What Are the Key Success Factors in the European Airline Industry?

Ryanair sometimes get in trouble with bodies such as the Advertising Standard Authority (ASA) in the UK over differences between advertised and actual price - in fairness to Ryanair these are rare mistakes.

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.

Over 35 years ago, Rollin King and Herb Kelleher decided to create a different type of airline. They began with the simple notion: If you get your passengers to their destinations when they want to get there, on time and at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. They were right (Southwest Airlines, 2004)!

This section will examine each of the five competitive forces that are active in the European Airline Industry. In this instance the buyers in the industry will be taken as passengers. Fuel companies, aircraft manufacturers and employees are the suppliers. Substitutes stem from modes of transport that fall under land and sea transit. Potential entrants are any airlines based outside of Europe or newly founded airlines based in Europe.

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

* Market. The market is a huge weakness with the economic downturn and people flying less, they are having a harder time to keep the basic fares down low enough for people to fly.

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

The airline industry is interpreted as being very unstable due to the immediate reaction to tragedies. The airline industry was affected following the September 11th tragedy and it affected other industries indirectly. The airline industry plays a key role in

Though Ryan Air is a low cost airline which reserves seats free of cost and charges no fuel surcharge, there are plenty of hidden charges involved, a few of which are collected unethically.

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

Financial stability is possibly one of the biggest threats that can affect an airline in the long term. Although Aviation industry in general affected by external factors that would make it impossible for airline companies to main stability, some companies succeeded in their strategy and managed to avoid being in trouble. A case study about Southwest Airlines demonstrates the company’s strategy to keep the on-going successful operation in the mist of difficult times. Stability can make an airline in control of its destiny and they are able to make calculated decision and adjust their policies to enhance the business operation. Southwest Airlines developed a successful low cost model that proven that airlines can withstand any financial trouble. The airline strategy was purchasing a fleet of Boeing 737, a fuel efficient aircrafts and in the same time this meant that their staff wouldn’t require additional training, because they own the same type of aircraft omitting staff training from their balance sheet. Also, being a low cost carrier meant that the airline wouldn’t sell food on board of the aircraft as well as having only economy class seats in all their fleets, maximizing the number of passengers they’re carrying on single flight. In addition, the ticket price is essentially very cheap and they serve only short-haul destinations “point to

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.

It may be lower risk in in the aviation markets because of entry regulations that a high level of governmental barriers to open the freedom of flights, also the industry needs high fixed costs and assets of airline operation, but based on the increasing demand of travelers by air, it's given the high intensity of rivalry.

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