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Ryanair Kill UK Price Comparison Site Affiliates?

August 10th, 2008 · 22 Comments

Ryanair, the no frills Irish airline, has announced that it will no longer honour bookings made via price comparison sites. In a shock move, it blames ‘screen-scraping’ websites for a loss of revenue claiming that these sites are illegal and slow down the company website.

According to many newspaper reports, price comparison websites indirectly book 1000 Ryanair tickets per day and, if Ryanair go through with their threat, these tickets will not be honoured.

As many as 1,000 people a day could be turned away at airport check-in desks next week despite having paid for their tickets.

The move could ruin the holiday plans of thousands of families who have booked cheap flights during the school summer break.
Source: Daily Mail

So what does this mean for the future of price comparison shopping websites and those web publishers who make money promoting them? Some of the most lucrative affiliate offerings available to online marketers are via price comparison sites so does this move by Ryanair spell the end for UK price comparison site affiliates?

In the article in The Guardian, Howard Millar of Ryanair is quoted as saying the company will be taking legal action against more comparison sites following it’s successful injunctions against Vtours and BravoFly. The Telegraph suggests Ryanair is currently gunning for Tui UK, the parent company of Thomson and First Choice, as well as On the Beach.

Personally I’m amazed that Ryanair have taken this step. If the figures quoted in the papers are true, comparison site sales account for less than 0.5% of their daily sales so why bother going after them with potentially expensive lawsuits? Besides, aren’t Ryanair earning money from these sales anyway? Sure they’re not able to upsell other product such as car hire or hotels but they’re filling their planes which, in the current economic environment, should surely be welcome? Due to the credit crunch, people are shopping around for discount air travel so why not build a separate database for the ‘screen-scraping’ websites so that it doesn’t interfere with your main website traffic and accept the lower margin tickets?

In the last 10 years I don’t think I’ve booked flights directly with any airline. I use sites like Expedia, Travelocity and GreatLateDeals to shop around, compare prices and find cheap flights. If an airline like Ryanair aren’t listed then I generally don’t bother checking direct. I’m confident that I’ll find the best deal using these sites.

I guess I shouldn’t be too surprised at their actions. This 5 year old thread on Affiliates4U talks about Ryanair having a hang up about “middle men” but what if other airlines follow suit and blocked sites like Expedia? What if electrical companies decide that they don’t want their products featured on sites like PriceRunner?

Look through your affiliate partners inventory and I can guarantee you’ll find some high earning price comparison sites so if your business model is based on the revenue you currently receive, it might be time to look again because this could spell the end of the road for the price comparison site market.

Tags: Making Money Online

22 responses so far ↓

  • Mike // Aug 10, 2008 at 2:57 am

    Ironically Ryanair have announced that they stand to make an annual loss of $90.285m due to high oil prices. If I were the CEO, I’d accept any sales I could get!

    How much does it cost to build an external site just to cater for the comparison sites?

    Madness….

  • James // Aug 12, 2008 at 7:44 am

    Although it’s not very smart giving up a percentage of revenue (comparison sites wil just work with other airlinges) I think it’s mainly to get more value out of current costumers – including insurances, hotels and car rentals.

  • Mike // Aug 12, 2008 at 1:11 pm

    Absolutely, James. It’s all about the upsell. However the way they’re going about things is wrong and you only have to do a quick search online to see the level of anger being directed towards them.

    Aaron Wall makes an interesting point in the opening paragraph of his recent blog post.

    Because of the low cost of online distribution a company can quickly grow from being one of your affiliates, to one of your leading sales channels, to being the leading competitor. And once they grow into a destination you can’t just cut them off without hurting your customers or your brand

    The laughable thing here with Ryanair is that the sales through their affiliate network amount to 0.5% of their daily sales!

    I would suggest the PR disaster will cost them more than that…

  • Lee Duncan // Aug 14, 2008 at 10:41 am

    I’m appalled when businesses start to defend themselves aggressively like this. It tells me they’re losing the plot.

    It strikes me that they’d be better off setting up a server to specifically provide their pricing to the comparison sites via a quick feed, taking the screen scraping away. They might win more friends in the affiliate world too.

    Any business that behaves in a punitive way to customers or supply chain eventually comes a cropper. Much better to focus on doing your core business really well so that you attract business, rather than repelling it with bad PR. Ah well.

