Ryanair Case Study

(Ryanair's success attributed to its low pricing strategy)

Ryanair has been so successful thus far due mainly to its pricing strategy. Basically, Ryanair's focus is on providing low cost, efficient, frequent connections. There will be no offering of other frills such as in-flight entertainment, complimentary food or any kind of supporting services on their flights. As a result, Ryanair has no need for the many subsidiaries that other airlines have (Felsted 2003).

Also, Ryanair’s choice of a standardised fleet of aircraft of the same specification allows the cockpit crew ito be able to fly any aircraft in the fleet which saves time and scheduling. This helps in cutting training costs and time as well. As maintenance procedures are similar for all the aircraft, only one category of engineer is required, who is qualified to work on any single aircraft in the fleet and only one inventory of parts needs to be stored. Training of cabin crew is simplified and the ability to bulkbuy means that equipment and parts can be obtained more economically. Inventory volume and value are affected, allowing for greater operational and maintenance flexibility (Felsted 2003).

Besides that, Ryanair outsources as many noncore activities and wherever possible long-term contracts have been entered into at favourable rates to limit exposure to unpredictable cost fluctuations. Ryanair used contractors for its airlines heavy maintenance so that competitive prices can be obtained without having to upkeep specialised and up-to-date labour force for a modest fleet. Additionally, the fact that the maintenance activity is established by contract allows Ryanair to move it to wherever it can be performed and thus avoid the disruptions of industrial unrest that has afflicted other airlines. Ryanair does provide its own handling and ticketing services in Dublin, but it has bought-in these services elsewhere. By outsourcing all of the above, Ryanair avoids having to maintain management and...