RYANAIR

European Pioneer of Budget Airline Travel

Presented By: Rituraj

Overview Of The Company

Europes leading budget carrier Stuck to the low cost /low fare model Started in 1985 to provide scheduled airline services between Ireland and the UK Most profitable airline in the world on the basis of operating and net profit margins Successful acquisition of Buzz- small budget and short haul carrier Delivered 12 % increase in profit , despite a 74 % increase in fuel costs Ancillary revenue grew by 36%

Low Fares

No Frills

Ancillary Revenue

Ryanairs Stratagems

Issues At Ryanair
Risks & Challenges Fuel Prices Compensation To Passengers Terrorism & Security
Industrial Relations Safety Issues Customer Services
Extra capacity building would create uncertainty about the success of new routes and locations Vulnerable to rising fuel prices Represents 35 % of the operating costs Regulation by the European Union

Added risks and costs to the industry IR with pilots was fraught Unions were not recognized Poor staff morale

Voted worlds least preferred airline

Strengths
Low cost leader Innovative cost reductions 1st mover advantage Established market share Range of ancillary services

Weaknesses
Refused to recognize unions Volatile customer relations Dependence on Michael OLeary Antagonistic relationship with competitors

SWOT Analysis

Opportunities
Further growth Advanced cost reduction EU expansion Tourist destinations

Threats
Increased competition New low cost entrants Alliance/Mergers between competitors Industry criticism Substitute Transportation Cars, Buses Speed Trains

Critical Success Factors

Continuously concentrates on driving down its costs to offer the lowest fares possible and remain profitable

Offers minimum standards of service and very low prices for point-to-point, short haul flights

Strategic focus of having the lowest prices, being reliable within the marketplace, comfort and service and frequency

Eliminated extras such as in-flight meals, advance seat assignment, free drinks and other services

Business Strategy

European Competitors
EasyJet
Greatest rival frequently attacked each other as part of their public relations Different business model- used more centrally located airports Struggled on the profit front

Air Berlin

Business model instead of point to point connections , it offered guaranteed connections via its hubs low fare alliances with Niki

Bmibaby

Subsidary of bmi British Midland Leading low cost carriers in the Midlands and Northern England

Incorporated aspects of budget airline model

FlyBE

Short and long haul services On the verge of bankruptcy by 2001 Achieves more than 3 times the short haul passengers eventhough their fares are slightly high Aer Lingus Was offered a bid for a merger with Ryanair

Cost Reduction Strategy

Fleet commonality

Managed marketing costs

Contracting out services

Managed staff costs and productivity

Airport charges and route policies

Ryanairs Positioning Strategy

Price
Leader Premium Competitive

Features

Original

Customised

Basic

Quality

Excellent

Average

Acceptable

Support

Comprehensive

Standard

Minimal

Availability

Restricted

Selective

Universal

Reputation

Prestigious

Respected

Functional

Corporate Level Strategy

High Need for global integration Global Strategy Transnational Strategy

International Strategy
Low Low

Multidomestic Strategy

High

Need for local responsiveness

Porters 5 forces

Internal Analysis - Capability

Core Competencies

Internal Forces

External Forces

Suggestions
Expand into central & eastern Europe Continue aggressive acquisition Increase ancillary revenues focus on after-sales Overhaul the customer service Develop the smaller operating bases

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