Ryanair Presentation_edited Version

8/8/2019 Ryanair Presentation_edited Version

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Pros and Cons of low cost carries: A

case study of RYANAIR

Allison Fernandes s3251936

October 12th 2010


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Low cost carrier; materialised in 1985.

Employs the low-cost, low-fare strategic business

model which is unique in the European market

Competitive with other airlines, Its largest competitoris Easyjet.

Competition with WizzAir as it also flies to smaller

secondary airports.

5 Sept 2009, fleet reached to 200 aircraft.

Ryan Air will operate a fleet of 292 aircraft by 2012.


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Pros of Ryan Air


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Pros of Ryan Air

Europes leading low-cost Airlines.

Operates short haul point-to-point routes, between Ireland, the UK

and continental Europe.

It enjoys monopoly in Dublin Airport.

Airline with best frequency & punctuality.

Reported a growth rate of 32.2% in the fiscal year ended by March

2007.

Increase in revenue is attributed to an increase in passenger

volumes.


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Pros of Ryan AirLaunch of new routes

The company announced new routes and extended its operations to three

new countries.

Started 16 new routes across Europe.

Expanding its operations to new countries would help in reducing thecompanys dependence on the UK-Ireland market (Cullinane 2006).

Fleet expansion

Apparently, Ryanair is having the youngest fleet carriers in its base with

average time of 2.4 years old carriers which is unprecedented in the

airline industry.

Ryanair entered into an agreement with Boeing to purchase new Boeing

737-800 series aircrafts over a five year period from 2006 to 2011.


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Cons of Ryan Air


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Cons of Ryan AirWeakening employee relations

Involved in a number of labour union disputes.

In 2006, Ryanair workers went on a series of one-day strikes.

Complains about the conditions of Ryanair ground staff in

airports (Cullinane2006).

Lack of scale

Small in size compared to its competitors.

Competitors such as Air France, Lufthansa, and BA are large insize and enjoys a competitive advantage.


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Cons of Ryan Air

Increasing aviation fuel prices

Due to the rising oil prices globally, the prices of aviation fuel have

gone up substantially in the past few years.

The rising fuel prices are likely to have a direct impact on the

companys margins (Ansoff & Mcdonnell 1990).

Threats to security

Security issues often pose a challenge to Ryanair. In August 2006, UK

security authorities arrested and subsequently charged eight

individuals in connection with an alleged plot to attack an aircraftoperating on transatlantic routes.

As a result, Ryanair cancelled 279 flights in the days immediately

following the incident and refunded a total of 2.7 million in fares to

approximately 40,000 passengers


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CONCLUSION

Ability to adapt to new customer demands and the increases in oil

prices along with any government changes.

Although Ryanair is able to project itself as a low-cost and low-fare

carrier, but in the long run, the model is unsustainable given that the

fuel market is becoming more and more volatile and the customer

service is degrading in Ryanair. It would lead to a potential loss ofcustomers.


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ANYQUESTIONS ??


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REFERENCES

Andrews, K 1999 The concept of corporate strategy, In: The Strategic Process, Mintzberg, H., et al (Eds),

Pearson Education Ltd, pp 51-60

Ansoff, I & McDonnell, E 1990 Implanting Strategic Management, 2nd Edn, Prentice Hall

Besanko, D, Dranavo, D & Shanley, M 1996 The Economics of Strategy John Wiley and Sons Inc, New York,

USA

Brook, I 2003 Organisational structures and theory Chapter Five. In Working in Organisations, J. Cullinane

ed. Harlow, UK, Pearson Custom Publishing, pp 160-223

Borenstein, S 1989 Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry Rand

Journal of Economics, Vol. 20.

Capon, C 2004 Managment and organisations Chapter One. In Working in Organisations, J. Cullinane ed.

Harlow, UK, Pearson Custom Publishing, pp 11-49

Cullinane, J 2005 Lecture Four: Organisational structures and theory BUSI 1067 Working in Organisationslecture delivered on 31 October 2005 at University of Greenwich, London

Cullinane, J 2006 Working in Organisations, Harlow, UK, Pearson Custom Publishing.

Culpan, R 2002 Global Business Alliance: Theory and Practice New York: Greenwood Press

Dalton, L & Porsche 1970 Organisational structure and design, London, Richard D. Irwin, Inc.

Datamonitor 2007 Company Profile: Ryanair


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REFERENCES

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Business strategy and retailing, Wiley, 1987.

Hatch, M. J & Schultz, M 2003 Bringing the Corporation into Corporate Branding European Journal of

Marketing

Heizer,J & Render,B 2007 Operations Management, 7th Edn

Kakabase, A, Ludlow, R & Vinnicombe, S 1988 Working in Organisations London, Penguin Books

Livemint 2009 Government considers Foreign Airlines to buy stakes in Local Carriers January 14 2009,

Viewed on 28th April 2010,

Morelli, C 1998 Constructing a balance between price and non-price competition in British multiple food

retailing, 1954-1964, Business History, Vol 40, No 2

Punch 2009 Economic conditions will remain difficult till 2011, British Airways chief 19 April 2009, Viewed

on 6th May 2010, Wrigley, N 2007 Retail concentration and the internationalisation of British grocery retailing, in Rosemary

Bromley and Colin Thomas (edn), Retail change, contemporary issues, UCLPress

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