Essay on The Development and Future Strategy of Ryanair

1365 Words Oct 30th, 2012 6 Pages
The development and future strategy of Ryanair

Ryanair became in 2009 the airline company which carry the most passengers in Europe. That is the result of its strategy which is based on a ‘no frills’ service in order to offer the lower prices. The business model of Ryanair is different from the classic carriers’ in the way that 20% of its revenue is generated from ancillary revenue, such as its “buy on board” program or extra fees for luggage. As we have seen above, the airline industry is very dynamic, and the apparition of alliances within the market forces Ryanair to stay competitive in its environment. Until now, the company did it very well by being emergent, its flexible structure and culture allowed Ryanair to be the number one
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However, Ryanair has many opportunities to expand its routes:
- Developing routes in Central and Eastern Europe, and benefit from the development of tourism and the uniformity of legislation due to the continued expansion of Europe
- Going to North Africa, as both tourists and North Africans immigrants in Europe are demanding for these flights. Today, there are no real low-cost flights for these destinations so Ryanair can capture market shares there.
- Increasing the frequency of its existing European routes. Ryanair is the airline with the highest fill rate on board of its flights (98% in 2009). Increasing the number of flights by route could change the mind of classic carriers’ passengers who need more flexible timings.
- Creating new routes in Europe, as many routes are still un-served by the low cost carriers, or served by only one low-cost airline. More and more passengers are attracted by the cheap and no frill option proposed by Ryanair.
- Connecting airports within its existing route network (“triangulation”)

Pushing the cost reduction

Ryanair is a pioneer of innovative cost reduction methods, such as its no refund policy and its choice to fly in secondary airports instead of the expensive primary ones. They constantly try to cut the costs of their operations, and some of the key factors of cutting the costs are:
- The common Fleet with the same Boeing 737
- Contracting out
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