I read with a large degree of pleasure the announcement last week, that the UK’s largest Online Travel Agent (OTA), On the Beach (OTB), has decided “enough is enough” and has launched a legal case against Ryanair.

 OTB is suing Ryanair, accusing them of abusing its dominant position in the flight seat market, to try to force customers to book directly via the Ryanair website and not via OTA’s. This is not a new battle, as Ryanair have always declared their opposition to working with OTA’s and the travel trade in general, despite acknowledging that in 2019 at least 2 million of its flights were booked via agents.

 Ryanair has always taken an extreme stance, refusing to provide booking API’s and actively trying to blook screen scrappers. Having failed to achieve this, they have now switched to disrupting OTA customer processes by preventing their customers from using the “My Ryanair” online check-in online tools and sending OTA customers emails suggesting that OTA’s mark-up flight and baggage costs are above those charged by the airline.

 During the Covid-19 crisis, Ryanair took their anti-trade stance even further, putting OTA booking at the back of the queue for refunds. Ryanair knew that the package regulations and the ability of customers to hit OTA’s with credit card recharges would force them to refund, even if they had not been repaid by Ryanair, protecting Ryanair from a direct customer backlash for late repayment and allowing them to hold on to hundreds of millions in refunds that were due.  For OTB alone this represented a £48.7 million cash flow hit. Many other travel companies such as Love Holidays, incurred extensive brand damage because their trust funds simple did not have enough money in them to refund customers if Ryanair did not refund them. Hence, my view is that although OTB is fighting an independent battle against Ryanair, if they are successful it will lead to a “Me too” avalanche of damages claims.

 The CAA when challenged about their lack of action against Ryanair and the damage they have done to the credibility of Trust funds and the ability of ATOL principals to refund clients, freely admit that currently, their “Tool kit” of powers is inadequate.

 But watch this space, as change must come if the CAA has any chance of getting the trade behind its latest ATOL reforms aimed at ensuring customers receive timely refunds. Without airline repayments being brought under the CAA’s control, the whole trust fund model is fatally flawed.

 Although the other main low-cost carriers have embraced travel trade distribution of “Package Holidays, where they earn a higher combined margin by selling flights, hotels, and transfers, they have also sought to restrict flight only booking outside of its consumer direct sites by imposing substantial API booking fees.

 OTB has fought a longstanding battle with EasyJet over their £6 per sector per passenger booking fees. A minimum cost of £24 per booking, is clearly far more than the cost of providing the API booking technology and is pitched to cover the airline’s “potential” lost revenue from ancillary revenues. Although no third party can know the compromise reached by OTB that allows them only to charge its customers half the standard Easyjet API fee, I’m sure the threat of an abuse of power court case was a consideration.

 Low-cost carriers would obviously prefer all flights to be booked via their consumer-direct website, however, I believe that any lost ancillary revenue is more than compensated by the higher load factors OTA drive. Early holiday sales via OTA’s also move low-cost carriers faster up their load factor yield curves, allowing them to charge more for remaining seat only sales.

 Customers buying a package holiday, primarily buy based on the holiday destination and hotel offered, whilst considering the flight as a “bus service” purchased based on a combination of lowest price and best flight times. OTA’s offer the best range of options, simply because unlike low-cost carriers internal holiday companies, they offer all airlines and the ability to mix and match inbound/outbounds between different airlines. In doing so they provide a range and value that customers benefit from and is something the courts are likely to seek to protect.

 Therefore, I think our judicial system will find in favour of OTB and conclude that Ryanair is indeed abusing a dominant market position, even though the UK government via either the CAA or CMA have failed to bring them inline to date.

 Whatever happens, the trade should be applauding OTB for fighting the case and highlighting an issue that has affected hundreds of UK travel companies and continues to do so.

Like many UK travellers, I hate Ryanair with a passion after a litany of Covid-19 dirty tricks. Broken cancellation buttons understated brought forward balances and a rip off £95 amendment fee per flight seat, not to mention refunds that never seem to appear in your bank account, don’t sit well with me as a customer.

However, when booking flights to Andorra for a new year ski trip, Ryanair had the best schedule and a £30 per seat lower price. So now I’m faced with a dilemma. Can I risk booking with Ryanair now that Covid-19 disruption is easing?

I’m ashamed to admit that you can guess the outcome, but it does beg the question. What is the real benefit to airlines like Jet2 and Easyjet from doing the right thing by customers?

I personally think the answer depends on what product the airlines intend to sell moving forward.

Business traveller’s spending company money are more discerning and will pay a premium to fly with Easyjet, whilst using their annual Speedy Boarding pass to book their preferred seats, carry extra hand luggage and avoid the worst of the queues.

However, leisure travellers booking a quick city break or a week away in Spain often regard flights as a bus service, booking the cheapest priced option relative to the flight times they want. Brand loyalty rarely survives even a £10 differential, with sites like Skyscanner and Google actively promoting mix and match flying between different airlines.

Ryanair is the ultimate no-frills airline, with a brutal attitude that says the lowest price wins and customers can be stripped of as much money as possible during a pandemic downturn, as they have short memories. Unfortunately, my own experience shows that they are probably right.

It is interesting that Ryanair’s, eastern bloc equivalent, Wizzair are now entering the UK departure market, targeting Easyjet routes, whilst avoiding Ryanair.  They clearly believe Easyjet are a softer target, that can be taken on with the weapon of price. How ironic given this was how Easyjet drove British Airways out of Gatwick.

I would argue that Jet2 have ringfenced themselves from this battle, having driven their in-house holiday operation to 60% of overall volumes and up to 80% on most of their beach routes. Brand value definitely does matter in the holiday sector when the tour operator is responsible for the whole holiday experience. Few customers would ever book a Ryanair holiday!

Jet2 Holidays have also successfully integrated into the wider third-party travel community, being the go-to holiday company for most high street retailers. They also provide seats to many Dynamic Packaging players now have they have removed API fees, unlike Easyjet who still damage relationships with a £12 per flight seat or £24-30 price disadvantage compared to customers buying flight direct.

In summary, doing the right thing and protecting your brand during a pandemic for me makes total sense, but I’m not convinced that in the bus route world of flight only, customers brand loyalty is worth the investment.

I think Easyjet offer a brilliant service and have a mega-brand but need to use this to rapidly grow their holiday division, to complement their strong business travel presence, as competing directly with Wizz air and Ryanair in the brutal flight only market may not be a winning strategy.