Ryanair

RYANAIREuropean Pioneer of Budget

Airline Travel

Saranya M.Bino Joseph

Sivaraj G.George Yacub

April 8, 2023 2

Overview Of The Company

Europe’s leading budget carrier

Stuck to the low cost /low fare model

Started in 1985 to provide scheduled airline services between Ireland and the UK

Most profitable airline in the world on the basis of operating and net profit margins

Successful acquisition of Buzz- small budget and short haul carrier

Delivered 12 % increase in profit , despite a 74 % increase in fuel costs

Ancillary revenue grew by 36%

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Ryanair’s Stratagems

Ancillary Revenue

Low Fares

No Frills

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Issues At Ryanair•Extra capacity building would create uncertainty about the success of new routes and locationsRisks & Challenges

•Vulnerable to rising fuel prices•Represents 35 % of the operating costsFuel Prices•Regulation by the European UnionCompensation To

Passengers

•Added risks and costs to the industryTerrorism & Security

•IR with pilots was fraught•Unions were not recognisedIndustrial Relations

•Poor staff moraleSafety Issues

•Voted world’s least preferred airlineCustomer Services

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Strengths•Low cost leader•Innovative cost

reductions•1st mover advantage•Established market

share•Range of ancillary

services

Weaknesses• Refused to recognise unions• Volatile customer relations• Dependence on Michael O’Leary• Antagonistic relationship with competitors

Opportunities• Further growth• Advanced cost reduction• EU expansion• Tourist destinations

Threats•Increased

competition•New low cost

entrants•Alliance/Mergers

between competitors

•Industry criticism•Substitute

Transportation•Cars, Buses•Speed Trains

SWOT Analysis

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Critical Success Factors

Continuously concentrates on driving down its costs to offer the

lowest fares possible and

remain profitable

Offers minimum standards of service and

very low prices for point-to-point, short haul flights

Strategic focus of having the lowest

prices, being reliable within the

marketplace, comfort and service and frequency

Eliminated extras such as in-flight meals, advance seat assignment,

free drinks and other services

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Ryanair Route

Map

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European Competitors

easyJet •Greatest rival – frequently attacked each other as part of their public relations•Different business model- used more centrally located airports•Struggled on the profit front

Air Berlin •Business model – instead of point to point connections , it offered guaranteed connections via its hubs•“low fare alliances” – with Niki

bmibaby •Subsidary of bmi British Midland•Leading low cost carriers in the Midlands and Northern England

FlyBE •Incorporated aspects of budget airline model

Aer Lingus•Short and long haul services•On the verge of bankruptcy by 2001•Achieves more than 3 times the short haul passengers eventhough their fares are slightly high•Was offered a bid for a merger with Ryanair

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Cost Reduction Strategy

Fleet commonalit

y

Contracting out services

Airport charges and route policies

Managed staff costs and

productivity

Managed marketing

costs

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Ryanair’s Positioning Strategy

Price Leader Premium Competitive

Features Original Customised Basic

Quality Excellent Average Acceptable

Support Comprehensive Standard Minimal

Availability Restricted Selective Universal

Reputation Prestigious Respected Functional

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Corporate Level Strategy

Global Strategy

Transnational Strategy

International Strategy

Multidomestic Strategy

Need f

or

glo

bal

inte

gra

tion

Need for local responsiveness

High

High

Low

Low

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Suggestions

Expand into central & eastern Europe

• Convert web traffic into e-commerce & advertising revenues

Continue aggressive acquisition

Increase ancillary revenues – focus on after-sales

Overhaul the customer service

Develop the smaller operating bases

Internet ticketing

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