Ryanair began in 1985 operating a small 15-seat aircraft for scheduled passenger flights between Waterford and London. Through the 1990s, Ryanair grew but costs were rising. In response, Ryanair reorganized as a no-frills airline, reorganized its fleet and pricing structure. Since then, Ryanair has continued expanding its route network while keeping costs low through measures like charging for services that were previously free. However, this strategy has also led to criticism and conflicts with airports and governments over fees.
Today, most of the organizations quite advanced in involving multiple applications of strategic management.
In this paper I have tried to describe an effective and working Ryanair’s competitive strategy, approach and factors have accounted for Ryanair’s success. I also analyzed what are Ryanair’s distinctive capabilities and how they are implementing various strategies to attract and retain customers.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
A SWOT analysis of an airline - RYANAIR
This analysis is self analysis using few references on the airline for studying its SWOT aspect.
SWOT - Strengths, Weakness, Opportunities,
Today, most of the organizations quite advanced in involving multiple applications of strategic management.
In this paper I have tried to describe an effective and working Ryanair’s competitive strategy, approach and factors have accounted for Ryanair’s success. I also analyzed what are Ryanair’s distinctive capabilities and how they are implementing various strategies to attract and retain customers.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service.
Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies.
A SWOT analysis of an airline - RYANAIR
This analysis is self analysis using few references on the airline for studying its SWOT aspect.
SWOT - Strengths, Weakness, Opportunities,
Ryanair Airline Case study
Europe's cheapest airline, best services at the lowest rates
Customer Strategic MAnagement, SWAT Analysis, TAWS analysis, PESTEL Analysis, porters 5 force analysis, Value Chain, BCG Matrix,
Description of the strategy (business model) of Low Cost Carrier Ryanair. Focussing on the value proposition, value architecture, revenue model and corporate culture and values.
Analysis of the profit function of Ryanair, Europe's biggest airline and a worldwide innovator on cost leadership.
For this analysis I first built a revenue and a cost function. Then, I used some real life examples to back up how the airline's pricing system works.
Ryanair - Accounting, finance & control projectfilippo cheli
This document shows our work on the most important low fares company for the accounting, finance & control project.
There are three sections:
1. financial analysis
2. benchmarking
3. conclusion
Case Study Ryanair Business Strategy Analysis Ryanair is .docxbartholomeocoombs
Case Study: Ryanair Business Strategy Analysis
Ryanair is an Irish low-cost airline headquartered in Dublin, founded in 1985. It
operates 181 aircraft over 729 routes across Europe and North Africa from 31 bases.
Ryanair has seen large success over recent years due to its low-cost business
model and has become the world’s largest airline in terms of international passenger
numbers. Taking Porter’s generic business strategies into consideration, Ryanair
operates a cost-leadership strategy to drive itself into achieving its mission of being
the leading European low-cost carrier (LCC). Throughout this essay the business
strategy of Ryanair will be analysed and the sustainability of their model evaluated.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled
passenger airline through continued improvements and expanded offerings of its low-
fares service. Considering their objectives and mission, Ryanair’s decision on their cost-
leadership strategy was based on a few main factors discussed below.
A major influence was the deregulation of the airline industry in 1978, which removed
government intervention within the European continent. Under the new rules, routes
and fare decisions were made by individual airlines which meant that they could
compete on other factors besides food, cabin crew and frequency. As a result of
deregulation, a large number of new airline start-ups emerged within the EU and
competition among airlines increased dramatically resulting in downward price
pressures. Ryanair was established to take full advantage of these market conditions.
By offering low prices, Ryanair entered a huge and virtually unlimited market.
Having seen the major success of the low-cost carrier Southwest in the United States,
Ryanair decided to follow in their footsteps by establishing an LCC for the European
continent that targeted fare-conscious leisure travellers and regular low cost business
travelers. By doing this Ryanair became the first low-fare airline in Europe. However,
they took the Southwest model further by offering no drinks and snacks at all and
abolishing the frequent flyer program that Southwest now offers its customers.
The evaluation of Porters five forces influenced Ryanair’s choice of a cost-leadership
strategy, as the threat presented by new entrants and the threat of substitutes could
hinder their success. The threat of new entrants is high within the aviation industry
which meant that low fares would help drive away any further competition. The threat
of substitutes to Ryanair had to also be carefully examined. Their primary market,
Europe, had the availability of high speed trains and car holidays. For Ryanair to be
successful, prices had to be low to attract the public, and resist strong
competition from substitutes like Eurostar.
