Category: Ryanair

Introduction

Ryanair is Europe’s biggest low-admissions, essential transporter; the association began in 1985 as a standard traveller aircraft however re-propelled itself in 1990 as a low-passage bearer, mimicking itself on the Texas based Southwest Airline’s plan of action. The organization right now works its business more than 27 nations and conveys in excess of 66 million clients every year.

This report attempts a point-by-point investigation of Ryanair. It will take a gander at Ryanair’s present methodology and how that technique is overseen, including an assessment of the assets and abilities which permit Ryanair to increase an upper hand on its rivals. It looks to distinguish how its centre business’ activities and capacities influence the aircraft’s client relations and initiatives with respect to its general system. Ryanair is Europe’s biggest carrier and the world’s fifth aircraft within excess of 2000 everyday flights. The customer have become more consistency due prices of Ryanair and it has reached 1 billion clients in 2017 . Because of its minimal effort plan of action, Ryanair has had a consistent development with its income developing year on year.

The majority of Ryanair success came from Michael O’Leary and generated a lot profit for the company his vision would be cheap and quicker service and don’t spend too much money on big commercial but instead use newspaper as commercials. In 2008, Ryanair had carried about 50,9 million passengers in about 25 European states with a total of 163 Boeing 737-800 planes, after 1991, Michael O’Leary became the Chief Executive Officer of the airline.

SWOT analysis of Ryanair

Strengths of Ryanair

Ryanair transports more nearly 130 million travellers every year on well over 2,000 scheduled flights. As of December 2018, it could travel to 215 destinations in 37 countries. In 2017, it was the first European airline to fly over 1 billion passengers (Ryanair, 2018).

Ryanair is a leader of the low-cost airline market model and has gained a great deal of industry experience over the years. The fact that it is a market leader in Europe helps it to gain a major cost benefit over the other EU airlines. However, in 2018, it earned the 11th best low-cost carrier in the world to be voted for by travellers. It also ranked fourth best low-cost carrier in Europe in 2018

The presence and estimated age of the Ryanair fleet is indeed remarkable. Ryanair is the biggest carrier in Europe for the amount of passengers transported. It only uses Boeing 737-800 aircraft and the estimated age of the aircraft is 5.5 years. This has more than 300 aircraft in service as of December 2018 and plans to expand the scale of the fleet to 585 by 2024. For such a large and efficient fleet in service with more likely to be introduced to the roster, Ryanair will and will be willing to significantly reduce its prices and accommodate more customers. In reality, it aims to transport 200 million passengers a year by 2014.

In May 2018, Ryanair announced a profit increase of 10 percent. On 31 March 2017, after vat, the figure for the year ended was €1,31 billion, and on 31 March 2018, €1.45 billion. A 9% rise in traffic and a 3% decrease in average ticket for the period 31 March 2016 to 31 March 2018 was also announced by the airline.

Weaknesses of Ryanair

Ryanair’s weakness in the management of ties with employees was demonstrated in the summer of 2018 when pilots and the cabin crew forced him to cancel flights to some of the most popular tourist destinations. Their pay and working conditions were met. In fact, the airline will take the appropriate measures to avoid the potential occurrence of similar disruptions.

Although the decline was primarily attributed to strikes and flight cancellations, it’s also true that for many years the airline has been poorly performed in a variety of polls and surveys.

Opportunities for Ryanair

In countries like the UK, Germany, Italy and Spain, Ryanair has a good presence. Such markets certainly give the airline additional growth prospects. This is also worth investigating the development of new roads. Additionally, in summer 2018 Ryanair launched more than 200 new routes. The latest routes include Jordan, Turkey and Ukraine, but are not limited to the markets. Ryanair also explores possibilities of diversifying into other parts of the aviation market in Europe and beyond, in addition to launching new itineraries. These plans that Ryanair planned could be affected with recent Brexit results but there few agreements that would be made throughout the process of Brexit.

During the last year, Ryanair’s profits fell by 21%, to €243 million, owing to reduced prices and increased expense of fuel and workers.In the three months to June, the largest budget carrier in Europe described the United Kingdom as ‘one of the two most vulnerable markets, with Brexit’s problems negating customer confidence and expenditure.’

Ryanair’s Threats

External events.

Air travel is prone to global activities and natural disasters, such as erosion and volcanic ash disturbance irrespective of carriers. This exposure to airlines with a more regional network may well be mitigated by a fairly focused geographic exposure of Ryanair. When Ryanair was involved in a major crash, the public perception may be negatively impacting its past record when it comes to fatal accidents.

Loss of competitor capacity discipline.

Ryanair is much more cautious and reasonable in its markets than was always the case in the past in terms of capacity expansion. Any lack of this discipline between competitors could jeopardise Ryanair’s friendly yield climate.

Air travel taxes.

Higher air travel taxes are raising demand due to price elasticity. These taxes usually account for more than one long-distance ticket than a short-distance ticket, rendering it vulnerable to the recent rises in air taxes in countries such as the United Kingdom. Ryanair therefore notes its access to the UK market would be reduced

Fuel price and currency movements.

The cost of jet fuel is highly unpredictable, representing about 45% of Ryanair’s bill. Moreover, Ryanair has a high proportion of costs but there are no revenues in US dollars which make it vulnerable to a dollar-to-pot and euro strengthening. Ryanair routinely controls its fuel price and monetary exposures in order to minimise these threats.

Brexit

Ryanair also formed a new carrier, Ryanair UK, to ensure the continuity of flights to the UK following Brexit. The new arm of the Ultra-Low-Cost air operator also obtained a Civil Aviation Authority (CAA) certificate of air travel from the UK to ensure that Ryanair is eligible to carry on operating flights within the UK and to destinations within the no deal and UK would leave EU.

