Easyjet And Airjet: A Comparative Analysis Of Ryanair And Easyjet

Both, Ryanair and EasyJet, operate within the airline industry which is highly regulated and characterised by intrinsically high exogenous barriers of entry such as cost of technology and access to congested airports. Furthermore, the industry is prone to high costs due to external factors such as weather and safety provisions. Ryanair and EasyJet are both low cost carriers (LCC). Although the airline industry as a whole is predominantly stagnant with a relatively low growth rate, the opportunities within the LCC segment are ample (LCCs accounted for 13.5% growth rate1 over 2013-2014).

At first sight it seems that Ryanair and EasyJet pursue very similar strategies and that they compete mostly on price dimension. A deeper look, however, reveals

Ryanair’s 8.8. Furthermore, the load factor of EasyJet’s planes is 91.7% vs Ryanair’s 82.7%. Although Ryanair’s strategy is heavily dependent on economies of scale, it fails to outperform its main competitor in this area – EasyJet’s learning curve has steeper slope compared to that of Ryanair.

In conclusion, there are some similarities between Ryanair’s and EasyJet’s strategy, but there are also significant differences.

As Chris Zook suggests in his book ‘Profit from the Core’, a “sustained and profitable growth requires a strong, well-defined core”2. Over time Ryanair remained consistent with its strategy, kept its dominant market position but failed to reinforce the execution of its strategy and thus to maximise profits.

First, Ryanair should focus on improving the operating efficiency of its core business and increasing the service quality. The available seat miles indicator, indicates that Ryanair has stronger technical capabilities and idle capacity compared to its main competitor and thus high potential to generate higher revenues and profits. The capacity within the airline industry cannot be easily scaled and quickly adjusted to the demand. With this in mind, Ryanair should strive to achieve optimum utilisation of its aircraft capacity and realise economies of