Ryanair scraps loyalty program after losing nearly 2 million euros in eight months, existing members to get benefits

Just eight months after launching a loyalty program for customers, U.S. budget carrier Ryanair Holdings Plc has shut down its frequent flyer program due to higher-than-expected costs.

In a statement on Friday, Ryanair said more than 55,000 customers had signed up for its loyalty subscription called Prime, earning the company more than 4.4 million euros ($5.1 million) in fees. However, members benefited up to 6 million euros in eight months thanks to discounted tickets.

“This trial cost more money than it generated. This level of membership or subscription revenue does not justify the time and effort required to launch exclusive monthly Prime seat sales for our 55,000 Prime members,” said Marketing Manager Dara Brady.

The airline said it wanted to provide discounts “to all our customers, not just this subset of 55,000 Prime members.”

Chief Executive Michael O’Leary said earlier this year that he had been persuaded to launch Prime despite previously being a “huge skeptic” and that he expected the company to generate 2.5 million euros in revenue from membership fees.

“I think the only mistake we made was underpricing the Prime membership,” he said during an analyst call in May. “We probably should have been charged around 99 euros for this.”

Rival airline Wizz Air Holdings Plc also has a 499-euro membership called All You Can Fly, and the airline has recently released more subscriptions.

Ryanair said existing members of Prime will have access to the remainder of their annual Prime subscription, but new members will not be accepted after Friday.

“We are grateful to our 55,000 Prime members who have signed up for this Prime trial over the last eight months, and they can be confident they will continue to enjoy exclusive flight and seat discounts for the remainder of their 12-month membership,” he said.

The airline, Europe’s largest by passenger numbers, said earlier this month that it expects to fly 207 million passengers a year by the end of March, a million more than previous forecasts, after an improvement in Boeing’s aircraft deliveries allowed it to add capacity in the first half and the current quarter.

What is Ryanair Prime?

Priced at €79 a year, Ryanair Prime offered members cheaper flights, travel insurance and free reserved seats on up to 12 journeys, marking something of a departure from Ryanair’s no-frills, minimal service model.

When it introduced the plan, the airline said Ryanair Prime was limited to 250,000 members on a first-come/first-served basis, suggesting sign-ups were falling far short of its targets.