Monthly Archives: January 2009

Disreputable business practices go unpunished

Ryanair lost a court battle in Spain against an intermediary travel agency (Atrapalo)
that was selling Ryanair flight tickets irregularly.

Ryanair has no agreements with this travel agency. Ryanair sells its own flights through its own web page, directly to its customers. The Ryanair website usage policy states that their website may be used exclusively for private and non-commercial purposes. Atrapalo was using automatic mechanisms to use Ryanair’s end-customer service, introducing itself as an intermediary, and offering Ryanair flight tickets to its own customers, thereby using Ryanair’s website for commercial purposes and thus clearly violating the website usage policy.

Even so, the Spanish court has ruled against Ryanair. Ryanair was right to claim that this travel agency (Atrapalo) and others (e-Dreams, Rumbo, Opodo, Bravofly, V-Tours and Tui) must stop selling Ryanair flight tickets. The airline should have the right to decide how to sell their flight tickets, and for this reason they choose not to advertise their flights on the global travel agency sites (Amadeus, Galileo, Sabre, Worldspan). If they choose to do it exclusively directly with the customer, without intermediaries, they ought to be allowed to. The Spanish justice system just denied them that right. The Spanish joke justice system is hard at work once again, siding with the criminal part (in this case, Atrapalo).

Any company must be free to choose how to sell or not to sell their services, and this court sentence rids Ryanair of any say on the matter.

The Spanish court order blocks competitiveness and productivity: Ryanair is one of the best run airlines in Europe and with the highest punctuality rate thanks to their business practices. The court orders Ryanair to accept piracy-like business practices of Atrapalo, regardless of the damage they may cause Ryanair’s business or its effectiveness.

It’s discouraging to see the Spanish press (here and here) taking sides with the illegal practices of the Spanish on-line travel agency. The attitude of the justice system and the press are two examples of the the many reasons that keep Spain well behind in terms of productivity, in Europe and worldwide.

It’s also very discouraging to see that the European Commission criticized Ryanair too for not allowing an intermediary to sell their flight tickets. As with last year’s language despite a pro-regionalism local Spanish government with Air Berlin, public authorities intend to tell companies how they should run their businesses. They ought to limit themselves to making public infrastructures and public services work, and to ensure the conditions for businesses to foster, but that seems to be too much hard work for them, so they rather spend their time criticising profitable and efficient businesses.

If the European Commission cares at all for consumers, they ought to defend the willingness of companies to establish a direct channel with the customer, even if exclusively, as Ryanair wants to do. Among the business practices truly damaging for consumers are redundant intermediaries in product and service delivery which increase cost, create little or no value, and introduce unnecessary complexity for the consumer. If a company wants to have an exclusive and direct relationship with its consumers, they should be allowed to. Ryanair is being denied this right.

Hopefully Ryanair will win their appeal of the spanish court sentence, and the similar court battles in France, Germany, Italy and UK.