A Case Study of Ryan Air

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Date Submitted: 09/27/2012 08:13 AM

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OVERVIEW OF RYANAIR

Ryanair was founded in 1985 by the Ryan family, headed by Tony Ryan to provide scheduled passenger airline services between Ireland and the UK as an alternative to state monopoly carrier Aer Lingus. Despite a growth in passenger volumes by the end of 1990, it recorded a loss of £20m Irish pounds. This resulted in a fight to survive and the 1990s saw the airline successfully restyle itself to become Europe’s first low-fares, no frills carrier built on the model of South west Airlines, the highly successful Texas-based operator.

INTRODUCTION:

South west airline was the first low cost carrier (LCC) to rival major carriers and it implemented the original low-cost model as described in an article by Strategic Direction (2006) to possess the following characteristics:

• low fares;

• high frequency flights;

• point to point service;

• no free meals or drinks on board;

• no seat assignment;

• short flights; and

• flights to secondary airports.

Ryanair business model was built on the above characteristics listed above.

TASK 1: Using appropriate models, critically account for Ryanair’s success thus far.

Ryanair gained success and outperformed its competitors (Aer Lingus, British Airways, Airfrance, and Easy Jet) by busting the market. The Company employed several market busting strategies which summed up as absolutely no frills (meals, seat allocation or frequent flyer program) and has led to the company’s huge success. The following tools will be used to explore Ryanair success. They are:

• Porter’s generic strategy.

• Five force model of industry competition

• SWOT analysis

• Pricing strategy

• Market expansion

• PORTER’S GENERIC STRATEGY:

In strategic management study, the low fare cost model approach is in line with Michael Porter’s theory of generic strategy (Strategy Direction, 2006) that there are three major strategies that companies can adopt to gain...