There are many low-cost airlines in the world. The Company has also recently announced that it plans to freeze all growth in the United Kingdom and to reduce capacity at its London (Stansted) base by 40% between October 2009 and March 2010. Ryanair’s low fares are designed to stimulate demand, particularly from fare-conscious leisure and business travelers who might otherwise use alternative forms of transportation or choose not to travel at all. The new initiatives to be rolled out over the coming year include: Referring to the Ryanair case, critically discuss the extent to which low cost competitive strategies are sustainable. Antagonistic relationships with competitors, Dependence of Key personnel (Michael O’Leary). This, on top of the launch of Ryanair Sun, is part of the airline’s overall strategy to thrive further in Southern and Eastern Europe. Ryanair generic strategy is cost leadership. New Year investment buys: From Ryanair to Calpol - where our team plan to put their money in 2021. It started off... © Copyright 2020 Airways International, Inc. All rights reserved. 6+50% Adjusted net profit after tax502. Ryanair is Europe’s greenest, cleanest airline. Budget airline Ryanair has announced that they are to slash the price of tickets over the next six to 12 months. Management attempts to obtain competitive rates for such services by negotiating fixed-price, multi-year contracts. Ryanair dominates the discount airline segment in Europe. Ryanair announced it has joined the ambitious “Fuelling Flight Initiative” in its commitment to supporting Sustainable Aviation Fuels (SAFs) as an essential element to achieve net-zero carbon emissions in the aviation industry. Ryanair bets on growth through recession July 2008 Text; Tables; ... Is this a sensible strategy and, if so, will Ryanair be focused enough to see it through? Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Ryanair believes it will have opportunities for continued growth by: (i) initiating additional routes in the EU; (ii) initiating additional routes in countries party to a European Common Aviation Agreement with the EU that are currently served by higher-cost, higher-fare carriers; (iii) increasing the frequency of service on its existing routes; (iv) starting new domestic routes within individual EU countries; (v) considering acquisition opportunities that may become available in the future; (vi) connecting airports within its existing route network (“triangulation”); (vi) establishing new bases in continental Europe; and (vii) initiating new routes not currently served by any carrier. According to reports by the Association of European Airlines (“AEA”) and the airlines’ own published statistics, Ryanair has achieved better punctuality, fewer lost bags, and fewer cancellations than all of the rest of its peer group in Europe. Since the launch of the Internet reservation system, Ryanair has heavily promoted its website through newspaper, radio and television advertising. Point-to-point flying (as opposed to hub-and-spoke service) allows Ryanair to offer direct, non-stop routes and avoid the costs of providing “through service,” for connecting passengers, including baggage transfer and transit passenger assistance. 0325. The low-cost leader in an industry has build and maintains equipment, labour costs and working practices that deliver the lower costs in … 21+51% Adjusted basic EPS (in euro cent)24. Ryanair Marketing Mix. They copy proven innovation and use entirely incremental innovators. Do you think that the aviation industry will recover by 2024? Profit is expected to be made from Laudamotion over the next two years and will require around €100 million of startup capital. This ambitious initiative provides recommendations on the sustainability aspects of the EU’s policy design to support SAFs. For the 2009 fiscal year, ancillary services accounted for 20.3% of Ryanair’s total operating revenues, as compared to 18.0% of such revenues in the 2008 fiscal year. Ryanair has not had a single incident involving major injury to a passenger or a member of its flight crew in its 24-year operating history. Fuel will also be a “major cost headwind,” expecting to rise to $80 per barrel compared to last year’s average $58 per barrel. The new planes also allowed Ryanair to open four bases in Burgas, Memmingen, Naples, and Poznan. The development of its own Internet booking facility has allowed Ryanair to eliminate travel agent commissions and third-party reservation systems costs. Ryanair wants to grow its existing subsidiaries rather than setting up more airlines, though management will not rule out acquisitions if rival carriers fly into difficulty during the winter season. MSc Management Strategy and Operations Management 2013 / 2014 - GLASGOW MMN220511 Shaishav Kharwar (Mat No: 200813679) Course work 1 Resit Report on RYANAIR Module Leader Dr.Colin Combe Introduction The company chosen in this report is Ryanair in the airline industry. The addition of these planes created 1,500 new jobs and established over 600 