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Case Study: Ryanair Business Strategy Analysis

Ryanair is an Irish low cost airline headquartered in Dublin founded in 1985. It operates 181 aircrafts over 729 routes across Europe and North Africa from 31 bases. Ryanair has seen large success over the recent years due to its low-cost business model and has become the world’s largest airline in terms of international passenger numbers. Taking Porter’s generic business strategies into consideration, Ryanair operates a cost-leadership strategy to drive itself into achieving its mission of being the leading European low-cost carrier (LCC). Throughout this essay the business strategy of Ryanair will be analysed and the sustainability of their model evaluated.

Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. Considering their objectives and mission, Ryanair’s decision on their cost-leadership strategy was based on a few main factors which are discussed below.

A major influence was the deregulation of the airline industry in 1978 which removed government intervention within the European continent. Under the new rules, routes and fare decisions were made by individual airlines which meant that they could compete on other factors besides food, cabin crew and frequency. As a result of deregulation, a large number of new airline start-ups emerged within the EU and competition among airlines increased dramatically resulting in downward price pressures. Ryanair was established to take full advantage of these market conditions. By offering low prices, Ryanair entered a huge and virtually unlimited market.

Having seen the major success of the low cost carrier Southwest in the United States, Ryanair decided to follow in their footsteps by establishing a LCC for the European continent that targeted fare conscious leisure travelers and regular low cost business travelers. By doing this Ryanair became the first low-fare airline in Europe. However, they took the Southwest model further by offering no drinks and snacks at all and abolishing the frequent flyer program which Southwest up to this day offers its customers.

The evaluation of Porters five forces influenced Ryanair’s choice of a cost-leadership strategy, as the threat presented by new entrants and the threat of substitutes could hinder their success. The threat of new entrants is high within the aviation industry which meant that low fares would help drive away any further competition. The threat of substitutes to Ryanair had to also be carefully examined. Their primary market, Europe, had the availability of high speed trains and car holidays. For Ryanair to be successful, prices had to be low to attract the public, and resist strong competition from substitutes like Eurostar.

As Europe’s largest low fare airline, Ryanair’s competitive advantage remains in their ability to continue as cost leaders; providing the cheapest fares to its customers. This dictates that the company must minimize its own costs to ensure that they are able to offer customers the service at a price below their direct competitors. This leads us to consider some key functional strategies which directly help Ryanair towards their ultimate goal to be Europe’s leading low fares airline.

The marketing strategy is perhaps the most obvious and significant functional strategy of Ryanair. Low fares are designed to stimulate demand, attracting fare-conscious travelers, those who may have used alternative forms of transportation or even those who may have not traveled at all. Penetration pricing as it is called helps gain market share and simply, more customers equals more revenue. Tickets are almost solely sold on their website ‘www.ryanair.com’ which very importantly keeps sales costs to a minimum since very few phone operators are employed and computers are able to cheaply handle all functions of sales. With ever increasing accessibility of the internet globally anybody with internet access can buy airline tickets from Ryanair, so distribution practically takes care of itself through this medium. Ryan Air relies on low cost promotions and in recent times has concentrated on their ‘One million seats at one pound’ which is usually advertised through their internet site, national press and bulletin boards. It is the simplicity of this promotion which helps keep costs low since expensive advertising agencies can be entirely avoided and advertising can be dealt with in house.

Ryanair’s operations strategy determines how the airline will deploy its resources and the policies it will operate by. To keep costs low they operate a ‘no frills’ service onboard aircraft. This means the fare only includes the flight. There are however a number of other measures directly related to a no frills service. These include ticket-less boarding, unallocated seats, one class of travel, costs for check-in baggage, no refund policy, basic seats (to increase aircraft capacity) and charging for any additional service. All this significantly reduces costs to Ryanair. The Achilles heel of Ryanair is their greater aircraft utilization through super quick turnaround times. Essentially this means the aircraft spends very little time on the ground, they achieve this through their human resource policies and by having none or very little cargo in the baggage hold to speed up loading and unloading of the aircraft.

Logistics strategy deals with the flow of products into and out of Ryanair. Again there is heavy emphasis on cost saving and reducing measures. Ryanair fly to secondary airports which are potentially much further from the City centre but accessible enough by other forms of ground transportation. At these airports Ryanair are able to negotiate extremely aggressively and demand the lowest landing and handling fees. Additionally Ryanair is usually able to gain financial assistance with marketing and promotional campaigns at these airports.

