28 April, 2010

Ryanair boss Michael O'Leary defiant over compensation rules of stranded passenger due to Volcano eruption Iceland

background information


The majority of the news headlines these days are about stranded passengers, flying restrictions and the enormous revenue losses of the airline companies. This is all caused by the ash cloud which was caused by the volcanic eruption on Iceland. The boss of Ryanair said that he is willing to reimburse travelers the original price of their air fare and no more. He questions "why exactly are the airlines expected to be reimbursing people's hotels, meals and everything else when the government are the ones who made a balls of this?"

For the boss of Ryanair this case is a dilemma. If Ryanair does not compensate their passengers extra expenses they will not act in accordance with the law, but more importantly their image will be damaged and the chance exists that they will loose quite some passengers in the future. On the other hand, if Ryanair completely compensates all his passengers, the company can get into financial trouble.

Morality is about helping others, so from this viewpoint Ryanair has to pay the customers for their extra expenses. According to the guidelines of the EU consumer rules they have to pay these costs. From a business point of view the argument for not fully compensating the passengers is understandable. Profit maximization is the main goal in this perspective and this is especially important for a budget airline like Ryanair.

A couple of weeks ago the company also made the headlines, because they dropped a whole family on the wrong Island due to bad weather. With this incident fresh in mind and this refusal to abide the EU consumer rules will probably cause the company some customers and damage of their brand/image. Ryanair just have to do their moral duty and fully compensate their passengers in this case.


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2 comments:

Unknown said...
This comment has been removed by the author.
Unknown said...

It is understandable that the airline does not feel compelled to pay for these extra expenses. Usually, airlines only have to cover the expenses for passengers when the delays are their fault due to logistical, mechanic problems, etc., but not when it is due to a natural cause that they cannot control.

It is strange that the EU suddenly imposes a law on them, putting them in an ackward position where they cannot pay this out, but now making it morally wrong for them not to pay because the EU has imposed it as a public law.

You can discuss that it should not be morally permissible for the EU to imposes this regulation because they are making an airline responsible for something which they cannot control, especially considering that they are a low cost airline. The airline itself is already incurring increadible losses due to the unperformed flights, and will reimburse people or their tickets. Technically, they work as a whole to maximize their profits. you could say that by not covering extra expensses they are trying to maximize their profits and not hurting the passengers, but simply not helping them. Hence, they are not doing something morally wrong to do something morally right.
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