Later on, Ryanair made it known that he had doubts as to whether there might be a ‘no deal Brexit’ for the airline sector. If United Kingdom enters the EU without an arrangement, they would steal be operating but extra chargers and customers would have difficulty due the passport situation.

Covid-19

Now Ryanair estimates its seating ability to be reduced by 80 percent in April and May and cannot preclude complete grounding of the aircraft. To order to reduce business expenses and boost cash flows, Ryanair is moving urgently. It will require suspending budget deficits, delaying both capex and liquidity buybacks, restricting recruiting and capital costs, and introducing a range of opportunities for voluntary leaving, immediate termination of contracts for jobs and massive cuts in working hours and wages. In this unprecedented and unforgettable case of Covid-19, we collaborate alongside our citizens and business groups from all over EU countries.

PESTEL analysis of Ryanair

Political environment

The United Kingdom government pays the highest commercial air transport taxes worldwide on both short- and long-distance UK-specific passengers. Price increases from £75 to £78 for long haul passengers and from £13 for short-haul from 2018 . This tax has more than tripled in the last 24 years, and will continue to rise. It may frighten visitors and trading partners preparing to visit Britain. This might also affect airlines, such as Ryanair, with short-haul travellers preferring buses and trains.

UK voted to leave the EU in June 2016, resulting in economic and political uncertainties. If there is some form of agreement by 2019 , Britain leaving the EU could disrupt UK flights. The luxury of UK airlines like Ryanair, operating many routes across EU countries, is constrained by growth and income generation. However, by applying for a British operating licence , Ryanair has prepared itself.

This may also contribute to the loss of ownership and market shares of Airlines such as Ryanair because 50% or capital shares of airlines must be EU owned to operate freely between EU countries. In the event that the UK is leaving the European Union, Ryanair shall have at least 20% of its shares listed as international. their stake unless it convinces pension funds to shift from holding shares in UK to EU.

Economic environment

The UK airline industry has been adversely affected by the weak pound and the economic instability since Brexit. The poor package has driven consumer spending down to a decline in leisure travel costs.

Social environment

But the gain continued to be low cost carriers such as Ryanair and Easy Flight. Given the rising cost of living, British citizens still want to fly abroad for holidays that mean that Ryanair, Easy Jet, and Norwegian low-cost flights are available.

Britain’s aging population also poses a threat to aviation. Claims millennials travel more often than the older generation when it comes to holiday travel. In 2016, five or more holidays at least 25 percent aged 16-24 and 27 percent aged 25-34 made them a significant airline population. Nevertheless, between 2017 and 2022 the population of the 20 to 34 people is expected to decrease by 1 percent, which could have an effect on aviation companies.

Domestic tourism could be enhanced by uncertainties such as the failure of Monarch airlines and the cancellation by Ryanair in 2017, because cautious clients opt for residence and thus impact their airline company.

Technological environment

The Internet changes the flight experience entirely, from biometrics to virtual reality. Many airlines have adapted to the skills of Alexa that WPP has created, which allow customers to know the films are on their flight with details on actors and ratings and travel advice. A biometric IFE Panasonic update has also been developed and enables secure payment permits on board and other facilities such as a customised programming catalogue. Both services have been incorporated into their airlines by.

Problems and solutions

The public relations policy of Ryanair will be strengthened. The research shows that the Ryanair is highly competitive on the market and can be related directly to the operator’s competitive cycle. It does, however, not only sustain the degree of customer service and does not achieve adequate efficiency. Through implementing many initiatives and steps, Ryanair Management will improve the efficiency of integrated marketing communications. The marketing plan would incorporate all the elements of marketing communication mix so that the company can deliver its target customer segment in an effective and efficient way.

The organisation will develop and change its system of web-based tests. This is because the buying of electronic tickets raises dramatically the tickets for officers. Management is recommended that it follow a viable approach to the development of its website and to use it to the full. The website includes creative functions and functionality. The website will provide the customers with detailed information. Therefore, the safe and secure electronic transaction system.

The management of Ryanair should introduce new programmes and initiatives that demonstrate its greener image. A new study notes that the government and non-governmental organisations are growing pressure on airlines and transportation firms to decrease their emissions due to the ecological harm done to the atmosphere by airlines. Taking account of the current Ryanair business plan, it may cause serious harm in future to Ryanair to ignore this issue of environmental damages. The management of Ryanair is focused on sustainability initiatives, and the procurement of new aircraft is part of that.

It is important to boost the brand image of Ryanair. The strategy of company by offering affordable prices, rising marketing share and income has influenced the reputation of the brand. The idea of cheapness creates a new understanding of service quality and consumers discourage bad service at low prices.

A big factor for the airline is the confusion with Brexit, because if Britain exits the EU it would be inevitable that Ryanair will be badly affected unless action is taken. Another issue that may impact the business’ profits is the extraordinarily high UK government taxes on a commercial flight.

Report

During the process of making this report there’s a lot research to be done whether online blog, article or a newspaper but each of these sources have a different opinion therefore collecting a lot of information and reading. Has helped me to understand Ryanair strategy they have always committed to their original plan which would-be low-cost airline. Because it’s a low-cost airline which it does not have the luxury airline, but it would have an average airline service.

Ryanair low-cost has attracted a lot of customer and it has generated quite a lot money because it covers majority of Europe and airports are like the second to best airports there are. Ryanair are the most consistent due the low-fare service has over 1 billion clients and over 2000 daily flights For example, London main airport is Heathrow, but Ryanair uses Stansted due its cheaper functioning. Ryanair has a great website function where you can check yourself and make it easier when you get to the airport and avoid all the queueing.