As cost leader Ryanair strives to undercut all its rivals but this means very low income per fare and requires maximum utilization of its resources. Fortunately their financial policy ensures they are able to still profit handsomely from rock bottom fares. The aim is to break-even on fares but to make their profits out of ancillary charges and commissions from their partners. Ryanair has a number of affiliates such as Hertz car rental, Acumus insurance and booking.com all of whom are advertised readily on the Ryanair website. Since the website has high website traffic its partners are able to reach out to Ryanair’s huge client base and are prepared to pay good commissions to the firm for this privilege. Ryanair also generate income from advertising on board the aircraft. Ancillary revenue is generated from many of the services that traditional airlines wouldn’t charge for, such as large baggage into the cargo hold, allocated seating, snacks and drinks.

Ryanair’s strategy when purchasing aircraft is to buy new, uniform aircraft. This is beneficial for a number of reasons all of which directly help cost saving measures. Firstly, by being able to order same aircraft in bulk they are able to negotiate a better price per aircraft. Secondly, uniform aircraft mean that there are potential savings in staff training; air stewards being more familiar with all aircraft and maintenance will be simpler. Finally by buying new, the company has safer, more fuel efficient planes with lower maintenance costs. Safer aircraft also means greater consumer confidence, equating to more fare sales.

Furthermore Ryanair aggressively hedge and fix as many of their costs as possible, such as oil and aircraft prices so they are not subject to future price fluctuations which could adversely affect profitability.

The human resource policy is again directly related to reducing costs. Employees are expected to pay for their own uniform and equipment. Training given is the required minimum and staff utilization is among the highest in the airline industry. Many staff are employed on performance contracts and those who do not meet their expectations are readily replaced. Staff are also expected to take on a number of roles, cabin staff will also clean the aircraft prior to the next service, check in staff assist in boarding the aircraft etc.

Ryanair has successfully experienced years of growth both in the number of its aircrafts and passengers since its launch. However, with the global financial system recently suffering its greatest crisis in more than 70 years, existing business models of many aviation firms are coming under great strain. As this economic downturn bankrupts LCCs like XL and Zoom with more expected to follow, the question is whether Ryanair’s cost-leadership strategy is sustainable or not as it continues to offer lower fares in the face of high costs. Although Ryanair has posted losses along with other aviation firms for the latest quarter, it is expected to emerge from this downturn with fewer competitors because its â €š ¬1.8 billon balance sheet is one of the strongest in the industry. Additionally, as the credit crunch takes its toll, traditional airlines are not in a position to cut fares and the threat of new LCCs is virtually eliminated due to the lack of financing. Although Ryanair faces competition from substitutes like Eurostar, it is at an advantage because of Eurostar’s limited destinations.

Ryanair is sticking to its mantra, when the going gets tough, sell more seats for almost nothing. By offering low fares, Ryanair expects passengers to trade down to the low cost airlines rather than stop flying completely. This trend appears accurate so far based on passenger numbers as recession forces millions of passengers to focus on price. Additionally, the latest statistics from The European Low Fares Airline Association members show a 15.7% year-on-year growth in the number of passengers for 2008, indicating that the LCC model is robust, even in times of crisis. Consequently, there is no doubt that Ryanair looks poised for substantial profits and passenger growth in the coming years. However, in order to compete with other LCCs and maintain its continued market share growth in the future, Ryanair needs to improve its poor customer relations.

The sustainability of Ryanair’s cost leadership strategy also depends largely on the price of oil and how effective the firm is in cutting costs in order to continue offering low fares. According to the firm’s latest financial report, Ryanair will enjoy significantly lower oil costs thanks to their recent hedging programme, when most of their competitors are already hedged at much higher prices. These lower prices will drive Ryanair’s traffic growth, maintain high load factors and capture market share from higher cost fuel surcharging competitors. In order to cut costs, Ryanair close all its airport check-in desks and have passengers check-in online instead. Other cost saving methods not yet implemented include charging customers for using toilets on airplanes. These cost cutting ideas are not very popular among consumers and it means that Ryanair needs to improve its already tarnished brand image in the future which it had attained through negative press reporting and misleading advertisements .

The current strategy at Ryanair is expected to work so well that despite the recession Ryanair’s CEO has underlined the firm’s commitment to expansion. The firm is expected to grow at 20 percent a year because of a 180 aircraft’s on order from Boeing. These expansion plans for the future will require the company to increase its landing slots at airports and recruit more employees. Currently Ryanair has limited access to landing slots in major airports and the secondary airports are long distances away from city centers which could make it less attractive in the future. However, a remarkable cut in flights by other European airline carriers due to recession is creating enormous opportunities for Ryanair, as many major airports compete to reduce charges in order to attract Ryanair’s growth. Availability of skilled personnel shouldn’t be a problem for Ryanair due to recent high unemployment levels. However, Ryanair needs to improve its current low level of empathy for employees if it is to retain them in the future.