As Europe’s largest low fare airline, Ryanair’s competitive advantage remains in their
abil.
Ryanair Airline Case study
Europe's cheapest airline, best services at the lowest rates
Customer Strategic MAnagement, SWAT Analysis, TAWS analysis, PESTEL Analysis, porters 5 force analysis, Value Chain, BCG Matrix,
Description of the strategy (business model) of Low Cost Carrier Ryanair. Focussing on the value proposition, value architecture, revenue model and corporate culture and values.
Analysis of the profit function of Ryanair, Europe's biggest airline and a worldwide innovator on cost leadership.
For this analysis I first built a revenue and a cost function. Then, I used some real life examples to back up how the airline's pricing system works.
Ryanair - Accounting, finance & control projectfilippo cheli
This document shows our work on the most important low fares company for the accounting, finance & control project.
There are three sections:
1. financial analysis
2. benchmarking
3. conclusion
Case Study Ryanair Business Strategy Analysis Ryanair is .docxbartholomeocoombs
Case Study: Ryanair Business Strategy Analysis
Ryanair is an Irish low-cost airline headquartered in Dublin, founded in 1985. It
operates 181 aircraft over 729 routes across Europe and North Africa from 31 bases.
Ryanair has seen large success over recent years due to its low-cost business
model and has become the world’s largest airline in terms of international passenger
numbers. Taking Porter’s generic business strategies into consideration, Ryanair
operates a cost-leadership strategy to drive itself into achieving its mission of being
the leading European low-cost carrier (LCC). Throughout this essay the business
strategy of Ryanair will be analysed and the sustainability of their model evaluated.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled
passenger airline through continued improvements and expanded offerings of its low-
fares service. Considering their objectives and mission, Ryanair’s decision on their cost-
leadership strategy was based on a few main factors discussed below.
A major influence was the deregulation of the airline industry in 1978, which removed
government intervention within the European continent. Under the new rules, routes
and fare decisions were made by individual airlines which meant that they could
compete on other factors besides food, cabin crew and frequency. As a result of
deregulation, a large number of new airline start-ups emerged within the EU and
competition among airlines increased dramatically resulting in downward price
pressures. Ryanair was established to take full advantage of these market conditions.
By offering low prices, Ryanair entered a huge and virtually unlimited market.
Having seen the major success of the low-cost carrier Southwest in the United States,
Ryanair decided to follow in their footsteps by establishing an LCC for the European
continent that targeted fare-conscious leisure travellers and regular low cost business
travelers. By doing this Ryanair became the first low-fare airline in Europe. However,
they took the Southwest model further by offering no drinks and snacks at all and
abolishing the frequent flyer program that Southwest now offers its customers.
The evaluation of Porters five forces influenced Ryanair’s choice of a cost-leadership
strategy, as the threat presented by new entrants and the threat of substitutes could
hinder their success. The threat of new entrants is high within the aviation industry
which meant that low fares would help drive away any further competition. The threat
of substitutes to Ryanair had to also be carefully examined. Their primary market,
Europe, had the availability of high speed trains and car holidays. For Ryanair to be
successful, prices had to be low to attract the public, and resist strong
competition from substitutes like Eurostar.
As Europe’s largest low fare airline, Ryanair’s competitive advantage remains in their
abil.
DCF valuation of Ryanair as of May 2018. The project was part of the final assignment of the Corporate Financial Modelling course at Brandeis University.
Virgin Atlantic, Marketing, External Environment, Internal Environment, Porter's Five forces Model, IIFM, Indian institute Of Forest Management, Richard Branson
This presentation by Brian Pearce from IATA was made during a roundtable discussion on airline competition held at the 121th meeting of the OECD Competition Committee on 19 June 2014. Find out more at http://www.oecd.org/daf/competition/airlinecompetition.htm
Table of Contents
1. Foreword 2
2. Executive summary 3
3. The European airline industry 6
Comparison of business models 6
Market overview 7
Changes in regulation 10
Opportunities and challenges 11
4. Scenarios for European network carrier in 2015 15
Network Fortress 16
Europe under Siege 19
Decline of Champions 21
New Horizons 23
5. Strategic implications for European network carrier 26
6. Methodology 27
7. Contacts 32
8. HHL Center for Scenario Planning 33
9. References 34
3. History Ryanair (1985)
Scheduled passenger airline service from Waterford to London-Gatwick
15 seater turbo prop
Full service conventional airline
Leasing three different types of aircraft
1986 Dublin - London for £ 95 (Aer Lingus/BA charges £ 209)
4. 1990’s
The company continued to grow,
but costs started to go out of
control. In 1989, they had 4
different types of planes, 350 staff,
600,000 passengers but were
£20m in the red.
