Ryanair: Its Vulnerability and Exposure to the Macroeconomic Environment

At the present time, the airline industry faces many cost pressures. The industry has made remarkable achievements in improving its efficiency. But cost pressures continue, from record high fuel prices to unjustified increases in charges from monopolistic airports, to further taxes imposed by governments (industryspotlight.org.uk). Higher costs inevitably lead to higher prices for airline passengers. Aviation is vital part of the United Kingdom. It is not only crucial in sponsoring almost 1 million jobs and £50 billion of GDP, providing around £8.7 billion in taxes to the Treasury of the country, but aviation is also fundamental to the success of economic benefits from air transport in the United Kingdom (Roberts-Hughes, 2014). Aviation supports exports, services, manufacturing, foreign direct investment and of course tourism. This sector gives us opportunity for the holidays and visits of family and friend in different parts of a country and also around the world.

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 multitude percentage growth of Ryanair, an ultra low cost Irish airline established in 1985 & operating to 185 destinations within the European Union depicts the above quote perfectly. In the last 30 years of its operations, Ryanair has emerged as the largest low cost carrier across Europe and Africa. The airline has been ranked as No 1 in coverage and customer service flying to more than 10mn customers annually & across 1600+ routes through its 73 bases. The following report covers the journey of Ryanair an Irish low-cost airline headquartered in Swords, Dublin, Ireland. Ryanair is a listed company in the Irish Stock Exchange (ISEQ), London Stock Exchange (LSE) and the NASDAQ.

Subject: Overview issues of Ryanair management and the actions should be taken to overcome the problem.

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)

Generally speaking, the launch strategy of Ryanair was not the best one for that moment in time. They began operations between Dublin and London, in a very saturated market, which was already served by two competing and very experienced companies owned by the governments:

In this report, we will start presenting the history of Ryanair airline. After this, we will discuss the competitive advantage of Ryanair, how they gain it and build it. And we will answer whether Ryanair was able to sustain its competitive advantage or not and why. Also, we will identify the competitive strategy that Ryanair pursued and we will list the

Berry, S., & Jia, P. (2010, August). Tracing the Woes: An Empirical Analysis of the Airline Industry. American Economic Association, 2(3), 1-43. Retrieved from http://www.jstor.org/stable/25760397

Ryanair was founded in 1985 with only two aircrafts and a single Dublin-London route . By 2010 Ryanair had transformed itself into Europe 's leading low cost airlines with 232 aircrafts flying to 153 destination. Ryan Air 's strategic objective has been to offer the lowest possible air fare to its passengers and strive towards becoming europe No.1 Low Cost airlines. In this paper we will explore and analyze Ryanair 's competitive position, strategic capabilities and sustainability of its strategies.

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

However, the airline recovered posting profits soon after. The enlargement of the European Union on 1 May 2004 opened the way to more new routes as Ryanair and other budget airlines tapped the markets of the EU accession countries.[16]

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

Ryanair is Europe’s leading low cost airline. It currently operates over 1600 flights per day to 180 destinations in 29 countries. It has achieved this through developing and marketing itself as Europe’s only ultra-low cost carrier (ULCC). This has seen its profits rise by 13% for the fiscal year ending 2013 to over €569million and its passenger traffic grow by 5% to over 79.3 million people, this being in spite of an increase in fuel cost by €292million.

“Since Ryanair pioneered its low cost operating model in Europe in the early 1990s, its passenger volumes and scheduled passenger revenues have increased significantly because it has substantially increased capacity and demand has been sufficient to match the increased capacity. Ryanair‘s annual booked passenger volume has grown from approximately 945,000 passengers in the calendar year 1992 to approximately 81.7 million passengers in the 2014 fiscal year”. (Ryainair,2014p4-8)

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