Even though Ryanair’s cost leadership strategy is robust and it looks set to serve them well in the future, there are some key areas within the business that can be improved on to enhance the firm’s profitability and brand image.

Ryanair has always been criticized for many aspects of its poor customer relations. According to The Economist, Ryanair’s “cavalier treatment of passengers” had given Ryanair “a deserved reputation for nastiness” and that the airline “has become a byword for appalling customer service … and jeering rudeness towards anyone or anything that gets in its way”. If Ryanair is to maintain its large customer base, it needs to ensure that it acknowledges its customers’ concerns and maintains a service focused attitude at all costs. Ryanair needs to invest in servicing customers better by providing a non-premium contact number, improving its non user friendly website, and simplifying the terms and conditions of the flight service. Ryanair should also create a frequent flyer program to establish a fixed customer base and encourage customer loyalty.

Ryanair is notorious for its high staff turnover which negatively affects its reputation as an employer. Over utilization of employees, poor remuneration package , and minimal training are a few other critical items to be considered by Ryanair if it is to retain employees in the future. Ryanair needs to understand that although it is currently possible to replace outgoing employees, but with time Ryanair’s overall image will be tarnished. Resultantly, attracting new employees could become impossible and this will hinder their expansion plans. Ryanair should incorporate a flexible benefits package solely designed to improve employee morale such as flexible working hours and extra holidays. To improve its image amongst employees, training at all employee levels must include exposure to similar techniques and methods that help promote the development of a uniform company identity.

Following huge success in Europe, Ryanair should consider introducing low cost transatlantic flights to support its expansion plans and attain a larger customer base. With a high demand for certain routes like London-New York and room for negotiation in airplane prices and airport slots mainly due to the current financial climate, it is an ideal time to further reap the rewards of the cost leadership strategy that has served Ryanair so well over the years.

Ryanair’s model looks set to survive the current industrial downturn through its lower costs and substantial cash balances. No airline is better placed in Europe than Ryanair to trade through this downturn. It will therefore continue to grow, by lowering fares, taking market share from competitors, and expanding in markets where competitors either withdraw capacity or go bust. By taking the recommended improvements into consideration, it looks like Ryanair’s cost leadership strategy seems ideal for the future.

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How Ryanair's Relentless Cost-Cutting Redefined the Airline Industry

Ryanair, Europe's leading budget airline, has seen an extraordinary trajectory of growth, outperforming its competitors by a wide margin in the airline sector. Its relentless approach to low-cost and operational excellence, combined with strategic route expansion, has undoubtedly played large parts in assuming a dominant role within the European airline industry. Let's delve into the factors that enabled Ryanair to become one of the few companies to generate substantial returns for its shareholders in an industry that's usually not lucrative.

Key Insights

Inspired by Southwest Airlines: Ryanair's transformation into one of the world's leading low-cost carriers was significantly influenced by CEO Michael O'Leary's insights gained from Southwest Airlines.

Relentless cost-cutting: Ryanair's exceptional growth and competitive edge are rooted in its status as the lower-cost provider, achieved through strategic initiatives such as negotiating lower airport landing fees and adopting a shrewd fleet acquisition strategy.

Spillover effects: The cost reduction strategies not only generate significant savings but also attract publicity, enabling essentially free marketing and word-of-mouth promotion.

Financial performance: Ryanair's relentless focus on low-cost operations has enabled it to expand rapidly, doubling its size and significantly increasing its market share since 2016.

Founding Story

Founded in 1984 in Ireland by the Ryan family, with Tony Ryan at the helm, Ryanair began its operations with a single small turbo-prop plane. The airline's initial aim was to disrupt the duopoly held by British Airways and Aer Lingus (both are now wholly owned by International Consolidated Airlines Group ) on London-Ireland flights by offering a lower-cost service.

Ryanair's early days were marked by significant challenges. The airline struggled to find its footing in a market dominated by established carriers. Its initial strategy focused on offering simple, low-price flights, but without a clear business model to sustain its operations, the early days were marked by financial difficulties.

The turning point came in the early 1990s when current CEO Michael O'Leary, who was initially hired as CFO in 1988 by the founder Tony Ryan, took a trip to the United States. There, he met with Herb Kelleher, co-founder of Southwest Airlines , and was inspired by Southwest's successful low-cost model. O'Leary returned to Ireland convinced that Ryanair could revolutionize air travel in Europe by adopting a similar approach.