5. What did Ryanair do?
- No frills airline
- Reorganised the fleet of planes
- Reorganised the pricing structure
6.
7.
8.
9. September 2009
Ryanair says farewell to Manchester
(9 out of 10 flights have been cancelled due to a
dispute about landingfees)
10. www.ryanair.com
13.10.10
RYANAIR ANNOUNCES CLOSURE OF MARSEILLE BASE
4 AIRCRAFT, 13 ROUTES, 200 JOBS LOST AT MARSEILLE, AS AIRCRAFT
AND JOBS SWITCH TO SPAIN AND ITALY
Speaking today in Marseille, Ryanair’s Michael O’Leary said:
“We are very disappointed at this decision by the French
authorities to initiate proceedings against Ryanair’s base
in Marseille, which complies fully with EU regulations for
mobile transport workers. These are not French jobs, but
rather Irish jobs on Irish aircraft, which are defined by EU
regulations as Irish territory. All of these people pay their
tax and social insurance, in accordance with EU
regulations, in Ireland and they remain fully tax
compliant.
11.
12. Ryanair’s Philosophy
Ryanair promises: „low fares, good on- time record,
few cancellations & few lost bags - if you want
anything more- go away“
Example of arrogance: “Will we give you a refund on
a nonrefundable ticket because your granny died
unexpectedly?” he asked. “No! Go away. We’re not
interested in your sob stories! What part of ‘no
refund’ do you not understand?”
13. *******236.20 EUR Taxes, Fees & Charges
********50.00 EUR Passenger Fee: Web Check in
********30.00 EUR Passenger Fee: Checked Bag(s)
********50.00 EUR Passenger Fee: Administration Fee
Ryanair now
*******891.10 EUR Total Paid
“ No-frills“ strategy, reduce as much costs as
possible, few or no customer service
Biggest „Low Fare“ airline within Europe
32 bases 800+ low fare routes
Operating in 26 countries
Connecting 146 destinations
14. Production process
Input
Throughput Output
Raw material price goes up (input).
Price of product goes up (output).
Ryanair adopts the concept of allocative efficiency
15. Latest Developments in Ryanair (2005 -
2010)
Personnel are not allowed to charge up their mobile phones at the office
Personnel have to pay for their own uniform, food and
(educational) courses
If the passenger wants a certain seat then she/he has to pay for
it.
Ryanair has asked Boeing to study the option of “standing’
places on the plane
Per June 2010 ther e will be vending machines on board (to reduce cabin
personnel)
Extra baggage will cost Euro 20.- in the future
Onboard toilets will be installed with coinslots
17. Strategic => Strategy
“The direction and scope
of an organisation over the long term, which achieves
advantage for the organisation through its configuration of
resources within a changing environment and to fulfil
stakeholder expectations”
18. Positioning
The way the product is defined by consumers on important
attributes.
=> the place the product occupies in consumers’ minds
relative to competing products
19. A Positioning Strategy =
Concerned with creating and maintaining distinctive
differences that will be noticed and valued by
customers
20. Passenger costs of landing on Schiphol (2008)
- Landing € 4.06
- Noise markup € 1.30
- Navigation costs € 2.42
- Passenger service charge € 13.46 (point to point)
- Security € 17.47 (point to point)
- Fly tax € 11.25 (point to point)
- Passenger service charge € 5.65 (transit)
- Security € 9.79 (transit)
- Fly tax € 0 (transit)
- Total amount for point to point - €48.96
- Total amount for transit - € 22.22
- => Price bundling
21. Strategic Positioning:
Is concerned with the impact the external
environment, internal resources/competences and
expectations/influence of stakeholders have on
strategy
22. What changes are going on in the environment and
how will they affect the organisation and its
activities? (opportunities and threats -provide a view
of the key environmental impacts on the
organisation)
23. What are the resources and competences of the
organisation and can these provide special
advantages or yield new opportunities? (strenghts
and weakness –strategic capability– provide a view
of the internal influences and limitations on strategic
choices for the future)
24. What is it that the stakeholders aspire to, and how
do these affect what is expected for the future
development of the organisation?
