Is Raynair an unethical business Ethical and Philosophical approaches - Essay Example

?Is Raynair an unethical business? Ethical and Philosophical approaches Introduction/background Raynair is an Irish airline, founded in 1985 with a staff of 25 people. The airline is commonly known for its ‘low cost’ services. It has a fleet size of 298 Boeing, and employs about 8,500 pilots, counter workers and flight attendants. The company’s C.E.O since 1994 was Michael O’Leary, who has been incessantly criticized for his harsh and supposedly unethical management style. Just a year after the company was unveiled; it serviced two turbo prop aircrafts, which flied about 82,000 passengers. Four years later, the company lost $20 million dollars. Later in 2011, the company had grown to attract 75.8 million passengers who boarded their planes, leading to generation of a whopping $4.2 billion in revenues. After years of exponential growth, the company finally resolved to offer their customers very low airfare rates, though a storm sparked when the company introduced many unreasonable charges. Raynair unmatched low prices brought the company to a status of global fame, because its services were 2-3 times cheaper than what similar companies charged (Ryanair website, 2013.). However, the truth of the matter is that this airline company had introduced so many hidden fees and services to boost its revenue and recover from the extremely low prices (Ryanair website, 2013). This issue attracted a lot of controversy regarding the legality of what Raynair was doing and whether its business plan and procedures was really ethical. In a nutshell, Ryanair’s hidden charges are certainly unethical. It is very strange, for example, to realize that a customer is charged a fee for not checking-in online. Raynair introduces so many hidden charges and hides them under their “low priced tickets”. This unethical practice, unfortunately, can taints its reputation and reduce its customers base. If Raynair’s purpose is to maximize shareholder’s returns, violating the rights of employees and customers to achieve its goals is a violation of its ethical responsibility. Raynair airline is a corporate entity, which is legally considered to be a corporate person, entitled to rights and responsibilities, just like any other person. Theorists, such as Milton Friedman has maintained that corporate executives are free to maximize the profits of their entities the way they want, but by making sure they conform to their basic rules of the society, including those embodied in the ethical customs and those embodies in law (Friedman, 1970). However, the case of Raynair is a case of total disregard to these laws and ethical customs. While the company generates about $500 million, over 20 percent of this revenue comes from sources other than airline tickets. Some of the additional revenue sources include $208 charged for passengers who change names on their boarding pass, excessive luggage fee of $28 per kilo, a boarding pass fee of $40, a reserved seat fee of $13, credit card use fee of 2%, a checked musical instrument fee of $83, a bottle of water that is sold to customers at $3.50. These and many other types of fees that are charged in the cabin have attracted a lot of controversy, regarding their legality and ethical grounds. The employees of Raynair are also not left out in the ethical controversy that surrounds their employer. They are the ones who are forced to charge the customers these controversial charges. According to Friedman, maximizing of the company’s profits without regards to workers or customer’s welfare is an unethical act of individualism (Gallagher, 2005). In regards to this, Raynair is engaging in individualism because its central motive is maximizing profits, notwithstanding what it will take to achieve that goal. Following its reactions, it was estimated that the company would save millions of money, at the expense of 400,000 passengers. The fact that there are numerous customers who lodge complaints after experiencing different ordeals, but their concerns are hardly addressed, is a further testimony that this company does not care about the welfare of its customers (Budget Airline Watch., 2012). Raynair’s central goal is maximizing profits, and if it means to deny its customers their rights or treat them unfairly, then they do not hesitate to do so because they are inspired by a spirit of individualism. In 2010, Raynair reportedly sparked a furious reaction from politicians after declining to pay hotel bills belonging to passengers cut off by the volcanic ash cloud, which was a deliberate negation to abide by stringent EU consumer rules. The airline’s C.E.O blatantly told the passengers that the company could not meet hotel bills incurred while they were stranded abroad. The C.E.O maintained that it would only compensate the customers for what they had paid as fair and nothing more. This action went against the Europe’s regulations that compel airlines to provide drinks and foods as well as hotel accommodation when travelers are stranded. Indeed, Ryanair, the airline’s C.E.O insists that the company’s website declares that there is no time or money limits such a commitment. As if he does not care about his actions, Ryanair threatened the airline’s regulator to take him to court. All these acts of unethical act of individualism           According to utilitarian theory, an action