With the recent events of Brexit saga and Covid-19 both of these events have huge impact of the profit margin due fuel cost gone up and airport service. The Brexit meant a bad deal for Ryanair as UK is the biggest market for Ryanair but Ryanair and plenty of other airliners manage to reach agreed with EU over the Open Skies which means planes can land in the UK. Ryanair have added a clause even if its no deal they would cancel customers flights. Covid-19 has even bigger impact than Brexit as the company would 80% closed due the contagion’s virus and no majority of Europe airports are closed. If there is no customer operating that means Ryanair would need cut cost by terminating Cabin Crew, pilot and airport staff. Ryanair would not be generating any income but loses.

References

1. CAPA – Centre for Aviation. 2020. Ryanair SWOT Analysis – Michael O’leary’s Maniacal Focus On Being The Lowest Cost Producer. [online] Available at: [Accessed 14 April 2020].
2. Ft.com. 2020. Ryanair Chief Michael O’Leary Pledges To Drive Out Rivals. [online] Available at: [Accessed 14 April 2020].
3. Haque, F., 2020. PESTLE Analysis Of RYANAIR. [online] The Strategy Watch. Available at: [Accessed 14 April 2020].
4. Investor.ryanair.com. 2020. Ryanair | Brexit. [online] Available at: [Accessed 14 April 2020].
5. Ryanair.com. 2020. [online] Available at: [Accessed 14 April 2020].
6. Shaw, A., 2020. PESTLE Analysis Of Airline Industry | Marketing Tutor. [online] Marketing Tutor. Available at: [Accessed 14 April 2020].
7. the Guardian. 2020. Ryanair | Page 2 Of 42 | Business | The Guardian. [online] Available at: [Accessed 14 April 2020].
8. TravelDailyNews International. 2020. Ryanair Taking Urgent Action To Respond To COVID-19. [online] Available at: [Accessed 14 April 2020].
9. UKEssays.com. 2020. Suggest On The Strategic Issues For Ryanair. [online] Available at: [Accessed 14 April 2020].

Description of the Set of Standard Terms Applied by RyanAir Company

The set of standards and terms identified in this paper revolve around the booking contract of RyanAir, a UK-based Airline Company. The contract provides the standard terms under which RyanAir allows its customers to book its holiday services. When a customer books the company’s flight services, the terms indicate that a legal contract exists between RyanAir and the customer. When booking a holiday with the company, one is supposed to be over 18 years and a UK citizen.

The second term is that the company will provide security for the cash and monies paid by clients through its website. To make any changes to the holiday, the terms require that the customer should place the request in form of writing. Customers should notify the company when they want to cancel the holiday. The notification process is via letter, fax, or email. The terms also indicate that RyanAir has the right to change or cancel the flight or holiday when unexpected events occur.

The terms also address the issue of privacy and customer security (Mennen, 2010, p. 27). RyanAir Company is committed to protecting the security and privacy of its customers. The company safeguards all personal data collected from clients and processes the information by RyanAir’s Privacy Policy. The terms and standards also outline the way forward in the event of circumstances that are beyond the company’s control. The terms state that RyanAir will not be responsible and accountable for delays and mishaps caused by situations beyond the control of the company like terrorism attacks, weather changes, or labor disputes among others (Mennen, 2010, p. 29).

I had obtained these standard terms from the airline’s website “RyanAir.com” with the help of Google search. In perspective, the terms and standards indicated by the airline company, it is agreeable that they are subject and outlined under English Law.

Four Clauses from the Terms

We can highlight several clauses from these standard terms. The first one is the force majeure clause. A good example of a force majeure clause is the one stating that ‘the individuals booking with the company should be 18 years of age and UK citizens.’

The second clause is the complaints procedure clause. A complaints procedure identifiable in the standard terms is that ‘in case of unfair treatment, individuals should file a report through writing to have the issue addressed accordingly.’

The third is the cancelation clause. An example of a cancellation clause in the standard terms is the requirement that ‘the company is not liable for any events and situations that are beyond its control like floods and disasters.

We also have a fourth clause known as a prevailing law clause. A prevailing law clause occurs in the security provided to the company to ensure the data and information are private given to the company. The clause states that ‘RyanAir will provide necessary security to individuals and offer required privacy to the information obtained from the customers.’

The Purpose Served by the Identified in Booking Contract

The main standard terms under which RyanAir supplies holidays to its customers include the conditions of books, the privacy of customers and security of personal data, and events beyond the company’s control. These are set of standard terms put in place to have a healthy business between the customers and the company. The first term states that booking is the process of getting into a legal agreement with the company and any other party involved in the provision of holiday services (Mennen, 2010, p. 52). The person booking for the holiday services should be mature and a UK citizen. This is the first condition the customer should fulfill before establishing a contract with the company. This contract ensures that everything is by UK law regarding air travel.

The second term in the contract is customer security and privacy. The company is committed to ensuring that it has safeguarded the data of customers by its Privacy Policy. The company is keen to safeguard personal data, private information, and personal details collected from different. The data is also is processed as stated under RyanAir’s Privacy Policy. This term is important because it serves to ensure the customers’ information is secure and safe (Mennen, 2010, p. 65). This standard term is necessary because it assures the customers that their personal information is safely handled and not accessible to a third party.

If there is an event beyond control, the company has the right to cancel the holiday but be not liable for any inconveniences or delays caused. The importance of this term is to warn clients and be aware of events and calamities that are uncontrollable. It informs the customers that RyanAir cannot be held accountable or be in breach of its terms and conditions in holiday service delivery to the clients. These standard terms are important for businesses because they help to define the kind of relationship existing between the service provider and the esteemed customers.