The Southwest Airlines Inspiration

The meeting between Herb Kelleher and Michael O'Leary is a pivotal moment in airline history. The meeting was intended for O'Leary to learn from Kelleher's experiences and insights into the low-cost airline business model.

Southwest Airlines' model was straightforward yet revolutionary: use a single model of aircraft to reduce maintenance and training costs, focus on quick turnaround times to maximize aircraft utilization, offer point-to-point flights to avoid costly hub operations, and eliminate unnecessary extras that contributed to higher ticket prices.

Inspired by this model, O'Leary transformed Ryanair from a small, struggling airline into one of the world's largest. The "stealing of the idea," as it is sometimes dramatically phrased, was more about adapting a proven business model to a different market. Isn't it fascinating how a single event, leading to one crucial insight, can entirely rewrite the future for companies and even industries? Let's explore this low-cost model in depth.

Ryanair: Low-Cost Squared

Ryanair began its operations in 1988, flying between London Gatwick Airport and Waterford, Ireland's fifth-largest city, with a single turbo-prop plane. Initially focusing on the London-Ireland flight market, which was historically dominated by British Airways and Aer Lingus, the company spent the next 30 years expanding into markets across Europe, route by route. As of 2023, Ryanair operates over 3,600 daily flights across 94 hubs, carrying almost 200 million passengers annually – a doubling of numbers since 2016.

The bedrock of Ryanair's spectacular growth is its status as the lower-cost provider – by a wide margin – in an industry notorious for inefficiency and uneconomical operations. Ryanair exemplifies the benefits of a substantial cost advantage: aside from fuel, Ryanair’s unit costs are around half those of its closest competitor, easyJet , and significantly lower than those of other rivals such as Norwegian and Air Berlin. This cost leadership compels competitors to price their fares at double Ryanair's rates, which explains why Ryanair continues to take market share across Europe.

Ryanair's low-cost strategy is founded on extreme operating efficiency, with its greatest cost advantage being airport landing fees. Unlike the common industry practice, Ryanair traditionally operates from smaller airports where it can exert influence over airport owners rather than adopting a position of subservience. As a result, even when primary airports raise fees, Ryanair often secures concessions.

Its second biggest cost advantage comes from shrewd fleet acquisition strategies. While other airlines, influenced by pilot-focused cultures, prioritize diverse fleets of advanced aircraft, Ryanair has built a uniform fleet opportunistically. For instance, in 2003 amid an industry slump, it made a massive purchase of high-quality Boeing 737-800s at reduced prices. This bulk purchasing strategy not only yields volume discounts from manufacturers but also facilitates staffing an in-house maintenance crew, which proves to be vastly more economical than external alternatives.

These two cost advantages are mutually reinforcing, creating a deep and increasingly strong competitive edge. The acquisition of inexpensive planes enables Ryanair to operate profitably at low fares to smaller airports, allowing Ryanair to dominate traffic at these airports, which in turn leads to significantly lower landing fees. A recent order to double its fleet over the next eight years will not only ensure the continuity of these dynamics but may also accelerate them, as no other airline is expanding as rapidly as Ryanair.

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In essence, Ryanair is renowned for rethinking traditional aspects of the airline industry and relentlessly pursuing cost reductions. Its strategies are often controversial, yet rivals invariably follow suit to capitalize on similar savings. Examples from its extensive list include charging for food and beverages, imposing fees for luggage and airport check-in, abstain from frequent-flier programs, and avoiding the use of air bridges. Such bold initiatives not only allow Ryanair to sell seats at lower prices but also generate substantial publicity – much of it critical – which serves as an economical means of capturing the attention of potential customers. As CEO Michael O'Leary explained:

"As long as you run around generating noise, it drives people on to our website. And we don't spend hundreds of millions of dollars on marketing to do it. Charging for toilets continues to be the number one story that resurfaces in the press and it's the gift that keeps on giving. We've never done it, but it keeps coming up on social networks every three or four months, the media picks up on it and then someone writes a story on it." – CEO, Michael O'leary

Epitomizing the strategy of combining low prices with additional benefits, Ryanair continually leverages its competitive advantages. Several times, it has capitalized on the profitability and efficiency stemming from its cost-conscious operations to secure aircraft acquisitions at prices significantly lower than those available to rivals, burdened by higher structural costs. Moreover, Ryanair has started to make inroads into primary airports and the business travel sector, gradually supplanting Europe's retracting legacy carriers. This cultural commitment to low-cost operations has resulted in margins and returns on invested capital that are unparalleled in the airline industry, with operating income more than doubling between 2015 and 2023.