is deemed to be right or wrong depending on its repercussions and its impacts on majority of the people (West, 2004). This implies that an action is considered to be ethically upright when it yields more positive results than the potential negative results. As such, an action can be deemed to be ethical based on a set of principles that can yield the highest value to the biggest number of people (Mill, 2006). Many actions that are taken by Raynair have more negative impacts than positive ones, if any exist. If anything, the only positive impacts is that the company is able to make higher profits, though by using deceptive means. Besides introducing so many charges, the company has not put up enough facilities to help its clients while in the cabin. For example, the aircrafts do not have facilities such as seat back pockets and non-reclining seats. Moreover, the aircrafts have ‘standing room only’ frights, and their floatation devices are in the overhead compartment, while passengers are forced to load their own luggage into the plane. What’s more, the company has removed two toilets in each of its aircraft in order to create extra seat in the planes, thereby generating extra revenues. As if this is not enough, the company charges $1 on using the only one bathroom that has been left. Ideally, most of these actions are taken for one single motive – to maximize the company’s profits. This motive leaves many people on the receiving end than those who benefits, and hence its actions are unethical. In addition, a theory called Kantian deontology can be used to test the ethical grounds on which Raynair makes decisions. This theory provides that an action is deemed to be ethical if it can be accepted as a universal law by all people (Makkreel & Luft, 2010). Immanuel Kant, the pioneer of this theory believes that morality must abide by a set of principles without exceptions. As such, this theory takes into consideration definite rules, which are very important, and instructions must be given regarding the way individuals should conduct themselves (Holzhey & Mudroch, 2005). In addition, this school of thought values the idea of people treating each other with respect. What’s more, it is deemed unethical when a company treats a person as a means to get to an end (Holzhey & Mudroch, 2005). Although the charges by the airline appear to be low, after adding all the extra charges, the customers are forced to pay an additional of up to over 400%, which is equivalent of flying first class on most airlines. These actions, if analyzed critically, will lead to the realization that Raynair is introducing policies that cannot be accepted as a universal law by all people, to perpetuate individualistic motives in a manner that amounts to using its workers and customers as means to reach the end(to maximize profits). In other words, individuals should be held accountable in upholding a set of maxim for the sake of assessing if their actions are ethically right. Nonetheless, there has emerged some controversy around Kantian deontology especially because the theory is perceived to be inadequate and narrow, hence not effective in measuring different problems (Makkreel & Luft, 2010). For example, when Raynair makes its workers’ rights and duties to cross path, it does not have the moral guidance or solution in doing so. A company that does not guarantee its workers justice lacks moral authority in its actions. In this regards, justice is the significance of getting equality, fair treatment and being accorded due rights (Rawl, 1999). According to Paul, Miller and Paul (2005), an individual should be given an opportunity to enjoy rights over some property as long as it was acquired fairly and without breaking the rights of other people. According to Rawl (1999), justice is referred to as ‘Justice as Fairness’. Smith (1759) advocates that all individuals should have equal rights to fair distribution of social goods. He provides that the existence of economic and social inequalities hinders benefit of those members of the society who are most disadvantaged (Smith, 1759). Based on this argument, it is right to consider Raynair as unethical company because it has refused to accord its workers the due justice. It is reported that there are numerous customers who lodge complaints after experiencing different ordeals, but their concerns are hardly addressed (Budget Airline Watch., 2012). This means that those who have been lodging complains have been denied the opportunity to enjoy their, despite the fact that they do not break the rights of other people, in the course of their demands. Similar to the arguments of Smith (1759), Raynair is perpetuating economic and social inequalities, which have significant negative impacts in the society. There is also the issue of rights, whereby the theory of rights provides that the best approach of addressing ethical issues is to constitute some grounds for responsibilities so that every individual’s entitlement to human rights can be justified (Shaw, 2010). In addition, the rights theory affirms that human rights should not depend on influence from other factors. Human right should be accorded to all members of the society by means of being a human being (Shaw, 2010). There are two types of human rights, including positive and negative. Negative rights, which are more relevant for this case, are responsibilities imposed on people to