new promotions for staff. Secondary and regional airports are generally less congested than major airports and, as a result, can be expected to provide higher rates of on-time departures, faster turnaround times (the time an aircraft spends at a gate loading and unloading passengers), fewer terminal delays, more competitive airport access, and lower handling costs. The airline believes that the political circumstances in Venezuela, Libya and Iran will elevate the price of oil. The airline also launched over 260 new routes to destinations in Jordan, Turkey, and Ukraine. Ryanair assigns a Part 145 certified mechanic to oversee engine overhauls performed by other parties. https://t.co/eI7poVZGOV #airline pic.twitter.com/lxCEplYXe9, — Henry Harteveldt (@hharteveldt) May 22, 2018. As a result, Internet bookings grew rapidly, and have accounted for approximately 99% of all reservations over the past several years. Ryanair is looking to increase their stake in Niki Lauda’s Laudamotion from 24.5% to 75%, subject to EU approval. However, due to Ryanair’s low cost strategy, the tickets for these services are far more expensive than Ryanair’s flight tickets (Dudovskiy.J, 2012). Although the company had encountered different problems, specifically in line with its cost structures, the company had been able to survive and grow in the marketplace. Ryanair currently performs heavy airframe maintenance, but contracts with other parties who perform engine overhaul services and rotable repairs. Weakness: Ryanair’s weaknesses include internal factors slowing down progress. According to comparative data from Aer Lingus, easyJet, and the AEA, Ryanair’s “on time” performance record exceeded that of its principal competitors, including: Aer Lingus (approximately 73%); Air France (approximately 84%); British Airways (approximately 78%); easyJet (approximately 71%); ufthansa (approximately 84%); and Alitalia (approximately 76%). Looking for a flexible role? Study for free with our range of university lectures! Ryanair implement different marketing strategyto make the company survive in the competition and to be able to gain competitive position in the airline market. This commitment begins with the hiring and training of Ryanair’s pilots, flight attendants, and maintenance personnel and includes a policy of maintaining its aircraft in accordance with the highest European airline industry standards. On December 1, 2008, Ryanair made a new offer to acquire all of the ordinary shares of Aer Lingus it did not own at a price of € 1.40 per ordinary share. The COVID-19 crisis marked a significant decline in business travel and corporate conferences as companies and corporations began a shift toward video meetings and adapting to virtual training and networking. As a result of this airport’s high charges, certain routes are not economically viable to operate during the winter when the Company typically experiences lower load factors and fares. The airline rapidly blamed the ATC strikes that to this day are still happening throughout France. 4375. @Ryanair discloses ancillary product sales info in its FY2018 report. Good-value pricing is the first customer value-based pricing strategy. Ryanair sells seats on a one-way basis, thus eliminating minimum stay requirements from all travel on Ryanair scheduled services. Ryanair noted the EU Court’s rulings on French and Swedish State aid schemes favouring Air France and SAS over all other EU airlines. Ryanair attempts to control airport access and service charges by focusing on airports that offer competitive prices. The airline issued a profit drop also for the next year which will fall into a range of €1.25 billion and €1.35 billion due to ATC disruption, security events, as well as Brexit. The carrier also dedicated a section to Brexit. On February 22, 2008, Ryanair upgraded the reservation system to a more scalable version, which offers more flexibility for future system enhancements and to accommodate the planned growth of Ryanair. In the 2009 fiscal year, Ryanair flew an average route length of 409 miles and average flight duration of approximately 1.55 hours. Commitment to Safety and Quality Maintenance, Enhancement of Operating Results through Ancillary Services. Ryanair achieves this by focusing strongly on the execution of these services and by primarily operating from un-congested airports. Ryanair’s Customers is one strategic group that indicates its position in the market based on the existing competitive strategy. Ryanair believes that its costs will substantially increase over the next 12-24 months. Ryanair Focuses on Leisure Routes In Winter 2021 Flight Schedule. Wowza! Founded in 1985, it has expanded rapidly capitalising on the opportunity ( see SWOT ) of European deregulation of the air industry in 1997. Ryanair’s strategy is to deliver the best customer service performance in its peer group. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. In 2000, Ryanair converted its host reservation system to a new system, which it operates under a hosting agreement with Navitaire that will terminate in 2013. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Customer Service. Skills & experience: Prior to joining Kingspan he was the Chief Financial Officer of Greencore Group Plc, having previously worked in IWP International Plc, PricewaterhouseCoopers and BDO Simpson Xavier accountants in Dublin. Ryanair has entered into agreements on competitive terms with external contractors at certain airports for ticketing, passenger and aircraft handling, and other services that management believes can be more cost-efficiently provided by third parties. The September 2017 pilot rostering failure came to the resolution of €800 million being returned to shareholders via buybacks. The firm is expected to grow at 20 percent a year because of a 180 aircraft’s on order from Boeing. The Key success factors of the industry are planning and forecasting, technology, marketing and branding, strategic alliances, culture and outsourcing. Enhancement of Operating Results through Ancillary Services. Ryanair went for Laudamotion due to their valuable portfolio of slots that they have in Germany, Austria, and Spain. Management also believes that the terms of its Boeing contracts are very favorable to Ryanair. Geoff Doherty is the Group Chief Financial Officer. The airline believes that the political circumstances in Venezuela, Libya and Iran will elevate the price of oil. Company Registration No: 4964706. Fuel will also be a “major cost headwind,” expecting to rise to $80 per barrel compared to last year’s average $58 per barrel. Ryanair is the largest airline in Europe as defined by passenger numbers and is the largest in the World for International passengers. A wide range of customer service and digital enhancements such as a new website and app, new uniforms and cabin interiors, allocated seating and tailored business, leisure and family products were all launched in Years 1,2, 3 and 4 of the programme. At the same time, Ryanair enjoyed the better financial position and applied expansion strategy such as Ryanair ordered 45 new Boeing 737- 800 aircraft (189-seat capacity) worth $2b in 1998, and the company was joined to the NASDAQ-100 in 2002, and Air Transport World magazine announced it the most profitable airline in the world in 2006. The carrier expects its staff costs to rise by almost €200 million, half of which is higher pay for staff on the front line as well as an increase in employees to the company. Ryanair’s growth seems to be unstoppable, as the carrier is still due to receive 135 firm Boeing 737 MAX 200 ‘Gamechanger’ aircraft, with an option for a further 75. If you need assistance with writing your essay, our professional essay writing service is here to help! The Company will replace these check-in desks with significantly fewer bag-drop desks. Ryanair conducts a daily conference call with Ryanair and airport personnel at each of its base airports, during which the reasons for each flight delay and baggage shortshipment are discussed in detail and logged to ensure that the root cause is identified and rectified. At that time, the plan was to continue growing the core Ryanair no-frills, no-nonsense business while using Aer Lingus to attack the segment of the market occupied by airlines linking primary airports and offering a friendlier customer service. The offer of € 1.40 per share represented a premium of approximately 25% over the closing price of € 1.12 of Aer Lingus on November 28, 2008. Mr. O’Leary stated that there will be an incredible growth in the fore coming five to ten years with the replacement of high cost, profit losing, short-run flights run by flag carrier and altering them to Ryanair. Ryanair endeavors to control its labor costs by seeking to continually improve the productivity of its already highly productive work force. Do you have a 2:1 degree or higher? Threat: Threats to Ryanair are external factors blocking development. Ryanair’s average scheduled turnaround time for the 2009 fiscal year was approximately 25 minutes. A good example of Red Ocean Strategy is the European airline operator Ryanair (or Southwest if you like in the US). However, the purchase of aircraft from a single manufacturer enables Ryanair to limit the costs associated with personnel training, maintenance, and the purchase and storage of spare parts while also affording the Company greater flexibility in the scheduling of crews and equipment. The Company thereafter increased its interest to 29.3% during the 2008 fiscal year, and to 29.8% during the 2009 fiscal year at a total aggregate cost of € 407.2 million. Although Ryanair seeks to maintain its fleet in a costeffective manner, management does not seek to extend Ryanair’s low-cost operating strategy to the areas of safety, maintenance, training or quality assurance. It refers to offering the right combination of quality and good service at a fair price – fair in terms of the relation between price and delivered customer value. Building on its success in the Ireland-U.K. market and