British Airways And Ryanair And The Airline Industry

Ryanair was established in the year 1985 by the RYAN family and has grown from a small airline flying a short hop from Waterford to London, into one of the Europe’s largest carriers. The company expanded and within 4 years it had 350 employees, 14 aircraft, and carried 600,000 passengers a year. It is currently serving to 26 European Countries with 148 destinations. It operates on 794 different routes daily serving by more than 1050 flights in a day. It has totally 169 aircrafts running for different routes with 5986number of employees working in it However, Ryanair’s costs rose drastically and it recorded losses of £20 Million sover four years despite its growth. Although consumers were continuing to fly Ryanair

The strategic plan of Ryanair has been to establish itself as Europe’s leading low-fares airline.” Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.” (www.ryanair.com)

Low fares- This is a result of lower costs, enabling Ryanair to offer lower costs than their competitors. If Ryanair can replicate their current cost model which has proved so successful in the European market and transfer it into transatlantic routes, they could offer flights at a significant amount less than Delta and BA.

Ryanair is one of the largest airlines in terms of passenger numbers (REF) and has continuously grown in size and value over time as shown above. The extent of such an expanding firm is conveyed over the last eight years as Ryanair’s profits have more than quadrupled. However, there have been drops in profits in 2004 and 2008. In 2004, the airline was hugely affected by the conflicts in Iraq, the renewed threat of terrorism and endless increasing oil prices. However, in this same period, Ryanair managed to launch new bases in Rome and Barcelona, launch 73 new routes, takeover their competitor Buzz for a knock-down price and carry more passengers than BA in the European market. The reason for the decrease in profits in 2008 was due to increases in fuel prices and significantly increased airport charges, particularly at their largest bases at Stansted and Dublin.

Aim The aim of this report is to provide recommendation for how Ryanair can keep its continues growth and market in pursuing price cut and aggressive expansion in light of crippling fuel cost ,faltering demand of customer and global credit crisis challenging the airline industry in the European market.

The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisation’s external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate key strengths and any weaknesses that need dealing with. Finally, a SWOT analysis will be carried out to assess the extent to which Ryanair’s strategies are suitable to what is happening in its task environment.

Strengths – Ryanair is one of the largest European airline company and it keeps growing by launching new routes and opening new bases. Ryanair was the first company in reducing ticket costs and keep them low at all times. Low fares area key strength of the company and very big advantage over other airlines. Another strength of the company has a strong brand which means it’s widely recognised. Ryanair established in the European market share. The current market cap in millions is £17,729.86 according to London Stock Exchange. (Appendix 1) The last strength of Ryanair listed is the ability of landing in over 200 destinations on 33 countries.

A latest study of Oxford Economics showed that aviation’s contribution to the global economy sustains 57 million jobs and some $2.2 trillion in economic activity. They have predicted that this growth will increase 5% annually. [1] IATA AMC April 2013.

The airline industry is a buyers market were all somebody has to do is log onto another website to access alternative flights with another company. The power of suppliers in the airline industry is very strong also, as you can see in the newspapers there is a strike at Boeing and this has halted all airplane deliveries. This has a direct knock on effect to Ryanair that they can do nothing about. Each low cost airline is offering the same basic service however Ryanair have an advantage as they are currently offering 297 routes out of 107 airports but competition is strong. Areas such as customer service and branding are key to success.

This article is focusing on the Ryanair case study in addition to understand the main model and values in the strategic management field. In addition, Ryanair is founded in 1985 and it’s an Irish low cost airline which has become Europe most popular aviation providers (Eleanor, 2016).

During the last decades the civil aviation industry has been affected by a dualism: full service network airlines (e.g. Lufthansa) on one hand and low cost airlines (e.g. Ryanair) on the other. The low cost carrier (LCC) managements are focused on cost reduction in order to implement the lowest price possible in every market they operate (Macchiati and Piacentino, 2006). They follow a simple business strategy: achieve higher returns on assets and customers, by reducing the cost of operations to an absolute minimum. Low prices are attractive to the consumers and they improve the yield per passenger. In addiction, LCC sell a range of disaggregated optional services called ancillary services which produce ancillary revenues (Wilson,

Ryanair’s strategy is based on how they differentiate themselves as a lowest cost airline company by implementing cost

Ryanair’s goal was to hold its position as Europe’s leading low-fares airline, operating frequent multi-destination flights on short-haul flights, based mainly in regional and secondary airports. The strategy was based on a mission of

Airline industry has been faced with stiff competition due to the increased number of airline companies in the sector. The study will focus on the strategies that are deployed by Ryanair Airline Company, Air Berlin Company and Easy jet plc in ensuring that it meets with the competitiveness in the economy. The strategies for Ryanair Airline include; Low fare, Best Customer service, Short-haul route and destination, Reduction of operating costs, Internet services in its reservation system and Quality management. In the case of Air Berlin airline its strategies comprises of high service standards, blanket coverage, market positioning

The strategy of Ryanair is partly described in the summary of this report. In the following points it will become clearer how this strategy is built up by using