RYANAIR HOLDINGS, PLC Case Study - 2011

Presented to: Lecturer Atique Ahmad

Presented by: Syed Faizan Jaffri – L4F13MCOM2001

NOVEMBER 11, 2015

CONTENTS

Overview of Ryanair ......................................................................................................................................................... 1

Vision ............................................................................................................................................................................ 1

Mission .......................................................................................................................................................................... 1

Business Strategy .............................................................................................................................................................. 1

Operations ..................................................................................................................................................................... 1

Use of Boeing Aircrafts 737 – 800........................................................................................................................... 1

Use of secondary, regional airports ........................................................................................................................ 1

Extra fee at airport services ..................................................................................................................................... 1

Human Resource Management .................................................................................................................................... 1

Customer Service .......................................................................................................................................................... 1

Ancillary Services ......................................................................................................................................................... 2

Internet services ............................................................................................................................................................ 2

Environmental Analysis .................................................................................................................................................... 2

Economic factors ...................................................................................................................................................... 2

Social factors ............................................................................................................................................................ 2

Technological factors ............................................................................................................................................... 2

Legal factors ............................................................................................................................................................. 3

Environmental factor - SWOT ................................................................................................................................. 3

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RAYNAIR HOLDINGS, PLC – 2011

OVERVIEW OF RYANAIR

Ryanair was founded in 1985 by the Ryan family to provide scheduled passenger airline

services between Ireland and the UK, as an alternative to the then state monopoly carrier, Aer

Lingus. Initially, Ryanair was a full-service conventional airline, with two classes of seating,

leasing three different types of aircraft.

Ryanair‟s objective was to maintain its position as Europe‟s leading low-fares airline,

operating frequent point-to-point flights on short-haul flights, mainly out of regional and

secondary airports. The heart of its strategy was based on providing a no-frills service with low

fares designed to stimulate demand, particularly from budget-conscious leisure and business

travelers, who might otherwise have used alternative forms of transportation, or who might not

have travelled at all.

VISION

“To firmly establish itself as Europe‟s low fare, schedule passenger airline through continued

improvements and expanded offerings of its low fare service”.

MISSION

“To become Europe‟s most profitable low cost airline by rolling-out proven low fare, no-frills

service in all markets in which we operate to the benefit of passengers, people and stake-

holders”.

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BUSINESS STRATEGY

Ryanair’s business strategy is to minimize its cost and so increase their profits. Therefore, to

achieve their objectives they have based five primary components;

1- Operations

2- Human Resource Management

3- Customer Services

4- Internet Services for customers

5- Ancillary services

OPERATIONS

USE OF BOEING AIRCRAFTS 737 – 800

- Availability of trained staff

- Less Cost of maintenance

- Easy handling of spare parts inventory

USE OF SECONDARY, REGIONAL AIRPORTS

- Outdoor boardings

- Check in on internets

- Low and traffic volume based fee

EXTRA FEE AT AIRPORT SERVICES

- Reduces the number of bags or luggage

- Reduces the handling cost

- Reduces the number of check in desks

HUMAN RESOURCE MANAGEMENT

- Introduction of productivity base incentive system

- Outsourcing of ticketing and other airport services

CUSTOMER SERVICE

- Services substitution for cost saving purpose such as;

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Reduction in free bags checking, meals, flights to major airports, with promising on-

time departures/arrivals, fewer luggage loss etc

ANCILLARY SERVICES

Although Ryanair charge for ancillary services but these services attracts more customers as

they are available at single platform. Ryanair knows that more the customers, lower the cost,

higher the profits.

- Ancillary services includes; Trip managements, Hotel reservations, car rentals, priority

boardings, availability of food, infant equipments, sports and musical instruments

- Teaming up with other service providers to make the services available at single

platform

INTERNET SERVICES

Ryanair is providing internet services to its customers so they could be facilitated by connecting

Ryanair online and enjoy the information and paid services while sitting home that also enables

time savings and avoiding nick of the time issues.

Environmental Analysis

ECONOMIC FACTORS

The major economic factor discussed in this case is fuel, and it has been discussed that fuel

prices are instable where they are also been expected to be rise in coming year. So, this factor

may effect Ryanair’s operations and strategies as the fuel is a major factor of airline-company’s

cost.

SOCIAL FACTORS

There are many controversial things came up from the Ryanair that may impact socially on

organizations credibility, such as advertisements controversies, differences in services

provided and fee, as claimed by company.

TECHNOLOGICAL FACTORS

Technology is a very crucial factor to keep in mind while making strategy for any organization.

It may help a company to leap ahead than the competitor as we as helps in saving cost.

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In Ryanair’s case, the company as chosen those aircrafts, that are already been famous in the

market, and also it has low maintenance cost, experienced crew can be find easily that reduces

the training cost.

LEGAL FACTORS

One of the important external factor, legal factors include the issues with the governing bodies

of EU governments as well as airlines and aviation governing bodies. Their rules and

regulations may affect the organization’s strategies and operations and may also impact the

cost and profits.

ENVIRONMENTAL FACTOR - SWOT

STRENGTHS

- Ryanair Company has strength in ancillary services that has grown its profits with in

short time as for airline-company. It can move on with offering more facilities with

attractive packages.

- Modern/Low Cost Fleet single aircraft type; average plane age 2.94 and no plane older

than 8 years on fleet.

- Profits increased by 25.6% from 2010-2011.

- Traffic grew 8% to 72 million in 2011.

WEAKNESSES

- Bad Public Image due to controversial incidents, complaints filed against them by

Advertising Standards Board (ASA)

- Complex Fee System leading to customer dissatisfaction

- Only arrive at secondary airports; no option for arrival at Primary Airports.

- Weak in negotiation with employees unions thus company’s productivity base incentive

strategy failed

-

OPPORTUNITIES

- Success in ancillary services may lead the company to the new markets for joint

ventures

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- Open up their aviation repair service and flight training programs to operations outside

the company.

- Customer base is expected to grow up to 85 million passengers.

- Chances to penetrate in new markets other than Europe

THREATS

- Airlines and aviation governing bodies’ rules on flying hours and aircraft regulations

could increase future expenses. As company has already paid 88 million in claims last

year due to the EU 261 regulations where the airline has to cover accommodations and

compensation

- Unpredictable and uncontrollability of rising fuel costs, regardless of hedging.

- In the future legislation will require airlines to pay about €1.4 billion for emissions of

carbon dioxide which will rise to €7 billion by 2020.

- Increased competition from alternative forms of travel.