The Ryanair Business Model

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

The case study which I have decided to choose is Ryanair. The company began in 1985 by Christopher Ryan, Liam Lonergan and Tony Ryan the airline started with just 25 employees and 15 aircraft. In 1987 Ryanair purchased their first jet and began to fly to various destinations throughout Europe. In 1990 Ryanair accumulated losses of £20 Million and Michael O Leary was made Chief Executive of Ryanair. Michael O Leary wanted to make Ryanair a low cost airline which would provide cheap flights throughout Europe and use a low cost leadership strategy.

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)

Since Ryanair is looming their highest return-on-capital route, it was expected that, not to lose the passengers volumes, both airlines will start to offer lower fares and greater frequency of flights. It is not likely that BA and AL will try to match the exact prices of Ryanair because they have other factors that would influence their customer base to remain loyal. Also, the majority of their costs are fixed, making it difficult for them to quickly reduce their operating expenses without significant financial losses. Not only will BA and AL have to figure out ways to lower their costs, they will also need to reassess the limitations they have on their tickets. Ryanair is offering tickets without any restrictions, so even if BA and AL came close to their price, the customer may still choose Ryanair if the others do not make policy changes. They offer a variety of classes of service, from first to economy, while Ryanair has less complicated offer - one class on one type of plane. BA and AL were assuming that the deregulation of the airline industry, particularly in the United Kingdom, will allow them to expand their routes and cover more of their significant overhead. Some expected

Ryanair, originally an Irish low-cost airline and established by the Ryan family in the year of 1984 starting off with only 25 members of staff. Replicating the American Southwest airline business model and then officially relaunched in the year 1990. It has vastly grown from being a single-aircraft family operation into one of the world’s top leading airlines. Now Ryanair has reached 11,458 employees. The airline carries over 131 million passengers per annum on over 2,000 flights daily, from 86 different routes, flying to more than 205 destinations in 33 countries.

Ryanair is an Irish based airline company, headquartered in Dublin airport, Ireland. It was established in 1985, and since Ryanair has expanded from a small airline to serving 90.6 million passengers. It operates 1,800 flights a day connecting 200 destinations. (Ryanair Annual Report, 2015; (Ryanair)).

Set up in the year 1985 at a capital of 1 pound with a staff strength of 25, Ryanair is today the World’s favourite and most commonly used airline which operates more than 1,400 flights per day from 44 bases and 1100+ low fare routes across 27 countries, connecting 160 destinations. Ryanair operates a fleet of 250 new Boeing 737-800 aircraft and is expected to increase it by another 64 in 2 years. Ryanair currently has staff strength of more than 8,000 people. Its passenger base has been increasing

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

The airline industry has long been striking profitable deals with airports to keep certain routes open. Ryanair's business strategy is made up of four guiding principles: employ a single type of plane, constantly review overheads, turn aircrafts around quickly and abandon point’s schemes.

Ryan air’s success can be attributed to a few factors. First would be its ‘Ever-decreasing costs’ mantra, providing low cost, low fares and no frills carrier strategy while achieving operating efficiency and satisfying its customers which gives it a competitive advantage and cost leadership. It targets price sensitive customers and offers them the cheapest short haul service among all its competitors in the market. Ryanair gives much focus on keeping costs low and is constantly examining every area of its operation to implement cost reductions. The initiatives taken to keep costs low include:

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

Ryan air, an Irish airline started in 1985 by Ryan family with a capital share of £1 and a staff of 25. Over the past few years the company has shown tremendous ontogeny. Indeed it is Europe's largest low cost carrier and fastest growing airlines. Currently it’s operating more than 1,500 flights every day from over 50 bases and around 1400 low fare routes across 28 countries which connect 165 destinations.

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