Operation Management in the Airlines

Table of Contents

1. Introduction 2. Ryanair and its operations management 3. British Airways and its operations management 4. Discussion 4.1 Operations management is a key to success 4.1.1 Strategy comparison 4.1.2 Process comparison 4.2 Response of FSC 5. Recommendation 6. Conclusion References Appendix

Operations Management in the Airlines 1. Introduction Impact of Gulf War in 1991 resulted in the decline of air traffic. Despite this effect, a profit of £293,000 could be made by Ryanair at the end of this year (Ryanair 2010a). What is the key success of Ryanair? This report will analyse and discuss the operations management of Ryanair, which is the low-cost carrier (LCC) operating mainly in the European region compares to British Airways (BA), which is the main full-service carrier (FSC) in the same area and also operate in other regions around the world. 2. Ryanair and its operations management Ryanair is one of the small leader airlines in Europe. It was in the similar cycle to many airlines through out the world; make profit for a period of time and lost after that for a while and then retrieve to have positive margin again as shown in Figure 1 (Cento 2009, p4). In order to jump out of this cycle, Southwest Airline model, the first successful low-cost carrier, was adopted into Ryanair management by Michael O’Leary, new CEO since 1990 (Box and Byus 2007). The implement of operation management of Ryanair can be divided into two sections; internal and external resources.

Source: ICAO and IATA forecast 2006-2007 Figure 1 Net margin profits of the world air line industry There are many areas that Ryanair manages internal resources effectively. Being low-cast carrier, the operating cost is managed to the minimum as well as, absolutely, the ticket fare which is the important issue to draw passengers. Firstly, human resource management is applied; there is non-union operation within Ryanair and all crews and staff are awarded base

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