25. Expectations
Case 2 & Theory Resources&
& Purposes
The
Competencies
Environment
Strategic
Positions
Corporate
Strategic Strategy into
level Organizing
Choices Action
strategies
Development, Managing
Business
directions & Change Enabling
level
Methods
strategies
26. Low Cost Carriers and Flag Carriers
2010
Ryanair 72 million passengers
Easyjet 49 million passengers
KLM 21 million passengers
Air France 50 million passengers
Lufthansa 90 million passengers
27. Airline to halve Newquay flights
Ryanair says 100,000 fewer people will come to Cornwall
Low cost airline Ryanair is halving the number of
flights to and from Cornwall in protest at the county
council's new passenger surcharge.
The airline claims that the £5 per person charge is a "draconian anti-tourist
tax".
Airport owner Cornwall County Council said the levy of up to £5 on all
departures was needed to ease its losses of more than £1m a year.
28. Criticism over Ryanair terror ad
The ad appears in a number of national papers
An advert for low cost airline Ryanair which refers to
the London bombings has received almost 200
complaints.
It features Winston Churchill saying: "We shall fly
them to the beaches, we shall fly them to the hills, we
shall fly them to London!"
The Advertising Standards Authority has received 192
complaints that it was crass or offensive and is
considering whether to investigate.
But Ryanair said it was stimulating the tourism
market after the attacks.
29. Budget airlines attack fee rise
Increases in airport charges could help fund a new runway
Budget airlines Easyjet and Ryanair have
condemned a planned increase in charges at
Stansted Airport in Essex.
Luton-based Easyjet and Ryanair, who say they account for
about 80% of Stansted's passengers, said the charges are
set to rise by almost 300%.
This comes despite the British Airports Authority (BAA),
which runs Stansted, seeing its profits rise by 19%,
30.
31.
32. M. O’Leary
“Any fool can sell low airfares and lose money! The
difficult bit is to sell the lowest airfares and make
profits.
If you don’t make profits, you can’t lower your
airfares or reward your people or invest in new
aircrafts or take on the BA and Lufthansa’s!”
33. Latest news
Per 1 january 2011 the German government has
imposed a flight tax (8 Euro for domestic flights and
25 Euro for european flights).
?
As a consequence Ryainair has cancelled 13 flight
routes from Weeze (Germany) and from other
german airports.
36. Relation to airline market
• Competition would be suicide.
• Ryanair searches for new
markets(price,geographically)
• Traditional airlines and other (big)discounters
don’t have to be afraid.
38. Game theory
Core assumptions
I’m in the arena for my own benefit
Interdependant relationship with other
competitors
Aware that we are dependant upon each other
39. The Rise of SkyEurope
(what is more rational than a pricefighter in a low
cost country)
40. The first price fighter airline
in Central Europe
6 september 2001
Slovakia has their
own air carrier
41. 6 September 2001 – SkyEurope Airlines was registered
11 September 2001 – World Trade Centre in New York became a
heap of rubble
The biggest crisis in the airline industry followed
How would you feel standing in the shoes of C. Mandl and A.
Skowronek?
42. Good idea to stop
Save yourself going bankrupt
Save your name
Try again in 5 years time
43.
44. The 11 Sept. attacks were a blessing in disguise
Aeroplanes became cheaper to buy
Pilots were cheaper
Slots were available at the main European airports
ABN Amro wanted to finance SkyEurope
46. What was happening in the
“air transport” industry
Aeroplanes became cheaper
(supplier power)
Pilots became cheaper
Slots were available at international airports like
Schiphol and Orly (competitive rivalry)
Demand diminished due to fear of flying (buyer
power)
Rail, ship and road transport grew (substitutes)
47. Threat of Entry (barriers)
Economies of Scale – decline in unit cost of airtransport as the absolute
volume per period increases
Product differentiation – being the first, brand identification, customer
loyalty
Capital Requirements
Switching costs – one time costs facing the buyer of switching from one
supplier’s product to another’s
Access to distribution channels
Cost disadvantage independant of scale – locations, govt. Subsidies,
experience curve
Government policy
48. Why start in Slovakia?
after the split of Tsjecho-Slovakia in 1993, there was no
national airline
this meant no competition in the market (easy startup)
there were no connections with main European hubs like
Amsterdam, London and Paris
no connection between Bratislava and Kosice (2nd city)
while there was a demand
Bratislava is 50 km. From Vienna (big flow of customers
from Austria)