Ryanair scraps VIP scheme after customers take too many cheap flights

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Ryanair has scrapped a VIP loyalty scheme offering ticket discounts after members booked too many cheap flights.

On Friday, the low-cost airline said it was ending its “Prime” membership programme after just eight months because a surge of bookings had led to €1.6m (£1.4m) of losses.

Under the plan, members could pay £79 a year and get monthly discounts of up to £60 off return flights, as well as free travel insurance and seat reservations.

However, Ryanair said the trial programme had “cost more money than it generated” with subscription fees bringing in €4.4m but members receiving more than €6m in discounts.

The scheme will be closed to new members with immediate effect before shutting down completely next October.

Dara Brady, Ryanair’s marketing chief, said that while 55,000 people had signed up, at least two million members would have been needed to make it a success.

“Generally with these programmes, if someone takes the full value of everything it will end up costing you money no matter who you are,” he said.

“We gave it a go. It was just about washing its face but there wasn’t much in it for us. We needed it to be much higher volume.

“It took more effort than it was worth. You needed to manage monthly fares and the comms schedule and monitor the system to make sure people were getting their allocations. It was a lot of work for a very small proportion of our passengers.”

Mr Brady said Ryanair could have worked to lift membership towards 200,000 to generate more fees – but this would still have been “small beans” at an airline carrying 200 million people a year and generating €13bn in revenue.

The marketing chief said the initiative had been well intentioned and was created after passengers had pressed it for a membership scheme.

However, he said the outcome of the experiment suggested loyalty schemes were better suited to the full-service, long-haul carriers such as British Airways.

“There were some great bargains. But people who are travelling once or twice a year are not going to sign up and someone flying from Manchester back to Dublin every month already knows the drill,” he said.

“They say, ‘Look, I get the low fares anyway and I’ll decide at the time whether I’m taking a reserved seat and insurance. I’m not deciding now for the next 12 months.’

“Loyalty programmes work better on long-haul, premium routes, which we don’t do. In the low-cost market, what drives loyalty is price. If we drop fares we get the customers anyway.

“There are better things to pour our time into, like our regular seat sales and buy one get one free offers that are open to everybody.”

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