8/13/2019 Casestudy4 Ryanair

1/3

8/13/2019 Casestudy4 Ryanair

2/3

Case questions

+ >hat are the essential elements of #yanairs low-cost strategy.

6 >hat factors will affect its long-term sustainability.

@#yanairs website is http1HHwwwryanaircom

easy"ets website is http1HHwwweasyjetcomSouthwest, the pioneer low-cost airline, is at http1HHwwwsouthwestcom

8/13/2019 Casestudy4 Ryanair

3/3

Notes for lecturers: Ryanair and the revolution in low-cost air travel

Question 1: >hat are the essential elements of #yanairs low-cost strategy.

?epending on time available, it would be helpful to begin with some of the bac%ground to the case study >hy

is the growth of low-cost air travel referred to as a revolution.

!ssential elements1

5o-frills approach to the basic service offered the consumer, who benefits from fares that can be a

fraction of those charged by the established carriers 2igh volumes I the need to have a high load factor

Briority on reducing costs in every possible way, including internet boo%ing and tight schedules

Use of secondary airports - this is an aspect of the previous point, which can be discussed separatelyD

public policy issues are involved, such as the possible subsidies offered by local authorities eager to

attract commercial investment and visitors

Question 2: >hat factors will affect long-term sustainability.

Any fall in passenger volumes, which will reduce profit margins

#ises in fuel costs

Burchase of new aircraft, which, while more fuel efficient, involve higher depreciation costs 3ierce competition for the low-cost traveller1 !asy"et is the most established competitor, but there are

many others, whose services include, for e&ample, allocation of seats, which appeals to many consumers

)egal changes in the use of secondary airports, whether from the !uropean 0ommission or local

authorities

!nvironmental pressures I low-cost air travel is a rapidly growing source of greenhouse gas emissions,

as well as noise >hile governments are unli%ely to curtail their growth directly, a possibility is the

increase in ta& on fuel and strict regulation for the e&tension of airports or the building of new ones