Ryanair: European Pioneer of Budget Airline Travel

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

Cathal Ryan and Declan Ryan have started Ryanair since 1985. For nearly a year, Ryanair had operated a 14-seat turboprop between Waterford and Gatwick Airport on the outskirts of London. The airline targeted low-fare segment market. It initiated service from London’s secondary airports. In terms of competition, Waterford and Gatwick didn’t pose any challenges.

A unique cost cutting policy would be the main core competence of Ryanair. It refuses to provide any meal vouchers or hotel accommodation for flights which are delayed or cancelled for reasons beyong Ryanair’s control in order to reduce the operating cost. (Ryanair, 2011) Meanwhile, Ryanair is using LFA business model to design the size of its

Michael O Leary uses a centralized management style in the company which is also used a functional structure. The organisation structure of Ryanair is tall. As illustrated in my diagram Michael O Leary is the CEO of Ryanair and he deals directly with the chief financial officer, head of marketing, head of customer service, head of pilots union and all the other departments displayed in the structure. A functional structure is a structure that groups people in different departments or functions because they all share common skills or they can make use of the same resources. The members of these teams working in these different departments become very skilled and become more specialized within each function. My reason for choosing functional structure for Ryanair is that there no real hierarchy in the organisation, this improves the channels of communication and ensure there is no confusion. Michael O Leary makes the decisions in the firm and uses a very hands on approach in the business by dealing with other managers in the business on a day to day basis. If any problems are ever encountered Michael O Leary would deal with the problems internally. Staff within the company are also matched with their expertise and assigned to a certain group such as marketing, finance etc. A functional structure helps organisations to group tasks into functions to increase their effectiveness in which the company will be allowed to reach their company goals such as providing customers with cheap flights with excellent customer service. As Ryanair grows in size there may well be more departments added to the structure as there will be more employees and more roles and responsibilities to be

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)

Summary: Ryanair was founded in 1985 by the Ryan family to provide scheduled passenger airline services between Ireland and the UK, as an alternative to the then state monopoly carrier, Aer Lingus. It started out a full service conventional airline, with two classes of seating and leasing three different types of aircraft. However, despite growth in the passenger volumes financial problems were of a growing concern.

using their own core competencies to turn the airline around. By applying their own strategies,

Ryanair consists of a centralised functional organisational structure. Normally, employees positioned within a centralised functional

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

Michael O’Leary, Ryanair’s charismatic boss and one of the most successful business man in the world. Starting from a single plane company, in about 30 years he has made Ryanair the largest airline in Europe. With turnover of €5 billion and a profit of €591.4 million in 2014 (Ryanair on top1000.). He achieved this through his masterful leadership and with an attractive business model with central focus on cheap costs. So how did Michael O’Leary

Prior to 1991, Ryanair had suffered from continuous losses from 1985 to 1989. The first reason that put it into this situation was that it tried to position itself as a low fare airline with the first rate services. It tried to keep low and unrestricted fare, while keep focusing on the best customer service and relationship. This mixed model was proven inefficiency. The low price could lure number of

Ryanair is Europe’s largest low-fares, no-frills short-haul carrier. The organisation was founded in 1985 as a conventional airline but re-launched itself in 1990/1991 as a low-cost carrier, replicating American Southwest Airlines’ business model. Since then Ryanair has grown

1. In-depth environmental analysis of the European Airline industry and discuss the implications for the budget sector and especially for Ryanair. 2. An integrated understanding of the functioning of a company – its human and technical operations, leadership, customer relationships and financial structure. 3. Implications of the internal functioning to create viable strategic positioning and discuss any changes to Ryanair’s approach to ensure an improved sustainability 4. Evaluate the strategic leadership style of Michael O’Leary

The objective of this report is to appraise and evaluate the external environment, internal capabilities of Ryanair and assess the competitive environment. This project report also evaluates the marketing focus deployed by Ryanair in the year 2009 when the airline achieved a benchmark by being Europe’s largest carrier by passenger numbers and market capitalisation.

However some operators have reversed this, and are paid by local governments to land at some airports, as they expect to gain economic benefits from this.