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Strategic analysis ryanair
Ryanair business analysis
Strategic capabilities of Ryanair
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This report is based on Ryanair Holdings PLC which was established in 1985. “Ryanair obtains permission from the regulatory authorities to challenge the British Airways and Aer Lingus' high fare duopoly on the Dublin-London route. Services are launched with two (46-seater) turbo prop BAE748 aircraft” (Ryanair, ND). Ryanair Holdings PLC is an Ireland based airline which is the largest low fare airline with 32 bases & over 800 low fare routes across 26 countries, connecting 146 destinations. Ryanair fleets are made up of 196 Boeing 737-800 crafts with a seating capacity of 189 seats. Its aims are to deliver a further 102 aircrafts over the next 3 years. Ryanair currently employs more than 6,000 people and expects to carry over 67 million passengers this year. This report is giving me the chance to highlight Ryanair’s strengths, weakness, opportunities and threats which they face …show more content…
This alone is one of the company’s strongest selling points. It carries around 34 million passengers a year across 107 locations round Europe, totalling some 266 routes. The company has a leading market share on most UK and Ireland routes and around 43 percent of all Dublin-London and 45 percent of all other Dublin passenger loads. The ‘no-frills’ strategy resulted in the increase of customers and expansion of their operations, wherein the staff increased from an initial 57 to an amazing 3,400 staff and almost 37 million passengers.
Ryanair has a strong business strategy, which capitalizes on a number of key advantages: fare-conscious leisure and business travelers, sales of one-way seats based on changing demand, the use of secondary airports, which are cheaper and less congested and the signing of multi-year, third party outsourcing agreements. These have enabled the company to overtake more traditional competitors in the market and provides for strong long-term growth
The following value chain, which focuses on Spirit Airlines, is representative of most of the firms in the Ultra Low-Cost Airline industry. Spirit is the industry leader in many areas such as operational efficiencies/cost structure, aircraft fleet management, brand/network and growth. The firm, however, trails industry foes in areas such as customer service and operational reliability and recoverability. While most in this segment pursue the cost-leader competitive strategy, Spirit has demonstrated the most effective model to date – whether the model is the most sustainable remains to be seen.
The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.
EasyJet’s provision of low cost flights and it basis of “the earlier you book the ticket, the less you pay“ gives it opportunity to target its customers. EasyJet also provides a number of aircrafts in various airports thus easily accessibility of their services; this acts as it drivers in the market control and competitive advantage. It also has the advantage of providing other services such as car hiring, internet services and restaurants (Saleem, 2010). The ‘Europe by easy jet’ established a resounding brand positioning that is effective across all the main markets and enhanced visits to easyJet.com. EasyJet targets the consumers through various channels that help them to reduce marketing cost per sales. In 2001, EasyJet launched ‘easy Jet mobile app” which was downloaded by over six million people which accounted for 5% of overall sales. Mobile boarding cards are available through the app and make it easy for cust...
Due to the increased use of the internet, it is becoming more and more easier to book online. This allows customers to book flights easier and increase Jet2’s revenue. Revenue is increased through not having to deliver or post tickets out to its customers, in comparison with other non-internet based airlines. It is believed that over 97% of Jet2’s customers book online, which further highlights Jet2’s emphasis on online bookings.
2.Price: A price must be set to add value to the consumer but also add revenue to the airline. Cost is considered the most volatile areas in the airline industry today; deregulation has forced pricing to become the major competitive variable. Like any industry supply and demand control the pricing elements of the ai...
The Economist. 2013. Flying into more flak. [online] Available at: http://www.economist.com/blogs/gulliver/2013/08/ryanair [Accessed: 26 Mar 2014].
...ls, power and diesel which have gone up compared with the previous year and the inability of manufacturers to pass on these increases to consumers.
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
The main threats to the industry over the next five years are the rise in oil prices, legislation, the TSA, and labor costs. Each of these threats affects the scheduled air transportation industry, not only endangers Delta Airlines, but the entire industry. As the price of labor increases for ground operations and pilots, this creates a burden on the industry by causing them to spend more to satisfy their labor requirements. The price of fuel increasing leads to the price of fuel increasing, which not only affects a single airline, but every airline. With each time that the crude oil price rises, the prices associated with the costs of refining the jet fuel as well as transporting it.
Several large scale, interrelated conditions have affected the airline industry over the past several years in such a manner that every carrier has had to respond in order to remain viable and competitive.
We can also identify the weaknesses of Ryanair in accordance to scientific management. From what we have previously discussed in the essay we now know that there are a few points from Douglas McGregor’s theory X that can relate to scientific management. However these key points also have influences on Ryanair, which can come across as
In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
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 substantially and successfully. The company currently has 146 routes to 84 destinations in 16 countries, and carries more than 15 million customers annually. Ryanair aims to be Europe’s largest airline in 8 years (www.ryanair.com).
David Neelman realized his vision of creating an airlines company that is focused on customer service by starting JetBlue. During the startup phase or entrepreneurial stage, typically most of the companies go through the activities of marketing the service and /or product. But Neelman, perceptive of the industry needs, went about raising enough capital before starting JetBlue, as airlines industry is a capital intensive industry. His entrepreneurial style and previous experience enabled him to identify the core value of the service “To improve the passenger experience at a low cost” that he wanted JetBlue to provide. Neelman wanted to utilize technology to bring better customer experience at a low cost. Some of the technological activities that JetBlue planned include state-of-the-art revenue management system, paperless tickets etc. His in-depth experience enabled him to identify the external factors that would affect the business such as simple check-in and boarding process, hassle free ticketing procedures etc. This emphasized his knowledge of adapting to the ever changing customer needs. Neelman instilled the culture of...