Ryanair and Four More Big Business Disasters That Could’ve Been Avoided
Irish airline Ryanair continues to come under fire after cancelling thousands of flights as it moves to reduce a backlog of staff holidays. Insights shows how even the biggest companies can make simple, yet highly damaging mistakes
After upsetting thousands of passengers, Ryanair officially apologised following its decision to cancel thousands of flights to improve its punctuality which had fallen below 80% in the first two weeks of September.
Some customers have reacted furiously to the cancellations, claiming holiday plans have been ruined by the decision, and the Dublin-based carrier’s chief executive Michael O’Leary has appeared on British TV and in front of shareholders to face the backlash.
The no-frills airline, Europe's biggest carrier by number of passengers, has also offered refunds or alternative flights to the "small number" of affected passengers over the period - which Ryanair accounts to be just 2% of its network.
The move to cancel flights is an attempt to help punctuality return to 90% by providing additional standby aircraft, following air traffic control issues in France, the UK, Germany and Spain.
To date, it seems to have worked with the airline stating that punctuality at the airline had improved to 96% and “more than 97% of affected customers have now been re-accommodated,” according to Kenny Jacobs, chief marketing officer at Ryanair.
Critics, however, say the scheduling crisis should have been prevented well in advance. Something even Ryanair’s chief has admitted. "We make mistakes," O’Leary said. "This time we made a major boo boo."
Experts have estimated the compensation for passengers forced to re-book could be as high as £22million.
Here are four other avoidable major business blunders.
1. Sony Hacking Scandal
In today’s world of “super-hackers” and cybersecurity, company emails and other workplace electronic communications aren’t the best places to disclose potentially offensive or embarrassing information, as Sony executives found out in 2014.
Sony Pictures Entertainment was hacked by shadowy hackers called Guardians of Peace, who were later identified by the FBI as operatives of the North Korean government.
Enraged by the filmmaker’s planned release of The Interview, which ridiculed North Korea’s leader, Kim Jong-un, the hackers leaked a series of sensitive Sony emails to force the company to cancel the movie’s launch.
The hackers made public embarrassing emails from Sony executives mocking their staff, famous entertainers and making many offensive comments. Amy Pascal was forced to step down as co-chairman of Sony Pictures after her emails went viral.
Sony eventually appeared to buckle to the threats, cancelling the movie's release, then reversing that decision amidst even wider criticism, including from then US President Barrack Obama.
The Sony hacking prompted the industry to take notice of cybersecurity and internet back-up measures to thwart and handle such security breaches, and also showed the importance of keeping digital communications, no matter how private you believe them to be, professional and ethical.
2. BP Oil Spill: Management and Communication Lapses
Widely considered one of the worst environmental disasters in American history, the explosion of an undersea BP oil well in the Gulf of Mexico in 2010 killed 11 workers on the Deepwater Horizon rig and destroyed the area’s wildlife.
According to the US federal judge who ruled on the matter, the explosion saw 134 million gallons of oil slush into the ocean, and images of oil-soaked birds, fish, and turtles washing up on shore along the coast went viral, drawing anger from around the world, including the White House.
However, the devastating impact of the crisis could have been avoided, or at least met with stronger resistance, according to an official White House report.
The report analysing the causes of the disaster identified bad management and a communications breakdown by BP and its Macondo well partners played a significant role in the spill, with safety lapses described as "chronic".
The study, which was passed to President Barack Obama, suggested the three companies involved in the disaster had failed to share important information, which meant they did not fully appreciate the risks they were taking in the final days of the rig’s operations.
William Reilly, the co-chair of the investigation, said: "The series of decisions that doomed Macondo evidenced a failure of management, and good management could have avoided a catastrophe."
3. Samsung: The Fiery Galaxy Note 7
The dream of most companies, big or small, is to have the hottest product on the market. Unfortunately for Samsung, their Galaxy Note 7 was too hot as reports came in from customers that the smartphone was catching fire.
And the disaster was compounded by Samsung’s failure to quickly correct the issue.
Initially, Samsung replaced the battery to try to solve the problem, but users continued to report incidents of smoking and burning. Soon the scenario began to affect the phone manufacturers reputation, with customers reporting that some airlines wouldn’t allow them to bring a Samsung Galaxy 7 on their flight, until the issue was finally solved.
The issue forced the South Korean company to twice halt production of the phone and issue a major recall, costing up to £12.6 billion, according to Reuters.
4. Sainsbury’s – Social Media Slip Up
Social media can take corporate mistakes viral, as Sainsbury’s found out to their annoyance in 2014 when a motivational poster designed for “staff areas” accidently appeared in the window of one of Sainsbury’s east London shops.
Only meant for internal use, the poster depicted a new staff incentive, called the “Fifty Pence Challenge”, aimed to boost the retailer’s profits by encouraging staff to up its customers spend. The poster read: “Let’s encourage every customer to spend an additional 50p during each shopping trip between now and the year end.”
When a photo taken by Chris Dodd, a TV freelancer, who spotted the poster in the grocer’s store on Romford Road in Stratford, was posted online, the advert caused uproar with shoppers who felt the brand was sneakily trying to squeeze more money from them during their shop.
Rivals also took advantage of the mistake, with discount retailer Lidl launching its own fifty pence challenge: "Let's encourage every one of our lovely customers to save as many 50ps as possible.”