AIRLINE INDUSTRY

Airline Industry

Airline Industry

Introduction

Traditionally airline industry has always been very sensitive to economic growth cycles. This simply means that when the economy flourishes (i.e. high GDP and NI figures) the airline industry will flourishes too. In this report we will analyse two airline companies i.e. British Airways and Ryanair, these two companies have a very strong positive correlation.

Activity 1

Ryanair Analysis

Ryanair began in 1985 in competition with Aer Lingus flying to the United Kingdom and Ireland. The company had a commitment to low fare air travel and making air travel affordable for everybody. The airline didn't really begin to come of age until the years 1990 and 1991 when new management took control. Before that the airline had made a loss of 25M in the previous four years. In 1991 the airline made its first profit and was carrying over 700,000 on just five routes. Expansion and success rapidly continued and in 1997 full European Union transport deregulation came into force that allowed Ryanair to open up routes otherwise inaccessible.

Each year since its overhaul in 1990, Ryanair has increased workforce, flights, and routes and upgraded its aircraft. Passenger numbers and profits have increased favourably in return. Ryanair has won many awards and accolades along the way and is spearheaded by a young entrepreneur by the name of Michael O'Leary. It now claims to sell over 90% of its tickets online and is Europe's most successful airline. During the first six months of this year it made profits of over 128M which was more than the whole year of 2001 in which Ryanair was one of the very few airlines to made a profit after the September 11th attacks. Today Ryanair is a fast moving airline which seems to

grow in stature weekly and distance itself from its competitors.

Ryanair is known for a highly aggressive style, both in controlling costs and defending what it sees as its vital interests. Michael O'Leary has sparred publicly, and sometimes in court, with business rivals, politicians, organized labour, travel agents and even the airline's customers.

After September 11th last year Michael O'Leary, accused rival airlines of cashing in on the US terrorist attacks, using the crisis as "an excuse upon which to blame their long-standing cost problems". Ryanair would be said to be a very autocratic management style organisation. Michael O'Leary is a very participative leader who demands the best. He is a very smart entrepreneur who pits his wits against competitors in a very autocratic manner. What he says goes and it has often got him into trouble and hade him many enemies but it cannot be denied that it is a very effective leadership and management style.

Michael O'Leary has often even quoted competitors prices against his own in national newspapers and printed competent slogans on Ryanair aircraft such as "Nobody beats Ryanair prices, especially Aerlingus".

Overall the management style within Ryanair would be a combination between autocratic and participative.

* Organisation Structure and Design

Ryanair is a large organisation which in recent been ...