines is the country’s flagship carrier.

Japan Airlines

‘I realize the public doesn’t necessarily see me like that’ 

As Tottori’s appointment shocked the industry by going against the list of 10 or so big male names that insiders predicted for the post, she quickly found herself in a media firestorm in which she was described as a “mutant” and an “alien molecule.”

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“I don't think of myself as the first woman or the first former flight attendant,” Tottori said in an interview with a BBC correspondent. “I want to act as an individual so I didn't expect to get this much attention. But I realise the public or our employees don't necessarily see me like that.”

Throughout her career, Tottori has seen through numerous critical incidents including a 1985 JAS crash of a flight from Tokyo to Osaka that led to 520 deaths and Japan Airlines’ 2010 bankruptcy which the airline emerged from with the help of state backers and a complete restructuring of its board.

New Japan Airlines CEO says ‘it is not just about corporate leaders’ mindset’

Tottori is also not a graduate of the prestigious Japanese university from which seven of the last 10 men who led Japan Airlines before her appointment graduated and is a general wild card in what is now presented as a story of female achievement and changing times in a country known for its conservatism.

“It is not just about the corporate leaders' mindset, but it is also important for women to have the confidence to become a manager,” Tottori said. "I hope my appointment would encourage other women to try things that they were afraid of trying before." 

Related: Delta Air Lines makes a baggage change that travelers will like

Now that she’s had a few months in the job, Tottori told local media outlets that a weakening yen and multiple inflation-related pressures will require the airline to raise their prices eventually but will work on way to encourage more Japanese people to do more traveling both internationally and domestically.

“Although the number of passengers on domestic flights is returning (to pre-pandemic levels), it is not likely to increase any further, to be honest,” Tottori told the Japan Times. “We are thinking of downsizing our fleet a bit to maintain our domestic network.”

READ FULL BBC FEATURE ON TOTTORI HERE.

Related: Veteran fund manager picks favorite stocks for 2024

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