Analysis of the Standard Terms under Unfair Terms in Consumer Contract Regulations 1999 of UK

The first standard term applied by RyanAir states that booking is the process of getting into a legal agreement with the company and any other party involved in the provision of holiday services. This is a written agreement and conforms to the Act because it presents the customers with fair terms. The term is also by other laws in the transportation sector whereby individuals entering a legal agreement with the company should be mature and citizens of the United Kingdom (Mennen, 2010, p. 61). However, this term can be unfair considering that it locks out non-citizens living in the country from accessing the holiday services offered by RyanAir Company. This means that, if analyzed carefully, it is notable that this standard term is subject to the Unfair Terms in Consumer Contract Regulations 1999 because it discriminates against potential consumers who are non-citizens.

The second standard term is on the occurrence of circumstances and events that might be beyond the control of the airline company. If we were to examine the term carefully, we will note that the company autonomously states that it reserves the right to alter, change, or cancel holidays when some uncontrollable events or situations take place (Lawson, 2011, p. 40). This standard term is therefore subject to the Unfair Terms in Consumer Contract Regulations 1999 because the airline company states that it can cancel holidays and flights in the event of breakdowns without being liable to the inconveniencies caused. We can apply the Act to explain the unfairness in the term because the company must ensure the airplanes are in condition and offer appropriate back-ups in the event of mechanical problems.

According to the Unfair Terms in Consumer Contract Regulations 1999, there are situations whereby the standards and terms adopted by different organizations might be discriminative or unfair to the customers or clients. According to this Act, unfair terms occur when the company does not consult with the clients and listen to the complaints presented by specific customers (Lawson, 2011, p. 48). The Unfair Terms in Consumer Contract Regulations 1999 is in place to ensure different companies offer fair terms to the customers. According to the Act, if a term or standard is unfair, then such a term should not be binding on the clients or consumers.

Responsibilities of Companies in Keeping Customer’s Information Safe

There are several methods proposed by companies to secure customers’ data from access by unauthorized personnel. Currently, financial institutions and other companies safeguard the information by using appropriate measures such as safes, backup systems, and secure databases to keep the information provided by customers. Authorized individual only accesses the records and files when required by the organization to do so (Lawson, 2011, p. 40).

The companies also ensure their websites are stable and secured by using passwords. Other security measures include putting files in safes and ensuring there are guards to protect unauthorized access. Since it might be hard for some companies to take the necessary measures to secure the customers’ information, there are laws put in place to ensure companies have safeguarded such data.

Companies must keep the information of the customers safe. Companies use the information provided by customers because it has value and helps in the success of the business. They use the information to learn and study the unique needs and expectations of the customers. As well, companies use customers’ information and data in the provision of services and products to more customers. This helps the companies to learn about the desires of respective customers, and conduct surveys to determine buying trends, prevalence, and responsiveness of clients (Lawson, 2011, p. 49).

Companies can use names, contacts, and addresses to communicate with customers. The details and personal information can be used for statistical purposes and monitoring of business operations. Laws require that the information of different customers used by business organizations should be secured against any access. Any unauthorized access will endanger the security of the customers and make them lose vital information. It is the responsibility of companies to make sure customers’ information and data are safe and protected from foreign access (Lawson, 2011, p. 74).

Explanation of how I Conducted by Research to Avoid Misconduct

In conducting my research, I visited RyanAir’s website to read about the standard terms provided by the company for its customers. After reading and understanding the terms, I used my gained knowledge to write the paper without copying the information with the website. I also used the knowledge and laws learned in the class and applied them in the research. By so doing, I was able to avoid any form of misconduct. As well, I relied on my research to write the report without copying or discussing it with the other students in our class. I came up with my research and study on the study topic. With secondary materials and analysis of different laws as applied in the United Kingdom, it was possible to conduct personalized research thus coming up with original work as presented in this paper.

Reference List

Lawson, R 2011., Exclusion Clauses and Unfair Contract Terms, Oxford University Press, London.

Mennen, M 2010., An Analysis of RyanAir’s Corporate Strategy, Longman, London.

Unfair Terms in Consumer Contract Regulations 1999. Web.

The advertisement selected for this evaluation is Ryanair’s ‘Hottest’ Back to School Fares, Jan 2008, advertisement. Ryanair is an airline operational chiefly in the UK and is regarded as an airline for the common owing to its economic fare rates. As they are interested in the mass audience as their customer their advertisements are targeted towards them thus including elements that stimulate the mass psyche. These advertisement campaigns have helped to make Ryanair one of the toughest competitors in the industry. The key to their success has been the association of the Ryanair brand with the common and upwardly mobile general market.

The dynamic portrait of an attractive young woman and the simple but catchy text gives an impression of realistic wisdom. The style of the posters is made such that the common people become familiar with Ryanair. The image is made in black and white and a commanding but simple slogan is added to them. The advertisement also radiates sex appeal, seductive and athletic style to modify the social behavior of the audience to some extent. Although we know that engaging with the audiences does not make them buy a product, but it makes the consumers aware of the popularity and products of the brand.

The advertisement conveys to the viewer about the low price or the price of bygone days the company is offering with a touch of lust and nostalgia of the schooldays. It is all visualization essence of elation rather than fun and frolic as in the case of the older advertisement. This advertisement is more about impact rather than the message. However, this specific issue could have been dealt with a certain truth in a much better manner if the truth had been evaluated and taken into consideration that the matter of money is about not only accumulation of money but also accumulation of power. However, as the audience of the company usually is categorized in the middle-income group the advertisement tends to provide the feeling of power in form of lust keeping in mind the affordability. Thus it could be ascertained that society and everything related to the society is evolved and metamorphosed by the manipulation of economy and globalization and hybridization is a no different issue in this context. True it is to the context but seen from a sociological point of perception.

