RYANAIR MANAGEMENT ANALYSIS

Ryanair Management Analysis

Ryanair Management Analysis

Introduction

Ryanair was founded in 1985 by Christy Ryan, Liam Lonergan owner of an Irish tour operator named Club Travel, and noted Irish businessman Tony Ryan, founder of Guinness Peat Aviation. Christy Ryan was from Waterford and it was his idea to start an air service between Waterford and London. To start with airline began with a 15 seat Embraer turboprop aircraft flying between Waterford and London Gatwick with the aim of breaking the duopoly on London-Ireland flights at that time held by British Airways and Aer Lingus. Ryanair has been distinuished by rapid expansion, a outcome of the deregulation of the air commerce in Europe in 1997. Over the years, it has developed into one of the world's most profitable airlines, running at remarkable margins by passing its costs exactly to its customers. Ryanair is the largest airline in Europe in periods of traveller numbers.

Company overview

Ryanair begun in year 1985 with only 57 employees members and with one 15 seater turboprop plane from the south of east of Ireland to London-Gatwick which conveyed 5000 passengers on one route. The increase of travellers, the business is not so good in organising cost that the business has lose its money. A new management team is brought in to sort it out and re-launch as a “low fares or no frills” airline, closely modelling the Southwest Airlines model in the U.S. And in 1994, Ryanair acquired its first Boeing 737 aircraft which carried over 1.5 million passengers. In 1995, Ryanair is the biggest passenger carrier on Dublin-London route, the largest Irish airline on every route being operate and carried 2.25 million passengers in the year (www.ryanair.com).

Ryanair's Objective

Ryanair's objective is to establish itself as Europe's leading low-fares scheduled passenger airline through continued improvements and expanding offerings of its low-fares service. Ryanair aims to offer low fares that generate increased passenger traffic (www.ryanair.com).

Current Business Environment

Ryanair's earnings could be halved due to ever increased fuel cost and a lower UK pound. The quarter of 2007 net profit dropped with as much as 27%. Applying the Southwest business form it is well understand for being a “no frills airliner” generating sound economic figures. The enterprise model is mostly concentrated on the cost sensitivity of customers. PRC being in general an “affluent” country can be appalled and attracted by this. Being able to shell out much money but not getting the due end result could spell disaster for Ryanair (Sorokin, 1982, pp 83-190).

On the one hand, it the created a compromise by cutting costs out of the traditional airliner model; the usage of Internet for reducing channel costs, no food served and additional charges for luggage, use of smaller airports, and a single model aircraft is being utilized. On the other hand, the business model focuses on stimulating revenue streams by maximizing the utilization of aircrafts and yield management pricing strategies(Lynch, 2000, pp 56-389). The ever-rising fuel prices propel costs, but not in the components of ...