Ryanair scraps VIP scheme after customers take too many cheap flights

Core Viewpoint - Ryanair has decided to terminate its "Prime" loyalty program after incurring losses of €1.6 million due to excessive discount claims by members, indicating that the program was not financially viable for the company [1][2][4]. Summary by Sections Program Details - The "Prime" membership allowed members to pay £79 annually for monthly discounts of up to £60 on return flights, along with free travel insurance and seat reservations [1]. - The program generated €4.4 million in subscription fees but resulted in over €6 million in discounts claimed by members, leading to a net loss [2]. Membership and Viability - The program will be closed to new members immediately and will be fully shut down by next October [3]. - Ryanair's marketing chief stated that while 55,000 members signed up, a minimum of two million would have been necessary for the program to succeed [3]. Operational Challenges - The marketing chief noted that managing the program required significant effort, including fare management and communication, which was disproportionate to the small number of passengers benefiting from it [5]. - Even if membership had reached 200,000, it would still represent a small fraction of Ryanair's annual 200 million passengers and €13 billion revenue [5]. Market Suitability - The initiative was created in response to customer demand, but the results indicated that loyalty programs are more effective for full-service, long-haul airlines rather than low-cost carriers like Ryanair [6]. - Customers who travel infrequently are less likely to sign up for such programs, as they prefer to take advantage of low fares without long-term commitments [7]. Strategic Focus - Ryanair's marketing chief emphasized that the company would focus on more effective sales strategies, such as regular seat sales and promotional offers, rather than loyalty programs [8].