RYANAIR

Ryanair



Executive Summary

Ryanair is a low-cost, no-frills airline carrier in Europe that set up in 1985. They've managed to maintain the lowest prices over the years despite the entry of competition after deregulation of air travel in Europe in the late 1990s. (Lohmann, 2008) Due to their reputation and long-term success, they have a lot of experience and brand recognition.

Table of Contents

Executive Summary2

Introduction3

Business Model4

Network structure5

Aircraft Fleet•21 737-200's and 19 737-800's5

Service6

Fares6

General6

Analysis Of The External Environment8

PESTEL Analysis8

Political9

Economical10

Socio-cultural10

Technological11

Environmental12

Legal12

Recent / Current Strategic Positioning13

Source Of Competitive Advantage13

Resources And Capabilities14

Recommendations For The Strategic Development15

Conclusion16

References17

Ryanair

Introduction

Ryanair low prices have been made possible through numerous strategies. First, they use a standard fleet of planes (Boeing 737s), which has cut down on training requirements (increasing the flexibility of current employees) and has allowed for economies of scale.

Their use of secondary airports outside of the major cities lowered their landing and airport fees significantly. In addition, Ryanair averages a 25 minute turnaround in comparison to 60 minutes of other major carriers, which increases their efficiency. (Ryanair, 2008) Ryanair has a very high productivity since their airplanes were hardly ever on standby and they use fewer employees per plane, lowering their wage cost. (Gilbert, 2008) This still fits in with their strategy because they are focused on low-prices with a lower service scope than most carriers. As a result, they do not offer anything for free (food, drinks, other services like baggage check-in). They even turned the usual big cost of food into a revenue opportunity by selling them on the planes. Ryanair has very simplified operations, as they don't assign seat numbers and their flights are point-to-point, which means they don't have to deal with the complication of transferring baggage and passengers to other planes. Perhaps one of their greatest areas of profitability has come from their online sales. By 2003, 95% of their bookings were done online. This cut transaction costs substantially. (Ryanair, 2008)

Business Model

In 2008, Ryanair carried over seven million passengers with a workforce at year end of 1,262 people. Ryanair had, by the end of 2000, formalized its business model to include:

All Boeing aircraft (primarily 737-80O's). (Gilbert, 2008)

No "free" amenities such as snacks and drinks.

Non-reclining seatbacks.

Quick flight turnarounds - averaging 45 minutes.

An in-flight magazine that was really a catalog for food, beverage and a multitudeof duty free products - sold at a normal profit by the cabin attendants.

Minimum baggage allowances.

Network structure

•Short-haul point-to-point network, with main bases at Dublin, Stansted, Brussels Charleroi and Frankfurt-Hahn.

•Strong focus on secondary airports, although Ryanair has apparently “appealed for the right to take up spare departure slots at Heathrow and Gatwick.”•40 aircraft, 56 destinations, 79 routes.

Aircraft Fleet•21 737-200's and 19 737-800's

•Replacing 737-200's with 737-800's over the next four years and expanding fleet with an order for 100 737-800s plus 50 options, to be delivered between 2002 and 2010. (Thompson, 2007)

•Single cabin layout with max capacity of 189.

•Considered second hand aircraft for expansion.

Service

•No “frills” but considering pay-per-view live TV with Connation by Boeing.

•Food sold on-board.

•No allocated ...