Ryanair Case Study Essay

Ryanair is operating in a period where there is an economic recession, but lucky for Ryanair, passengers both casual and business tend to prefer low fare airlines to full-service airlines as they try to cut back on cost. A major concern for Ryanair is the EU-US Open Skies Agreement that opens the European market to US airlines. Increased completion would make it difficult for Ryanair to keep its competitive advantage especially when these Airlines are operating in an environment where operating cost is lower due to lower taxes and labour cost. Also customer
The level of oil prices has a critical impact on Ryanair’s operation. The financial report reveals that fuel cost represent 34.1 percent of total operating expenses and with oil prices fluctuating constantly Ryanair could have higher operating cost depending on the levels of prices. Ryanair has used the strategy of fuel Hedgeing but this could be beneficial when the oil prices rise above the level the Hedge is set at and it could be disadvantageous when the price drops below the level. Ryanair has been forward thinking in relation to dealing with this aspect through installation of Winglets on aircrafts to reduce fuel consumption.
Government decision to drop its Irish Travel Tax would be an opportunity for Ryanair to lower its prices even more making it even more competitive.
The Telegraph has done a survey that reveals that Ryanair Low fare might actually be more than its competitor when taking all the add-ons into consideration It is in the best interest of the company to reevaluate its marketing strategy so that this picture does not become clear to customers as it could result in a drop in sales.
Social-
Although Ryanair boast of its service to customer as being better ...

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...termining factor when it comes to short-hauls. Air Travel is the fastest means of transport even when compared with the high-speed trains. Also for longer distances the train fares present no competition for the current low-fares offered by airline. Therefore the threat of Substitution is low.
Porter Five Forces Overall Summary
The industry analysis according to Porter’s Five Forces Model shows that it is an attractive industry and Ryanair’s position within the industry is strong. The barriers to entry are high, the threat of substitution is low and the bargaining power of the supplier is relatively low given airlines the opportunity to make a profit. Although the bargaining power of customers are high and the rivalry of existing competitors are high, Ryanair has a competitive advantage through its low cost of operation and the size of the market that it controls.