its expansion of service to continental Europe and Morocco, Ryanair intends to follow a manageable growth plan targeting specific markets. Ryanair currently operates only “next generation” Boeing 737-800s. Info: 3175 words (13 pages) Essay In recent periods, and with increased effect in the 2008 and 2009 fiscal years, Ryanair’s low-cost, low-fares model has faced substantial pressure due to significantly increased fuel costs and reduced economic growth (or economic contraction) in the economies in which it operates. The Company has recently announced capacity reductions, primarily at Dublin Airport, the most expensive airport in terms of airport charges that Ryanair serves. Since then the growth rate has increased. Moreover, Ryanair should use its young staff to improve its customer service and give a good image to the customers. Ryanair believes that its costs will substantially increase over the next 12-24 months. Ryanair Loses Legal Fight Against French, Swedish Airline State Aid More FILE PHOTO: A Ryanair Boeing 737-800 aircraft approaches Paris-Beauvais airport in Tille, northern France, September 27, 2018. Within this space, Ryanair and Easyjet are the two biggest low-cost airlines in the region (Elderman 2014; Dowling 2010). The carrier states that it is likely that flights into the UK could be treated as non-EU and possibly affect the licensing and flight rights that the carrier currently has in the UK. Mombasa airport are reportedly developing a strategy to “encourage low-cost carriers from the U.K. to fly here,”, and are in talks with both Ryanair and easyJet about operations to the country. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. This acquisition proposal was, however, blocked by the European Commission on competition grounds. F igure 4 show the evolution of Ryanair Italian domestic market from 2008 to 2009 and the opening of O’Leary had visited Southwest and got convinced the low cost, no-frills, model was right for Ryanair. The carrier expects its staff costs to rise by almost €200 million, half of which is higher pay for staff on the front line as well as an increase in employees to the company. He did concede, however, that Airbus would need to solve issues with the engines on their A320neo aircraft and also approach the carrier with no worries about Boeing undercutting the competition. Ryanair also periodically runs special promotional fare campaigns. The increase in the fuel price is always the risk for the airlines. This year, Ryanair’s average load factor was of a strong 95%. Customer satisfaction is measured by regular online, mystery-passenger and employee surveys. Secondary and regional airports also generally do not maintain slot requirements or other operating restrictions that can increase operating expenses and limit the number of allowed take-offs and landings. Compensation for employees emphasizes productivity-based pay incentives. As part of its non-flight services, Ryanair distributes accommodation, travel insurance and car rentals, principally through its website. One-Stop Digital Resource on Maritime / Shipping Industry. Analyst opinions, market reports, industry news, shipping & capital markets data, stocks, bonds, FFAs Ryanair’s continuous acquisition of new Boeing 737-800s has already and will continue to significantly increase the size of its fleet and thus significantly increase its aircraft equipment and related costs (on an aggregate basis). The carrier said that its punctuality has been negatively impacted due to the adverse weather in the winter, which caused snow closures at bases like Dublin and Stansted back in February/March time. Ryanair will still continue to invest in its 6-year growth plan which will accommodate up to 600 aircraft in its fleet, carrying 200 million passengers per year. Customer Service Costs. Overall, it does seem as if the carrier is still growing strong and will continue to do so over the next few years. *You can also browse our support articles here >. All work is written to order. Good-value Pricing – Customer Value-based Pricing. 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The UK is due to leave the European Union in March 2019. Ryanair’s “on time” performance record (arrivals within 15 minutes of schedule) for the 2009 fiscal year was 88%. The airline’s European consolidation is a reality. The emergence and growth of no frills, low-cost carrier shave radically altered the nature of competition within the industry. Ryanair’s business level strategy is … During the 2007 fiscal year, the Company acquired 25.2% of Aer Lingus. Short-haul routes allow Ryanair to offer its low fares and frequent service, while eliminating the need to provide unnecessary “frills,” like in-flight meals and movies, otherwise expected by customers on longer flights. The airline’s crippling pilot dispute was also solved, with a new 5-year pay deal for both pilots and cabin crew. There can be no assurance that the Company will be successful in doing these things or that doing so will allow the Company earn profits in any period. The Irish low-cost carrier also took delivery of 50 brand-new planes, increasing the fleet size to 430 Boeing 737s. The components parts of the strategic plan are explained under. 7. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Global footprint: Tracks Google results for 120+ million keywords in many languages across 28 markets The reactive innovation strategy is used by companies: which are followers; have a focus on operations; take a wait-and-see approach; look for low-risk opportunities. Between 1985 and 2011, Ryanair’s passenger numbers increased by more than 15,000-fold, from 5,000 to nearly 76 million. Compare Across Channels: use someone's AdWords strategy to drive your SEO growth, or use their SEO strategy to invest in paid search. The employee share option trust and employees who own 18% of Aer Lingus would have received over € 137 million in cash. Regarding operational performance, Ryanair’s on-time scores dipped from 88% to 86%. Ryanair provides frequent point-to-point service on short-haul routes to secondary and regional airports in and around major population centers and travel destinations. 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 Company met Aer Lingus management, representatives of the employee share option trust and other parties. The French airport tax deferral and the Swedish loan guarantee were introduced at the beginning of the Covid-19 crisis with nationality conditions. Free resources to assist you with your university studies! Low cost or no frills marketing strategies are of great interest to marketers since the marketing mix employed tends to run in opposition to what makes a great brand – and Ryanair is a great brand and a very successful business. Depreciation of Pound against US Dollars. Published: 1st Jan 2015 in MIAMI - History has shown that airline mergers, interline agreements and alliances have always adversely affected the employees; specifically, the pilots that fly for... LONDON – As we know, Flybe (BE) went into administration back in March this year, following a few years of financial downturns. The Ryanair Business Strategy is one of operational excellence. Opportunity: Opportunities are external factors promoting expansion. However, Ryanair also assumes that the rise in fuel prices can be mitigated with the arrival of the much more fuel efficient 737 MAXs over the coming years. ST strategy Ryanair should keep buying the new aircraft. +19% Profit before tax560. Moreover, Ryanair Sun, the carrier’s new charter airline based in Poland, also operated its first flights at the end of the financial year. If you don’t have 5 minutes right now, no problem. The carrier believes unit costs are going to rise upwards of 9% due to higher staff and oil costs, adding up to €400 million. Management believes that Ryanair’s operating costs are among the lowest of any European scheduled-passenger airline. 50% of pax pay for allocated seats, 20% for priority boarding. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Growth capacity under strategy: Table 2: Ryanair’s financial performance(€Million) 20122011Changes Total revenue4,324. 6400. “The delivery of ATC services in Europe is lamentable and creating unacceptable delays for our customers,” said Ryanair in a statement. It also comfortably topped the 16 per cent growth rate seen in the whole of 2019, before the pandemic hit. However, as the Company was unable to secure the shareholders’ support (to sell their stakes in Aer Lingus to Ryanair), the Company decided on January 28, 2009, to withdraw its new offer for Aer Lingus. As part of the implementation of the new reservation system, Navitaire developed an Internet booking facility. Commitment to Safety and Quality Maintenance. With this batch of brand-new planes, the total delivery count rises to 210 if they so wish to exercise the additional options. Political Ryanair Company started the business operation from Cardiff, and due to the change of political views, it is focusing on improving and expanding its operation. Vision Statement: A world where passengers fly for free. It is a significant issue, mostly due to the current crisis on Covid 19. We unveiled the fifth year of our “Always Getting Better” programme, including our first ever Environmental Policy, in which Ryanair committed to eliminating all non-recyclable plastics over the next five yea… Ryanair further endeavors to reduce its airport charges by opting, when practicable, for less expensive gate locations as well as outdoor boarding stairs rather than more expensive jetways. ... a growth company for years into the future. In addition, in March 2006, Ryanair introduced its Internet check-in service and has since introduced kiosk-based check-in systems at its main base at London (Stansted) and its bases in Belfast, Frankfurt (Hahn), in Germany, and Girona, in Spain. At 142 million passengers in 2014, that’s a profit of $7 per passenger, and that wasn’t even a good year by Ryanair standards.
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