3 Ryanair, the best-known budget airline in Europe, focuses on popular routes and very low operating costs. For years, the boss of the airline, Michael O’Leary’s policy on customer service was clear. ‘Our customer service’, he said ‘is about the most well defined in the world. We guarantee to give you the lowest airfare. You get a safe flight.

You get a normally on-time flight. That’s the package. We don’t and won’t give you anything more. Are we going to say sorry for our lack of customer service? Absolutely not. If a plane is cancelled, will we put you up in a hotel overnight? Absolutely not. If a plane is delayed, will we give you a voucher for a restaurant? Absolutely not.’

However, the bad publicity eventually prompted a limited rethink by the company. After a drop in their hitherto rapid profit growth, shareholder concern and Ryanair being voted the worst of Britain’s 100 biggest brands by readers of the consumer magazine Which? The company announced that it was to reform its ‘abrupt culture, and try to eliminate things that unnecessarily annoy customers’. Included in these annoying practices were fines for small luggage size transgressions and an unpopular €70 fee for issuing boarding passes at the airport, rather than printing it out at home (it was lowered to €10). Yet Ryanair insisted that such charges were not money-spinning schemes, but were designed to encourage operational efficiency that kept fairs low. In fact, fewer than ten passengers a day had to pay for forgotten boarding passes.

What does this example tell us about the trade-off between service quality and cost?