    Cheers,

    Lee Duncan

  • Mike // Aug 14, 2008 at 5:51 pm

    Spot on, Lee. It’s such a no brainer that I can’t understand why they haven’t done this.

    If their actions had affected only the affiliate partner sites then that’s one thing but the way they’ve done this has affected their end customers as well as giving them some unwelcome press.

    Nice site, by the way. Have bookmarked to have a proper read.

  • Lee Duncan // Aug 14, 2008 at 8:19 pm

    I tend to get a bee in my bonnet about bad customer treatment. I think Ryanair’s behaviour this time suggests they want to stand out to their customer by becoming Fawlty Towers of the airline industry.

    And thanks for your kind words about my blog – I hope you enjoy it :-) Yours is great, although you’re a bit mean for stopping me linking via key-words :p

    Cheers,

    Lee

  • Mike // Aug 15, 2008 at 11:48 am

    I know. I’m such a meanie 😀

  • Todd // Aug 17, 2008 at 2:42 am

    I think that some of the affiliate sites will start putting stronger disclaimers on their sites to make sure this doesn’t negatively impact them.

  • Mike // Aug 17, 2008 at 11:16 am

    The affiliate sites will drop Ryanair as will the price comparison sites. The interesting thing to see will be how other vendors react to this.

    To my mind having a non-salaried sales force that is paid on results makes good business sense. Whilst the price comparison sites only contributed 0.5% of Ryanairs daily sales, those were potentially sales that they wouldn’t otherwise have achieved and the only cost to Ryanair was the affiliate commission.

    What they’ve done will cost them a lot more in the long run. I certainly won’t be using Ryanair in the future…

  • Mark // Aug 21, 2008 at 1:16 pm

    It’s problematic issue and I can see both points of view. Ryanair wants to have website online and fast, but all these comparison sites creates huge load on their database server.

    They have numbers in hand so if their servers are overloaded by scraping scripts but only small percentage of sales comes from these sites than the answer is clear.

  • Paula // Aug 25, 2008 at 9:14 am

    Wow, I can’t really quite believe that. Why would anyone knock back a sale of any type? I can’t see why a price comparison site would diminish their sales. It’s also quite a bit of bad publicity for them now since it has gone to the papers.

  • TigerTom // Aug 27, 2008 at 12:25 am

    Ryanair – the airline that cheapskates like to complain about.

  • Andrea // Aug 27, 2008 at 9:04 pm

    ooops! that is a tremendously bad news for comparison site… but i guess you could not blame the companies for making this bold decision…

  • Rayne // Sep 9, 2008 at 7:20 pm

    i agree with James it’s not very smart giving up a percentage of revenue but the value of customers is alot more important.

    Cheers,
    Rayne

  • Yvonne // Sep 10, 2008 at 5:02 am

    I think that some of the affiliate sites will start putting stronger disclaimers on their sites to make sure this doesn’t negatively impact them.

  • Chinese herbs // Sep 30, 2008 at 7:41 pm

    Hi guys, Just finished my first affiliate based website, phew! It’s a price comparison website but a very slimline version of what most of us are used.

  • Mike // Sep 30, 2008 at 8:43 pm

    …and you think the best way to promote it is to leave comment spam?

    FAIL

  • Lee // Sep 30, 2008 at 9:06 pm

    Hehehehe, and I thought I was being cheeky for posting a decent comment with a keyword phrase!

    Good on you Mike :-)

    And, just to post on-topic, after Washington’s no vote to the $700Bn buyout, there’ll be far fewer bankers flying and so even less tickets for Ryanair to sell.

    Cheers!

    Lee

  • Roddy the Traveller // Oct 1, 2008 at 7:48 pm

    There are many shopping sites end up with price comparison dont know the idea.

  • goedkoop lenen // Dec 15, 2008 at 3:23 am

    So I guess Ryanair’s total sales will now decrease also?

  • Mike // Dec 15, 2008 at 1:28 pm

    I think it’s fair to say that most airlines will be seeing a drop in sales, not just Ryanair.

    A number of UK based companies have recently withdrawn their affiliate programs. I find it bizarre that in a time where every penny counts that they effectively sack their commission only sales agents.

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