RYANAIR HOLDINGS, PLC (CASE STUDY - 2011)

RYANAIR HOLDINGS, PLC (CASE STUDY - 2011)

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  RYANAIR HOLDINGS, PLC CaseStudy - 2011 Presented to: Lecturer Atique Ahmad Presented by: Syed Faizan Jaffri – L4F13MCOM2001 NOVEMBER 11, 2015
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  CONTENTS Overview of Ryanair.........................................................................................................................................................1 Vision............................................................................................................................................................................1 Mission..........................................................................................................................................................................1 BusinessStrategy ..............................................................................................................................................................1 Operations.....................................................................................................................................................................1 Use of Boeing Aircrafts 737 – 800...........................................................................................................................1 Use of secondary, regional airports ........................................................................................................................1 Extra fee at airport services.....................................................................................................................................1 Human Resource Management ....................................................................................................................................1 Customer Service..........................................................................................................................................................1 Ancillary Services.........................................................................................................................................................2 Internet services............................................................................................................................................................2 Environmental Analysis....................................................................................................................................................2 Economic factors......................................................................................................................................................2 Social factors............................................................................................................................................................2 Technological factors...............................................................................................................................................2 Legal factors.............................................................................................................................................................3 Environmental factor - SWOT .................................................................................................................................3
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  1 | Pa g e RAYNAIR HOLDINGS, PLC – 2011 OVERVIEW OF RYANAIR Ryanair was founded in 1985 by the Ryan family to provide scheduled passenger airline services between Ireland and the UK, as an alternative to the then state monopoly carrier, Aer Lingus. Initially, Ryanair was a full-service conventional airline, with two classes of seating, leasing three different types of aircraft. Ryanair‟s objective was to maintain its position as Europe‟s leading low-fares airline, operating frequent point-to-point flights on short-haul flights, mainly out of regional and secondary airports. The heart of its strategy was based on providing a no-frills service with low fares designed to stimulate demand, particularly from budget-conscious leisure and business travelers, who might otherwise have used alternative forms of transportation, or who might not have travelled at all. VISION “To firmly establish itself as Europe‟s low fare, schedule passenger airline through continued improvements and expanded offerings of its low fare service”. MISSION “To become Europe‟s most profitable low cost airline by rolling-out proven low fare, no-frills service in all markets in which we operate to the benefit of passengers, people and stake- holders”.
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  1 | Pa g e BUSINESS STRATEGY Ryanair’s business strategy is to minimize its cost and so increase their profits. Therefore, to achieve their objectives they have based five primary components; 1- Operations 2- Human Resource Management 3- Customer Services 4- Internet Services for customers 5- Ancillary services OPERATIONS USE OF BOEING AIRCRAFTS 737 – 800 - Availability of trained staff - Less Cost of maintenance - Easy handling of spare parts inventory USE OF SECONDARY, REGIONAL AIRPORTS - Outdoor boardings - Check in on internets - Low and traffic volume based fee EXTRA FEE AT AIRPORT SERVICES - Reduces the number of bags or luggage - Reduces the handling cost - Reduces the number of check in desks HUMAN RESOURCE MANAGEMENT - Introduction of productivity base incentive system - Outsourcing of ticketing and other airport services CUSTOMER SERVICE - Services substitution for cost saving purpose such as;
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  2 | Pa g e Reduction in free bags checking, meals, flights to major airports, with promising on- time departures/arrivals, fewer luggage loss etc ANCILLARY SERVICES Although Ryanair charge for ancillary services but these services attracts more customers as they are available at single platform. Ryanair knows that more the customers, lower the cost, higher the profits. - Ancillary services includes; Trip managements, Hotel reservations, car rentals, priority boardings, availability of food, infant equipments, sports and musical instruments - Teaming up with other service providers to make the services available at single platform INTERNET SERVICES Ryanair is providing internet services to its customers so they could be facilitated by connecting Ryanair online and enjoy the information and paid services while sitting home that also enables time savings and avoiding nick of the time issues. Environmental Analysis ECONOMIC FACTORS The major economic factor discussed in this case is fuel, and it has been discussed that fuel prices are instable where they are also been expected to be rise in coming year. So, this factor may effect Ryanair’s operations and strategies as the fuel is a major factor of airline-company’s cost. SOCIAL FACTORS There are many controversial things came up from the Ryanair that may impact socially on organizations credibility, such as advertisements controversies, differences in services provided and fee, as claimed by company. TECHNOLOGICAL FACTORS Technology is a very crucial factor to keep in mind while making strategy for any organization. It may help a company to leap ahead than the competitor as we as helps in saving cost.
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  3 | Pa g e In Ryanair’s case, the company as chosen those aircrafts, that are already been famous in the market, and also it has low maintenance cost, experienced crew can be find easily that reduces the training cost. LEGAL FACTORS One of the important external factor, legal factors include the issues with the governing bodies of EU governments as well as airlines and aviation governing bodies. Their rules and regulations may affect the organization’s strategies and operations and may also impact the cost and profits. ENVIRONMENTAL FACTOR - SWOT STRENGTHS - Ryanair Company has strength in ancillary services that has grown its profits with in short time as for airline-company. It can move on with offering more facilities with attractive packages. - Modern/Low Cost Fleet single aircraft type; average plane age 2.94 and no plane older than 8 years on fleet. - Profits increased by 25.6% from 2010-2011. - Traffic grew 8% to 72 million in 2011. WEAKNESSES - Bad Public Image due to controversial incidents, complaints filed against them by Advertising Standards Board (ASA) - Complex Fee System leading to customer dissatisfaction - Only arrive at secondary airports; no option for arrival at Primary Airports. - Weak in negotiation with employees unions thus company’s productivity base incentive strategy failed - OPPORTUNITIES - Success in ancillary services may lead the company to the new markets for joint ventures
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  4 | Pa g e - Open up their aviation repair service and flight training programs to operations outside the company. - Customer base is expected to grow up to 85 million passengers. - Chances to penetrate in new markets other than Europe THREATS - Airlines and aviation governing bodies’ rules on flying hours and aircraft regulations could increase future expenses. As company has already paid 88 million in claims last year due to the EU 261 regulations where the airline has to cover accommodations and compensation - Unpredictable and uncontrollability of rising fuel costs, regardless of hedging. - In the future legislation will require airlines to pay about €1.4 billion for emissions of carbon dioxide which will rise to €7 billion by 2020. - Increased competition from alternative forms of travel.