Marketing in the Age of Technology:Ryanair

Mike Ward

Salford Business School

University of Salford,

Greater Manchester

United Kingdom

Lecture Outline

The Story of Ryanair

The Marketing Strategy of Ryanair.

The Leadership in Ryanair

YouTube and Ryanair

How can Ryanair remain innovative and

maintain competitive advantage?

Internet Booking

Ryanair was one of the first airlines to realise

the potential of the internet

Website launched in 2000 taking 50000

bookings a week

Ryanair

http://www.ryanair.com/site/EN/

Ryanair

Started in 1985

Currently in 26 European countries, 694 routes

133 aircraft

Employs 1400 people, flies 52 million passengers,

80% passenger loading on aircraft

5 main bases-Stansted (London), Charleroi

(Brussels), Marseilles, Madrid, Bremen

Ryanair-key dates

1986-got permission to fly Dublin-London-

fare was half BA and Aer Lingus

1988-routes to Munich and Brussels

1989-restructure due to fare war-based on

Southwestern Airlines low fare model

1991-affected by Gulf War-switched from

Luton to Stansted-deregulation

Ryanair-key dates

1997-became a public company

2000-website launched

2003-acquired Buzz from KLM

Ryanair 2007 Report

Traffic Grew by 22%

Cash held-E2.2 Billion

153 new routes

Pre-1990 Airline Industry

Dominated by big

national airlines

Cartels

Route Monopoly

Pre 1990 Airline Industry

Little chance of new entrants

High ticket prices

Limited availability of purchasing tickets-

Travel Agents, Airports

Limited choice of departure airports

No choice of airline

The Airline Environment-pre 1990

No aggressive competition

Sharing Routes

Fixing Prices

Dominated by a few “global players”

Government intervention

Generally aimed at the “business flyer”

1990s-change in the environment

Privatisation

Deregulation

Relatively free market

More choice for the consumer!!

Birth of the “Low Cost” Airline

On-Line Booking

No Seat Reservation

Pay for Seat only

Led to:

Entrance of new players-Go, Wizzair, Easyjet

and

Ryanair

The “ No Frills” Industry-2009

60 across Europe

Easyjet, Ryanair, BMI Baby (U.K.)

Air Berlin, Germania Express (Germany)

Wizzair (Poland & Hungary)

Air One, Volare (Italy)

2007 22.7% growth in seats

Understanding the environment

Very important because it is changing all the

time!!!

Customers

Competitors

Government

Economic factors

Social factors

The airline environment now

More competitive

Lower Prices

Alliances between “big players”

Emphasis on short-haul due to decline on long-haul

Increase in low cost carriers

Many airlines copying “low cost model”-

e-booking, meals extra etc

What is strategy?

A means of achieving an objective

Aims to transform corporate objectives in to a competitive market position

Is about SEGMENTING markets and DIFFERENTIATING products from the competition

Why is it difficult to develop a strategy?

Requires a good understanding of where you

are now-your BUSINESS POSITION

Requires an ability to motivate the whole

business-ability to CHANGE

There has to be a VISION-where do we want

to be?

Basic strategy options- Michael Porter

Cost Leadership- using strength to negotiate lower prices from suppliers

Focus- specialising in marketing to specific market niches/segments

Differentiation- being different to competitors, offering more value to customers

How does Ryanair use these?

Ryanair’s Competitive Advantage

Low Cost

• Aircraft at a discount

• Low cost airports

• Fast turnarounds

• No travel agents

• Short routes

Ryanair’s Competitive advantage

Focus

• Infrequent flyers/holidaymakers

• Specific cities in Europe

• Consumers only

• Small destination and departure airports

Ryanair’s Competitive advantage

Differentiation

• On line booking

• Easy boarding

• Cheap prices

• Access to other services-Hire cars

• Aggressive advertising and promotion

The Competitive Environment

More competition but can the big airlines –

British Airways, Air France, really compete?

Impact of EU legislation against subsidies

from airports (Charleroi)

Environmental Issues

Fuel prices and availability

“The Credit Crunch”

Michael O’Leary-CEO

A Maverick. Is Ryanair a maverick player?

Does not conform

Unpredictable

Mean

Tough

Ruthless

Michael O’Leary-Ryanair Chief Executive

Ryanair- Controversy, Publicity, No Compromise- The Price is the Cheapest!!!

http://www.youtube.com/watch?v=9wGkbzOk3Jc&featu

re=related

http://www.youtube.com/watch?v=CgA0DkuIACU&NR=

1

http://news.bbc.co.uk/2/hi/business/7914542.stm

http://www.youtube.com/watch?v=aXkaAjy9ga0

Ryanair- using social sites to promote themselves as a young, fun airline

http://www.youtube.com/watch?v=A8d2fmkQ

DXU&feature=related

Anti-Ryanair Website

Gift Vouchers Cost You More than they are Worth

Ryanair Faces Prosecution Over Lack Of Email AddressOn airline security : ‘We are not going to die at the hands of toiletries.’

On working at Ryanair : ‘The only thing I will not do is fly the aircraft.’

On his wedding guests : ‘Who the **** is Aunty ****ing Mavis?’

On popularity : 'I don't give a shite if nobody likes me.’

We do not take money. Passengers give it to us voluntarily.’

'You want luxury? Go somewhere else.‘

'Some passengers are carrying baggage which is clearly

inappropriate.’

Michael O’Leary-CEO Ryanair

Books about the CEO!!

The future for Ryanair

Merger with Aer Lingus?-might not be

allowed as creating a monopoly

Transatlantic Flights?- 20 euros to U.S.A.

Purchase of U.K. Airport?- possibly

Edinburgh or Glasgow

Looking to maximise revenue-fat people pay

more?!!!

Up-Date

Michael O’Leary to retire in 2 years time

Order for 200 Boeing Aircraft Cancelled

Many routes to be cancelled

2011/12-negative growth in sales

Conclusions

Ryanair has changed Air Travel for all of us

Are we prepared to accept extra charges as

long as the price is low?

In a very important industry, can non-

nationalist airlines survive?

Thank you

Thank you very much for your attention

Mike Ward-M.F.Ward@salford.ac.uk