Ryanair case study

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)

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:

The Board of Ryanair is answerable for the administration, vital bearing and by and large administration of the Group. The Board 's essential center is on

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.

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

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

Ploy: It is basically plotting against the competitors. Here, Ryanair can dissuade other companies in the market and discourage or encourage them to do things that eventually turn out to be beneficial for them.

This is an ‘Ethics Audit Report’ prepared based on the operations of Ryan Air studied from various videos available on You Tube and the public documents disclosed by Ryanair.

Ryanair incorporated at no-frills, low-cost, quick to reach consumers destinations in a much modernized aviation industry. For instance, it is more cheaply, and more reliable, than any other airline including British Airways. They do not compromise on safety, top-drawer punctuality, near perfect baggage handling and efficient ‘green’ policy. The target markets of this particular airline are those who compromises on comfort and fare conscious customers. For example: Students, low-income earners, busy businessmen, and family (Ryanair.com). On the other hand, British Airways strategy is to become the world’s leading global premium airline by making cost that is base more efficiently and focus on outstanding customer service, which is a critical part of their strategy. The 5 strategy goals are to be the airline of choice for long haul premium customers, deliver and outstanding service for customers at every touch point, grow their presence in key global cities, build on the leading position in London and meet customers’ needs and improve margins through new revenue streams (British Airways PLC .com). The target market of British Airways is leisure travellers, consumers who want comfort and cost is not an issue (marketingmagazine.co.uk). Both aviation companies are customers based but they do differ from each other in their operation strategy.

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.

Ryanair positioned itself as a low cost airline, which delivered services equivalent to that of British Airways and Aer Lingus. In terms of service quality, they positioned themselves in the same category as the aforementioned airlines, but at the same time, charging a relatively low price when compared to British Airways and Aer Lingus. Their strategy was to deliver first rate/ good quality customer services and offer meals and amenities comparable to that of British Airways and Aer Lingus. The second strategy was to charge a single fare ticket of I£98 on it Dublin-London service, which was very low when compared to British Airways and Aer Lingus’s rate of I£208 or I£99 if booked in advance.

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

We will see how Ryanair was successful as world’s one of the most favoured low-fare airline and how did it apply each of this mix by putting in the