Ryanair's revenue growth from 1997 visualized:

In conclusion, Ryanair's remarkable journey from a modest operation with a single aircraft to becoming a dominant force in the airline industry is a testament to the power of innovation, strategic foresight, and a relentless commitment to cost efficiency. By challenging traditional business models and continuously seeking ways to reduce expenses, Ryanair has not only transformed itself but also the landscape of the European airline industry, ultimately benefiting both its shareholders and customers significantly.

Its aggressive expansion and low-cost strategies have made it a case study in business and aviation circles alike. As the airline looks to the future, with plans to further expand its fleet and reach, Ryanair stands as a shining example of how disruptive business models can lead to unprecedented success, even in industries facing naturally tough economic conditions.

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Case Study on Ryanair, the biggest low-cost European Airline

January 8, 2010

Case Abstract

Ryanair was the first budget airline in Europe, modelled after the successful U.S. low cost carrier, Southwest Airlines. Ryanair is one of the oldest and most successful low-cost airlines of Europe. This case study on Ryanair highlights its low fares business model, its business strategies and operations. The case further incorporates the history and business description of Ryanair, its’ operations and challenges as a budget airline. Features and benefits of the low cost business model are also discussed.

Table of Contents

• RyanAir: The ‘Southwest’ of European Airlines in 2007
• A year earlier…Ryanair, hedged fuel and a performance to envy
• Exhibit 1 : Summary Table of Results and Key Statistics
• Exhibit 2 : Ryanair Passenger Growth in Millions

History of Ryanair

Ryanair’s initial efforts as a low-cost carrier

• 1990 – Restructuring at Ryanair
• The growth of Ryanair

Analyzing the Low-cost Business Model

• Ryanair Low Fares Strategy and Standardized Operational Model
• Advantages of using secondary or airports located outside city
• Lower Wage bills
• Ryanair.com and Online booking of tickets
• Paid-for extras – Sources of additional revenue
• The easyJet challenge
• Ryanair – Failed merger bid and other Controversies
• Ryanair / Aer Lingus merger failure
• Ryanair and EU
• Some low-fare carriers around the World
• Exhibit 3 : List of Approved and prohibited mergers by the EU in the airline industry
• Exhibit 4 : Features and Benefits of the Low Fares business model
• Exhibit 5 : Comparative performance data of some major European LFA
• Exhibit 6 : Oil Prices Comparison, 1994 – 2007
• Exhibit 7 : Map of the European Union
• Questions for discussion

Introduction – RyanAir: The ‘Southwest’ of European Airlines in 2007

Ryanair, Europe’s biggest low-fares airline (LFA ) reported its third quarter results for 2007 with net profits dropping 27 percent compared to a net profit of 48 million a year earlier. Ryanair cited poor market conditions, fuel costs (oil prices at $90 a barrel) and concerns on recession in the UK and many other European economies for its current performance and not so strong future profit expectations. With average winter fares dropping almost 5 percent its’ underlying net profit in the three months to end December fell to 35 million euros ($52 million). Other factors that contributed included doubling of airport charges combined with reduction of winter capacity at Stansted , significant cost increases at Dublin Airport combined with longer sector lengths and staff costs which increased by 18 pct to 67 million euros. Ryanair’s net profit figure excluded a one-off gain of 12.1 million euros ($17.99 million) arising from the disposal of 5 Boeing 737-800 aircraft…

Ryanair was set up in 1985 and is one of the oldest and most successful low-cost airlines of Europe. In fact, Ryanair was one of the first independent airlines in Ireland. In 2001, many believed that Ryanair was like the Wal-Mart and Southwest Airlines of Europe. Ryanair transformed the Irish air services market where other airlines like Avair failed to compete with the more powerful national carrier Aer Lingus.

Ryanair began by offering low-cost no-frills services between Ireland and London. Ryan brothers – Catlan, Declan and Shane Ryan were the founding shareholders of Ryanair. Ryanair was set up with a share capital of just £1, and a staff of 25. Tony Ryan, their father and the chairman of Guinness Peat Aviation (GPA), an aircraft leasing company lent Ryanair its first airplane, a fifteen-seater turbo prop commuter plane. Ryanair’s first cabin crew recruits had to be less than 5ft. 2ins. tall so as to be able to operate in the tiny cabin of the aircraft. …Download full-text of this case study to read more.