Ryanair’s advertisement represents the normal middle class. The image has moved from the traditional mass distribution and marketing age into the present culture in terms of design and relation with consumers. Their advertisement is dynamic and alive presenting an expression of quality with low economic price to pay and classic uniqueness. This advertisement of the recent Ryanair campaign has become more youthful and adventurous, adding a lot of personality to Ryanair. As a result, it can be seen that the advertisement of the company is a success in conveying the selling points in a remarkable crisp manner. It stimulates the viewer’s mind and makes an impression instigating the economic affordability in the background.

Aims and Context of the study

Introduction

Ryanair is a low cost airline that operates in most parts of Europe and Morocco. Its head office is based at Dublin Airport in Ireland. Ryanair has in operation 254 Boeing 737-800 aircrafts in its 43 bases around Europe and Morocco (British Airways Annual Report, 2006, para. 1-3). It offers its customers the lowest air travel charges and has had successful growth in its operation since 1997 due to deregulation that occurred in the aviation industry.

As a result, Ryanair has gained recognition as the largest low cost carrier in Europe. In addition, it is the second largest in handling large numbers of travelers in Europe and also the largest airline in dealing with high numbers of international passengers. Ryanair invests heavily in ensuring modern aircrafts which are fuel efficient and friendly to the environment by reduction of air pollution.

At present, it is an industrial leader in environmental efficiency. Due to handling of large number of travelers, Ryanair airline has faced problems in ensuring customer satisfaction to its services. Many clients have complained of flight delays, long queues and even loss of their luggage. This research will attempt to focus on the factors that influence demand for Ryanair services with an aim of improving these factors so as to enhance passengers’ satisfaction.

Purpose and Scope of the Research

The general goal of this research will be to assess and design demand factors in order to promote Ryanair air transport services. This is meant to enable the industry to be able to increase its revenue ratio in comparison to its main competitors in the industries. Moreover, this impetus to promote Ryanair air travel services follows an evaluation of the travelers’ needs and an inclination to be able to device a marketing strategy that could aid in the promotion of Ryanair air services.

Even though Ryanair operates under the framework of initially assessing the market demand, and then goes ahead to devising innovative solutions in order to meet up with the market demands, this proposal looks out on ways in which the airline can increase the demand for its services. In this case, the researcher will propose a demand creation mechanism coupled with market assessment strategy.

Specific Objectives

1. To determine the needs of the current users of Ryanair air services.
2. To examine the factors that influence demand for air services by Ryanair.
3. To examine the consumers’ level of satisfaction regarding Ryanair air services.
4. To recommend an effective strategy for addressing the passengers’ needs

Research Contribution

Contribution to Knowledge

This research will be vital for those interested in understanding deeply the factors that affect consumer demand in any line of industry. Therefore, as a response to the overwhelming role played by Ryanair, especially with regard to its social responsibility, various economic theories regarding demand provide lucid explanations as to the role a number of factors play in influencing consumer demand.

Many industrial organizations seem to be constrained by the changing environment of demand (Matt, 2003, p. 45). The recommendations of this study will provide an important tool that can be applied by Ryanair and other airlines for improvement of their services.

Research Significance

By carrying out this research, the researcher will offer a critical perspective on the various demand factors and their overall contribution to the prevailing demands for Ryanair air travel services. This will be aimed at formulating effective strategies for improving its services in order to boost passenger satisfaction and hence loyalty (Philip, 2006, p. 34). In addition, by boosting its passenger numbers, a lot of jobs will be created and their profit margins will be increased.

Literature Review

Demand has been believed to co-exist with supply. This concept has been addressed across history starting with scholars like John Locke who came up with earlier definitions regarding this vital concept in terms of the relationship that exists between the demand and supply (Locke, 1691, p.75). Moreover, it was James Denham-Steuart who first used these two terms that is, demand and supply (Humphrey, 1992, p. 79).

Economists have largely concurred on the role of various variables on demand as well as consumption. However, for many economists, price was the main determinant in influencing demand having the principle of ceteris Paribas in place. However, in the current changing environment, price can never be the only factor that can influence demand.

Other factors play a significant role, such as the availability as well as price of substitute goods (Fao, n d, para. 5). This has been owed to the influence these factor has on the elasticity of demand. However, regarding the suitability of the goods or services under consideration, knowledge and availability plays crucial role.

Another factor that has been considered by many marketing professionals is the issue of tastes and preferences. Accordingly, people have been believed to shift in their tastes and preferences volatilely, and therefore, this should be taken into consideration when coming up with a marketing analysis. Moreover, according to Cherie, the volatility in the business environment is continuous, and it always affects demand, which consequently affects supply (Ang, 2007, para. 2-4).

Furthermore, Cherie argues that it is in looking at the various factors influencing demand that one will be able to manage the changes that take place in the environment (Ang, para. 3). In other words, demand must always be looked at in relation to the environmental volatility. Furthermore, the process of managing demand should be regulated by the policies of the company and its requirements (neoIT, 2007, p.3).

Research Design and Methodology

Methodology

The study will employ qualitative methodology to meet the objectives of the study. A qualitative study deals more with theoretical analysis of data, but does not pay more attention to the quantities of samples and data. In this case, the researcher will utilize the qualitative methodology because of the nature of demand theory which assumes that some factors have to be constant for the overall result to be obtained (Maloney, 2006, p.7).

