Ryanair kisses and makes up with travel agents

In its early days, one of the first groups that Ryanair took on was travel agents. Chief executive, Michael O'Leary, with some justification, saw them as middle men whose commissions were preventing the airline from offering the best deal possible to passengers.

In 2004, Ryanair ended whatever third-party relationships it had left and O’Leary declared “never again”. Given that it was a decade ago, you could hardly call it a dramatic U-turn, but nevertheless, the airline has backtracked on that pledge.

This year it has signed global distribution deals with computer reservation specialists Travelport and Amadeus allowing their affiliated travel agents to book Ryanair flights for customers.

As 90 per cent of travel agents in Europe are affiliated with either Travelport or Amadeus, the agreements mean that, once again, you can walk into one of their offices and buy a flight.

Announcing the Amadeus deal in Cologne, Germany, yesterday, O'Leary told the assembled reporters that he was "idiot" to say never again will the airline enter into a global distribution deal and admonished them to ignore him the next time he made a similar statement on anything else.

However, there is no doubt he meant what he said in 2004. What’s happened is that Ryanair now has business customers firmly in its crosshairs and many corporates use specialist management companies to look after their travel requirements. These in turn use travel agents, so the airline decided it was time to kiss and make up.

Its willingness to adapt in order keep growing the business is a good thing, but that comes at a a price. For example, it has tripled its advertising budget, presumably the travel agents get a commission and there could be exta costs associated with flying into more primary airports.

Ryanair’s key attraction over its rivals is that it is cheaper, once you are flying A to B. It can do this because it is better at controlling costs and getting the most out of its resources. The trick will be to continue to keep a tight rein on the purse strings while moving its offering closer to that of a full-service airline.