Case Updates/Snippets

• Ryanair operates on more than 1,000 routes across Europe. Ryanair was founded in 1985 offering small flights from Ireland to England.
• Low-cost model in US – Ryanair’s entry in the US market – In 2008, Ryanair announced plans to operate in the United States. The plan includes forming a sister company that would begin servicing within three years. However, the start date has been delayed. Low-cost airline model attempts in the U.S. include Skybus in 2007 (which shut down within 10 months of operation) and Spirit Airlines (which shifted to the low-cost model in 2007).
• In recent years, fares have declined in the U.S. with budget carriers like Southwest Airlines and JetBlue Airways operating. However, the US airline industry has been struggling to match Europe where the cost of flying is very less.
• In 2011, Ryanair’s total passenger traffic included Spain market traffic (32.2 million passengers) at about 20 per cent followed by Italy and the UK. Last year, Ryanair became the biggest passenger carrier in Spain.

RYANAIR CASE STUDY ANALYSIS

Introduction.

This case study analysis is done in order to look at the current strategies which are used by Ryan air though the utilization of various strategies and models in order to generate a better future for the company (Caputo, Borbély, and Dabic, 2019). As various aspects have been developed in this report, the major focus would be on the unique strategies through which the company has made rapid success in the international market and has gained great competitive advantage.

1.     Ryan Air – Organizational structure, type, vision, mission, key objectives and the strategy

Organizational structure.

The structure of Ryan Air in accordance with the details that have been given has remained to be tall which means that the organization is having a functional structure. This functional structure of the organization represents a traditional functional structure in which the functional heads of the company report directly to the CEO of the company who is Michael O’Leary (Caputo, Borbély, and Dabic, 2019). The Chief Operating Officer and the Chief Financial officer report directly to the CEO of the company along with the Legal Secretary, HR manager and the ground operations officer (Caputo, Borbély, 2019). Hence it illustrates the ideal hierarchy of the company which is short and the company is being able to communicate effectively within different segments in order to ensure the consistency of the company to be permanent (Caputo, Borbély, 2019). The upper management staff has the following people:

Michael O’ Leary – Director and Chief Executive Officer

Neil Sorahan – Chief Financial Officer and Deputy Chief Executive

Ray Conway – Chief Pilot

Caroline Green – Director of Customer Service

Michael Hickey – Director of Engineering

Juliusz Komorek – Direct of Legal and Regulatory affairs and Company Secretary

Kenny Jacobs – Chief Marketing Officer

David O’Brien – Direct of Flight Operations and Ground operation

Edward Wilson – Director of personnel and In-Flight

Ryan Air – Mission and Vision statement

The mission statement of Ryan Air is:

“To offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost containment and efficiency operation.”

The vision statement of Ryan Air is:

“Ryan air’s objective is to firmly establish itself as Europe’s leading low-fare scheduled passenger airline through continued improvements and expanded offerings of its low-fare service.”

By using this strategy, Ryan Air has been success to gain large amounts of customers and growth since it has been incepted in the year 1985 (Caputo, Borbély, 2019). The different strategies which the company has used in order to maintain its competitive advantage and has survived in extremely turbulent times have been categorized into eight types: Maintenance of low fares for the customers, delivering the best performance in customer service, provision of frequent service point-to-point over short haul routes, achievement of lowest cost of operations in the industry, taking complete advantage of the internet (Caputo, Borbély, 2019), commitment to quality and safety maintenance, enhancing the results of operations through the ancillary services and focusing on the growth of the markets that are being targeted (Caputo, Borbély, 2019). The major focus of these strategies is to focus on the Ryan air’s core competencies which are exceptionally offered by it in the saturated market of airlines. By the provision of constant best value, the growth is expected to be growing for many of the next years to come.

2.     Ryan Air – SWOT and PESTLE analysis

Below are the internal and external analysis of the company in order to see where the company is functioning effectively and where it is not. For the internal analysis of the company, the SWOT analysis is conducted to look at the Strengths, Weaknesses, Opportunities and Threats for the company while the PESTLE analysis is conducted to see the effect of environmental factors on the company.

Ryan Air – SWOT analysis

Strengths: The Company has strong marketing strategies which has made strong brand reputation and brand recognition among the people and the use of aggressive price strategy has built a strong image of the company in the minds of the customers (Gürel, and Tat, 2017). The costing for the company is low due to the deals with the airport operators. Reputation is considered to be the biggest budget of the airline (Phadermrod, Crowder, & Wills, 2019). The publicity of the company is focused a lot due to the controversial issues and O’Leary. It had been published by the Air Transport World Magazine that Ryan Air had been the most profitable airline across the globe (Gürel, and Tat, 2017). The airline was titled as the “world’s favorite airline” in the year 2006.