For instance, in the case of price, the income and consumer tastes and preferences will have to be made constant in order to come up with an analysis of the impact of price on demand. The researcher will also utilize both primary and secondary methods of data collection. First, the primary methods will be based on information gathered from the passengers and various staff of the organization.

Furthermore, the main clients of Ryanair airlines will also be interviewed or sent questionnaires to which they will respond. Their responses will be collected and fully incorporated throughout the research process. Moreover, it will be observed that questionnaires are going to play a significant role in ensuring that those vital individuals, who could not be reached easily, are able to participate in the research endeavor (Schlesinger & Heskett 199, p. 23).

Therefore, major air travelers with Ryanair airlines as well as other randomly selected customers will be provided with questionnaires to which they will be expected to respond. Furthermore, to ensure that one obtains fore respondents, the postage of questionnaires will be postpaid.

Consequently, as a means of enhancing the final research outcome, the research will identify responses from many of Ryanair airlines employees in terms of their commitment to the organization, their level of satisfaction, and the manner in which they view the demand trend of their travel services.

This information will be useful in understanding the link that exists between client-employee satisfaction and service quality, and consequently between the service quality and the air travel demand. Nevertheless, in order to attain cohesiveness in the research, conclusions will be attained, and easy implementation of the research findings, managerial staff will be interviewed directly in a bid to foster cooperation as well as attain relevant information about the organization and its commitment to objectives.

This manner of data collection will be significant to the researcher since it will provide fundamental information and findings as well as vital results to be used in relation to the research findings (Joshi, 2005, p. 39). Furthermore, interviews will be selected in a manner that gives major clients an opportunity to give their perspectives as well.

Study design

An evaluative case study approach was settled at in this study. A case study method is used by researchers to learn about a complex situation based on the objectives and the hypothesis of the study. A researcher has an understanding of that particular instance and intends to provide comprehensive analysis and description of that situation basing it on one particular area.

Evaluative case studies are essential where broad and to some extent complex questions are to be answered. In this case, factors increasing demand for air services at Ryaanair airlines will be tackled. It also provides solutions for difficult circumstances during the research work. Basing on qualitative approaches, case studies allows for investigation of a real intervention by focusing on the reasons that caused a certain intervention to succeed or fail.

Data collection

The following data collection tools will be employed to meet the objectives of the research;

Questionnaires

The research questions to be used will be based on an in-depth evaluation of the research objectives and the targeted industry which is Ryanair airlines. Open ended questions will be used to give a chance for respondents who will be the clients and the employees of the Ryanair airline industry to give personal opinions about factors influencing demand in the airline industry. Random sampling method will be greatly employed owing to its effectiveness in eliminating bias and that it offers a better representation of the population. In this effect, the questionnaires sent to employees of the industry and management staff will be distributed to them randomly.

Semi-structured interviews

This will provide a chance for direct interaction between the respondent and the researcher. As a result the answers provided by the major customers and managerial staff of Ryanair will be assessed to determine the truth and also clarifications will be sought in case the response was not clear enough.

This type of interview enable the researcher to be flexible in asking questions as the researcher could tackle the issues as they arise. According to Joshi (2005, p.50), semi –structured interviews are able to go further to find the meaning of answers provided by the participants.

Secondary data

To further supplement these questionnaires, the researcher will utilize other online journals, books, written articles and magazines on the airline industry and especially Ryanair in the process of collecting data (Rigas, 2001, p. 56). The choice of this method will be based on the fact that through it the researcher will be able to link theoretical perspectives with research purposes, and that the data to be collected will elicit the findings of the analysis (Greengard, 1999, 8).

Sample size and the sampling strategies

Purposive sampling strategy will be employed in identifying the sample population that will be used in the research process. In the final synthesis as well as data collection sampling, the researcher will divide sample population into different subgroups to simplify the sampling process.

Random sampling will be made use of tremendously, because of its effectiveness and efficiency, in addition to its superiority in obtaining sample from population (Preston, 2008, p. 64). However, in some cases, random sampling might not be possible; therefore, the researcher intends to use quota sampling strategy. Furthermore, due to the significance of this research, the research intends to adopt stratified sampling technique, though in rare occasions, so that enough samples are used and classified in vital variables.

Moreover, the main reason for the adoption of stratified sampling will be aimed at ensuring that sub-groups are included in the sample, without being omitted based on the assumption of concept of representation. As a result, the researcher will be able to foster the representativeness of samples no matter the quantity of the sample, thus obtaining better estimates of the overall population.

Data analysis and presentation

Raw data will be coded and then analyzed using descriptive statistical measures such as ratios and percentages. The result will then be presented in form of text, tables, graphs and pie charts.

Research limitations

• In order to carry out a comprehensive study, much time is needed for data collection in the field (Sieber, 1973, p.1340). Limited time is available for the research process.
• The issue of finding a suitable respondent in the sample will be quite challenging as many employees will be engaged in their day to day work and the passengers on hurry to catch their flights. However, through coercion the sample size will be attained and the data collected.
• The resources available in terms of finances will be limited for a comprehensive research undertaking. However, the researcher will obtain some grants from sponsors.

Budget

The researcher in the due course of the research has estimated the following costs:

References

Ang, C. (2007) Determinants of Demand. Web.

British Airways Annual Report (2008) Ryanair: Europe’s Greenest Airline. Ryanair. Web.

Fao (n d) Determinants of Demand and Consumption, Fao Corporate Document Repository. Web.

Greengard, S. (1999) Putting HR software to work: human resources management. Workforce, 78 (9), 4-8.