prevent them from hindering other people’s freedom of action (Jennings, 2008). It is reported that Raynair has faced fierce criticism different reasons, which could be understood as denying of other people from enjoying their rights as human beings. This is where, if customers fail to use certain types of credit cards, they are slapped some fee (Tims, 2008). This hinders customer who cannot afford to pay such extra fees, from enjoying their rights as human beings. To decide whether an action is right or wrong, ethical relativism theory can be used, based on the moral norms that respects the culture of a person’s society (Shomali, 2001). This means that an action can be perceived to be ethically right in one society but wrong in another society. Contrary to Kantian deontology, this theory argues that there is no universal law when it comes to assessment of a set of maxim (Jhingran, 2001). Any kind of moral controversy should be assessed and addressed within the members of a society by reaching an agreement (Jhingran, 2001). Nonetheless, while moral practices may differ from one society to the other, there is a commonality in the principles that constitute these actions (Shomali, 2001). Therefore, while every society recognizes that certain practices are considered wrong; individual from the same cultural background can have divergent moral beliefs and this determines whether these practices are right or right (Shomali, 2001). Having said this, it is certainly easy to argue that most of the actions of Raynair resemble what most of the societies can deem unethical. For example, the criticism that the company has received from UK, is certainly be criticized in any society that values human rights and justice. In this case, the company is criticized for two reasons. First, because of using optional and non-optional fees to exploit UK passengers by charging them more in Pounds Sterling, and second, for exploiting a family of five 300 Euros to print their boarding passes at check-in. although the company officials reportedly defended these actions by citing its terms and conditions, this recent backlash is a manifestation that Raynair is devoted to further its unethical practices (Budget Airline Watch., 2012). It is ideally not correct for Raynair to use a conversion of ?1 to 1 Euro for its optional and non-optional fees when charging UK passengers. This policy is certainly unfair to passengers who are flying out of UK. Furthermore, this unfair charging is creating a hard time for those who are not able to access a functioning printer at their holiday resort. Generally, these actions resemble what most societies deem as wrong and hence unethical. There is an obvious moral issue when Raynair results to all manner of treatment on its customers and employees provided that it saves on some cost (George, 2009). The idea is that Raynair is attempting to play dirty tricks in order to survive the competitive airline industry, without minding what it will cost to achieve this goal. These actions can be considered to be unethical based on Kantian deontology, because the customers are not treated with respect and they are used as a means to reach an end. Conclusion This paper has discussed various ethical theories that are relevant in explaining the situation of Raynair’s business, including Kantian deontology, utilitarianism’s pursuit of happiness, Rawl’s and Nozick’s definition of justice, and human rights and ethical relativism’s belief (Shaw, 2010). These philosophers have provided a wide range of academic literature, which acts a guide on issues of business ethics. The people on the receiving end of all these charges are the customers of the company. This has left very many customers complaining about the suitability of most of the charges imposed by the airline company. Naturally, what Raynair is doing by purporting to charge very low fare on heir airline and then recouping the lost money by introducing numerous and strange charges is unethical , as it leads to being unfaithful to the customers whose interest should be protected. In other words, making the customers to believe that they are being offered big discount while the truth of the matter is that this is a strategy to merely entice them is unethical and uncalled –for. What’s more, such a strategy gives the company an opportunity to pursue its unscrupulous activities of exploiting the customers. Most business Code of Ethics declares that companies should foster trust in their business strategy, by striving to uphold good faith and fair dealing as well as desisting from deception in product/service pricing. In general, for Raynair to uphold ethics in its activities, it should uphold honesty by being forthright while dealing with customers including being truthful in all situations and at all times. References Budget Airline Watch., 2012. Ryanair unethical practices: is the worm turning against the budget airline? (Online) Available from: [accessed 1 July 2013]. Friedman, M. (1970). The Social Responsibility of Business is to Increase Its Profits. The New York Times Magazine (Online) Available from: [accessed 1 July 2013]. Gallagher, S. A., 2005. Strategic response to Friedman’s critique of business ethics. Journal of Business Strategy, 26(6), pp. 55-60. George, R., 2009. Business ethics. New Jersey: Prentice Hall. Holzhey, H., & Mudroch, V., 2005. 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