Weaknesses: The cash for the purchase of new planes in tied up. The basis of the entire company is made upon the lowered cost market of airline (Phadermrod, Crowder, & Wills, 2019). The profit warning shocks have showed that the company might have used the cash reserves and the fiscal structure of the company is weak. The issues such as the EU Commission issue was backed down by the company which created trouble for it (Gürel, and Tat, 2017). The relations among the employees are found to be poor. The dependence of the company is complete made upon the Michael O’Leary who is the CEO of the company.

Opportunities: New routes for the company can be profitable for the market share of the company. The new planes would provide larger capacity to the company (Gürel, and Tat, 2017). The company must use the space of advertising on the planes and websites which could increase the revenue (Phadermrod, Crowder, & Wills, 2019). Collaborations could be made with other airlines while expanding within EU.

Threats:  the competitors such as BMI baby, Easyjet and Thomsonfly could act as the biggest threat to the company (Gürel, and Tat, 2017). If there is recession in the economy, the disposable income of the company would decrease, fluctuations in the prices of fuel could be a threat to the company. Restrictions could be put by the EU Commission on the company if does not adhere to the aid rules of the state (Phadermrod, Crowder, & Wills, 2019).

Ryan Air – PESTLE analysis

Political or Legal: change in the policies of the government would had a great impact on the company, due to which the company had to get involved in a number of disputes in both of the countries (Perera, 2017). The governments in the regions where company flies might support the flagship carrier. The local councils have been objecting to the noise of the company and new runways built supported the operations of the business a lot (Caputo, & Borbely, 2016).

Economic: the economic recession which was substantial in the economy of Ireland was growing but it changed suddenly but due to this reason a number of customers didn’t fly for business as it was cost cutting (Caputo, & Borbely, 2016). Uncertainty is caused because of fluctuating fuel costs. The factors like country wise conflicts have influenced the operations of the company.

Social: due to increasing trend of travelling, the opportunities of the company to fly in countries which were previously unconsidered has increase (Caputo, & Borbely, 2016). Business travel by the airline has increased due to the provision of lowered costs (Perera, 2017). A broad demographic of consumers have been attracted through this strategy.

Technological: the company is providing online check-in and self-service at the airport and the company has also used the internet facilities to increase its awareness among the consumers (Policy, 2018).

Environment: the aircrafts of the company are more environmental friendly. The company pays for the environmental taxes against the emission of carbon in the EU.

3.     Ryan – Change management

It has been suggested by the current report of Ryan Air that a change is needed in the organization due to the changes in the business environment of the company (Calvellini, Frosecchi, & Tufo, 2019). It has thus become important for the company to change its environment in accordance with the external factors of the company while analyzing the external environment of the company in order to become more effective in the industry (Calvellini, Frosecchi, & Tufo, 2019).

The company was facing a number of issues such as the reputation in the public which was deteriorating and the price of the shares of the company were falling (Calvellini, Frosecchi, & Tufo, 2019). The overall productivity of the company was suffering due to the dissatisfaction among the employees of the company. In this situation, the change management model which was created by Kubler-Ross was implemented in order to minimize the problems of the change in the company which was promised by the CEO to the public and the pilots of the company (Calvellini, Frosecchi, & Tufo, 2019). The change management model was applied in the following manner:

Shock: the shock was unavoidable and made the company to implement change management in the organization.

Denial: the managers of the organization started to inform the employees slowly about the change which has to be brought in the company (Calvellini, Frosecchi, & Tufo, 2019).

Frustration: the uncomfortable feelings among the employees would have been reduced through communicating with them.

Depression: motivating the employees at this stage is the most important task for the company. This is because the feelings are altered by the change (Calvellini, Frosecchi, & Tufo, 2019).

Experiment: the change must be started to get implemented at this stage and the managers must be motivating the staff through appraisals in order to implement the change successfully.

Decision – a set of rules must be made for the new change in the company so that the jobs of the people could be done consistently and smoothly (Calvellini, Frosecchi, & Tufo, 2019).

Integration – compliments and motivation are maximized at this stage in order to congratulate the people on their success (Calvellini, Frosecchi, & Tufo, 2019). The quality of work must be controlled at this stage of the change management.

4.     Ryan Air – Organizational management

The Ryan Air plans, organize, lead and control using the POLC model of management. By using this framework, the managers respond to the challenge of the problems which are creative and these have been categorized into four different stages which are planning, organizing, leading and controlling (Griffin, 2016). The implementation of these within the organizational structure of Ryan Air is described below:

Planning: in the planning function of Ryan Air, the company focuses on the objectives of the company which have to be achieved while analyzing the environmental conditions of the company (Ansoff, et al, 2018). The vision and mission of the organization are set by the managers of the company at this stage while predicting the future of the company (Griffin, 2016). Strategic planning, operational planning and tactical planning is then done which is based upon the objectives of the Ryan Air.