Humphrey, T. (1992) Marshallian Cross Diagrams and Their Uses before Alfred Marshall. Economic Review, 23 (4), 3-23.

Joshi, M. (2005) The Business of Marketing at International Levels. Oxford, UK, Oxford University Press.

Locke, J. (1691) Some Considerations on the consequences of the Lowering of Interest and the Raising of the Value of Money. Web.

Maloney, C. (20060 Winning Loyalty and Trust: Business’ Best Tools, Practices and Business Techniques. The AMA Events and Workshop.

Matt, H. (2003) Brand Royalty: How the World’s Top 100 Brands Thrive and Survive. Charlotte, NC, Information Age Publishing.

Michalos, A. (1995) A pragmatic approach to business ethics. Thousand Oaks, CA: Sage Publications.

neoIT (2007). Increasing Demand for Demand Management, Global Services Insights, Research Report, 5 (9), 1-23.

Philip, K. (2006) Marketing Strategic Management. 11^th edn. The International Edition.

Preston, L. (1986) Business and public policy. Journal of Management, 12 (3), 261–275.

Rigas, D. (2001) The Business of Airline, The Twenty First Century. England. New York. Routledge.

Schlesinger, L. and Heskett, R. (1991) Ending the Trend of Failure in the Service Industry. The Management of Sloon. Review Procedures, 8 (2), 18-29.

Executive Summary

Ryanair gives us a good overview of strategic management practices that improve the status of an organization and makes a company get more profits. From the statistics of Ryanair collected over time, one is able to see the competitive moves and business approaches that the management has taken.

These systematic steps have led the company to success (Barrett 90). It took the company a lot of time to start growing. It accrued loses within the first five years after its establishment in 1985 amounting to IRE£20m. On changing the management team the company rose to the top of Europe’s airlines in the early 90’s.

O’Higgins (2007) says that in 1997, Ryanair first sold its shares through the Dublin Stock exchange and afterwards with NASDAQ in the year 2002 (O’Higgins 687). It not only rose in Europe but also by the year 2006, it was leading the world’s airlines as the most profitable company.

In the same year, Ryanair announced its profit to be £329m for the first half of the fiscal year 2007. Its profits rose by 1% to 26% in that half year (O’Higgins 687).

This essay focuses on some aspects of strategic management that the leadership of Ryanair used to come to the top in terms of profitability. These are: managing strategic change, strategic management on human resource and cost.

Ryanair

Michael O’Leary has done a lot to propel Ryanair to the top in terms of profitability. This is because of how he has been strategic in his leadership, since he took over this role in this company (Barrett 90). After his promotion to be the chief executive of Ryanair, he had a very clear vision; to model the Ireland’s Ryanair after the novel Southwest Airline Business Model.

He had the objective of making it to come to the top rank among all Europeans Airlines in terms of profitability. O’Leary did not take a very long time before he steered the short haul airline to the top. From the early 2000, the airline has topped not only in Europe but also globally.

“Ryanair took delivery of the largest number of new aircraft in 2009, with 54 B737-800 deliveries – or an average of 4.5 per month” (“Ryanair tops 2009 aircraft deliveries” par 1). This report shows exactly how O’Leary’s is effective and how the company is doing.

In this discussion we focus on four aspects of strategic management; managing strategic change, strategic approach on managing human resource, strategy on cost, and finally, an over view of how Ryanair compares with British Airways. These four aspects fall under the whole domain of strategic management.

The company focuses on the scope and the direction in which it will carryout its activities over a long period of time. This enables the organization to make use of the changes in the environment, principally viewing them as opportunities.

The organization or the company configures its potentials and resources to achieve this goal (Hitt, Duane and Hoskisson 3). Studying the above-mentioned four concepts will validate the fact that Ryanair has benefited from the initiative its management took in those areas of strategic management.

Managing Strategic Change

Change is usually a challenge. It comes because of many factors. Managers should always be on the lookout because the change may bring a negative growth to the company if not well managed (Grugulis and Adrian 33). Both positive and negative changes may cause a negative growth if they are not monitored.

The first approach that the company used to manage change was by planning. Planned or regulatory ways looks at organizational change as a procedure that progress from a certain “type of state” to another by a sequence of carefully planed stages (Hill, and Gareth 53).

This is when, amongst all other things, when Michael O’Leary the Chief Executive Officer was went to America to gain knowledge of the business model of the then best performing Airline Company, Southwest Airlines. It was the most profitable airline company in the USA.

This led to the Ryanair’s model that is still fuctional to date. This was a clear application of planned changes. This was at the initial transformation of the company.

The former traditional model had made the company incur loses very fast. Eventually the low-cost airline model has elevated the company to the top, amongst all the airline companies in the world (Barrett 97).

Ryanair’s management also mixed their style of managing strategic change with the emergent approaches. This approach does not depend on exact plans put down. It studies the upcoming issues and devices means to manage such changes (Hill, and Gareth 120).

Some of the issues that arose and the company showed a good manner of managing change were the rising cost of fuel, managing the increasing number of passengers, using ancillary resource, and maintaining fleet commonality (O’Higgins 687).

As other companies surcharge their customers because of the rising prices of fuel, Ryanair maintained their prices low. Contrary to many companies that had increased their prices because of the rising fuel cost in the year 2005, and even higher in the year 2006, Michael O’Leary declared that they would not levy their customers more at any time, not even in the far future.

Customers welcomed this assurance. This is because the statistics show that the company further increased its revenue during this period. Many of the companies of the long – haul routes surcharged their customers (O’Higgins 688).

In addition to that, these levies were not proportional to the overall fare. Ryanair in this case handled this change with care making sure that it would not lose its customers.

