Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Ryanair has scrapped its loyalty programme after just eight months because passengers were costing the airline money by taking too many discounted flights.
The scheme offered early access to discounted tickets and free seat reservations on up to 12 journeys, for a flat fee of €79 or £79, and was capped at 250,000 passengers.
About 55,000 people signed up, generating €4.4mn in subscription fees for the business.
“However, our Prime members have received over €6mn in fare discounts, so this trial has cost more money than it generates,” said Ryanair marketing chief Dara Brady.
“This level of memberships, or subscription revenue does not justify the time and effort it takes to launch monthly exclusive Prime seat sales for our 55,000 Prime members.”
While those who paid for the service can continue using it until October next year, the airline on Friday said it would not sign up any new members.
“We are grateful to our 55,000 Prime members who signed up to this Prime trial over the last eight months, and they can rest assured that they will continue to enjoy exclusive flight and seat savings for the remainder of their 12-month membership,” added Brady.
Which? Travel concluded after the scheme was introduced that the “calculations Ryanair provides shows very few travellers would save money by subscribing”.
Chief executive Michael O’Leary earlier this year admitted that the airline had underpriced the scheme.
Prime was the first time Ryanair had ventured from its zero-frills model to offer such a scheme. The airline took until 2014 to introduce allocated seating.
Rival Wizz Air already has an “all you can fly” offering that costs €499 a year. The London-listed carrier recently expanded the number of people who could sign up for the scheme.
EasyJet also has a loyalty programme that gives customers greater flexibility to change flights as well as faster boarding and access to premium seats for £249 a year.
Despite its loss from the scheme, Ryanair profits rose by 40 per cent over the summer owing to robust demand, helped by more Europeans holidaying within the region rather than travelling to the US.