Organizing: at the level of organizing, the company allocate the responsibilities to all of the individuals and the efforts of all of the people are coordinated (Ansoff, et al, 2018). The duties and responsibilities of all of the people are decided at this stage and organizational culture, organizational design and the social networks within the company are then decided by the company (Griffin, 2016).

Leading: at this stage, the organization decides about the leadership that would be used at the organization, the decision making pathway which would be followed and the motivation among the members of the team (Ansoff, et al, 2018). The company here decides who it would be motivating the employees through different methods such as reward management, performance management etc. The communication among the groups and teams is decided too.

Controlling: the systems and processes are formulated here through the creation of different policies and understanding the contribution of behavioral sciences in understanding (Griffin, 2016). The performance standards and the corrective measures are made at this stage which help to know about the status and quality of performance. Managers at all levels and departments are

5.     Ryan air – business management techniques

The three major controls which are focused by the organization are the performance control, operational controls and the financial or budgetary control which are followed keenly within the organizations (Fayol, 2016). The tools and techniques which are majorly used by Ryan Air in this regard are as follows:

Performance control: the performance control in the organization is achieved by the performance management tools and techniques. This helps the organization to stay in competition and generate higher amount of productivity (Fayol, 2016). The major performance tools which are used by the organization are key performance indicators and the metrics which help in showing how well the company is performing against the goals of the company, performance appraisals, reward management and management by objectives (Fayol, 2016).

Operational control: the operational control consist of controlling and managing the basic operations of the company which happen in the everyday life (Fayol, 2016). The tools and techniques which the company uses in the operational control are the marketing control which consists of researches and trends in the market, the control of human resources in the company which consist of performance control and behavioral control and the control over the equipment and supplies of the company (Fayol, 2016).

Financial control: the company controls the finances of the organization through top down budgeting, bottom up budgeting, flexible budgeting and zero based budgeting. This helps the company to take control over the finances of the overall company.

6.     Ryan Air – Leadership

The leadership of the Ryan air is based on the leadership strategies of Michael O’Leary ways of business management (Buchan, 2017). The leader of the company seems to be accepting the challenges for the company and makes strong commitments among the executive of the company. The leadership of Michael O’Leary is divided into five levels which are:

Level one: being capable of making productive contributions through the knowledge, skills, talents and good work habits which the leader is having (Decker, 2016).

Level two: contributing as a team member in the company and contributing his individual capacities to achieve the objectives of the group and working efficiently in the group settings (Buchan, 2017).

Level three: he is a competent manager as he knows how the people could be organized along with the resources to achieve the objectives of the company.

Level four: the leader of the company has a clear and vigorous vision of the company which has made him to achieve higher standards of performance in the company (Decker, 2016).

Level five: the leader of the company is considered to be building greatness by the blend of humility which is paradoxical and professional will.

The leadership of Michael O’Leary has been able to utilizing a number of steps to make Ryan Air as the no. 1 airline of UK and the major reason behind this are the driving forces of O’Leary rather than his restraining forces (Buchan, 2017). The blend of greatness in every task he does with the abilities he is carrying forms the greatest forms of leadership. In short, the leader possess democratic style of leadership with a combination of autocratic (Decker, 2016).

7.     Ryan Air – Human Resource functions

Though the employer and employee relationships were previously not good in the company. But now as the networks among the people are focused by the company, the relationships of the company between the employee and employers are focused and developed (Piludis, Jones, & Hansen, 2018). The company follows the common employee lifecycle that has been made standard in the business industry. The payroll of the company is streamlined and the services of the human resources by entering into a contract while utilizing the ResourceLink (Buchan, 2017). The system of the Ryan Air is operated by the staff of the company. There are a number of programs which are made for the employees such as the payroll programme, health and safety programmes, training programmes and expenses. The internal communication system in the company was not implemented until the year 2011 (Piludis, Jones, & Hansen, 2018). Signagelive was considered to be the provider of the company which provides daily programming list to the 44 bases of Ryan air all across the Europe (Ahmed, et al, 2019). For example, the reward management and appraisal programmes for the employees has benefitted the relationships of the employers and employees a lot through the utilization of change management programme in the company (Piludis, Jones, & Hansen, 2018). This created a sense of loyalty is created among the employees of the company through this and thus the overall productivity is increased.

The overall success of the company is found to be dependent upon the differentiation strategies which the company has used in order to make it the number one airline all across Europe.

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