Due to its low travel cost, Ryanair had an increase of its customers. To cope with this growth change, the company bought new aircrafts (Barrett 92).

This was between September 2006 and April 20007 when they acquired 30 aircrafts. This also ensured that the increasing customer would not come, miss the service, and later tarnish the reputation of the company.

However, the company needed to compensate the rising fuel cost in order to increase its profit margin. Ryanair therefore focused on ancillary revenue. This revenue rose by 36% in 2006, far much more than the passenger revenue (O’Higgins 692).

The company calculated it to be at £7.70 per person (O’Higgins 692). The ancillary revenue comes from the schedules that do not involve flight. These are rail and bus ground services, hotels, charges on excess baggage, car rental services, and flight charge fees, in flight sales, personal loans and commission from Ryanair credit card.

This initiative also started the in-flight mobile phone service and online gambling. This did not receive a positive reaction from a majority of the customers. Michael O’Leary kept the company’s stand on the fact that they would not stop doing the business.

The kind of the business had made some passengers uncomfortable because of the perceived noisy environment (O’Higgins 691). The management refused to adhere to the customer’s complaint because of the relatively low prices. This was an act of balance.

It had to be there in order to maintain the company’s profits as well as provide affordable service to the same customers. They did this to respond to the rising costs of fuel (Warren 146). The company therefore gained much more than many companies.

Ryanair maintained the fleet commonality by using Boeing 737 planes. The company has replaced the old aircrafts with new efficient and environmental friendly planes. The policy is in place to keep the employee training and the maintenance of aircraft very low. This and the above-discussed points have shown how Ryanair has managed change strategically.

Another evident aspect in this company in managing strategic change is the use of learning organizations (Sange, 270). They understand that by continuously learning and seeking knowledge, they will be able to deal with most of the emerging issues. In this Ryanair has a consistent program for training and retaining its workers (O’Higgins 699).

How Ryanair used Strategic Approach in Managing Human Resource

Managing resources strategically in general entail studying the resources that are at the company’s or the organization’s disposal. This is with the aim of exploring their role and their contribution in order to comprehend how they can yield high profits (Barrett 87).

In Ryanair’s analysis, they found out that in order to increase the productivity of the human resource, they would increase their number in order to reduce the workload of the then present workers. This would highly increase their profitability. In the year 2006 the company’s employee count increased by 700.

The number rose to 3500 (O’Higgins 689). This gave the workers who have been there relieve. It improved their working conditions. This is majorly by reducing their working hours. This eventually increased their efficiency and so maximizing their profitability.

The management of Ryanair must have performed a resource audit before arriving at the decision of training and retraining their workers. Such an audit aims at assessing the amount of the resources existing, the quality of such resources and the uniqueness as compared to what other organizations would have (Grugulis and Adrian 125).

On this fact, the company focused on the quality of service their workers offered. It is at this point that they decided to establish a culture of training and retraining them. In that view, they embraced the value of learning organizations.

Learning organizations give people educational opportunities while on job (Sange 270). This will always be a fulfillment to the employee because it is a direct form of developing his or her career further.

The educational opportunities will profit the company directly too. This is because the skill gained by the staff or the employee will improve the productivity of the company.

In view of resource base view (RBV), a certain resource should pass five market tests so that the company would embrace it. In their appraisal, Ryanair made sure that its Human Resource meets these standards (Warren 148). In order to pose competitive advantage to their rivals they decided to pay their workers higher than the other airline companies did.

From the claim that they had an average pay of £49, 692 in 2006, insinuates that they are paying higher than any European airline (O’Higgins 690). This still implies that that Ryanair pays its employees well. This is another fact that improves on the working conditions of the staff. Motivation is the principle issue in this.

This strategy had the quality of inimitability within it. High pay is usually one the hardest things companies get involved in when they are remunerating their workers. Their initiative to maintain this proved that it was a durable value on this resource.

On the aspect of quality, Ryanair still went a step ahead to improve the working conditions of workers; the company complied with the regulation, which enforces a ceiling on pilot flying hours to an average of 18 hours per week. This will help the workers to work with renewed strength making them to be more efficient (Warren 194).

This is because of reduced fatigue. At times, it goes to dangerous levels. Keeping the health of workers in an organization is sustaining its productivity.

In focusing on competence, the ability of an organization to perform in certain areas of business, Ryanair also implemented the above strategy in order to improve the knowledge, attitude and potentials of the workers. The aim was to achieve the general competence of the firm.

The company has however been criticized for mishandling workers at some point. The focus has been more on the pilots. The company has not allowed them to join unions in order to express themselves freely (O’Higgins 715).

The company allegedly subjects its workers to stringent working conditions. An example of such an allegation is that the workers are not allowed to charge their mobile phones in the company premises to save on power cost.

The Ryanair had an appeal to the Supreme Irish court over a ruling that its pilots should collectively bargain through Irish Airline Pilot Association. The court ruling was in the favor of Ryanair. The company thereafter launched a claim for it s legal expenses.

Furthermore, in 2006 the Irish High Court found the company to have bullied pilots to accept a harassing contract. The contract was that they should pay £15 000 for retraining. This is on new aircraft if the pilot had left the airline.

The same would also apply if the very situation forced the company to negotiate with unions in the next five years. Some senior officials of the company were judged in court to have given false evidence (O’Higgins 702). This was as concerns the above-mentioned case. The company has had this wrong side while handling its human resource.

From the previous statistics about the remuneration, Ryanair is said to be the one paying higher than all other companies. It means that they pay their workers highly.

The company declared that their pilots are the best paid among all the short-haul pilots in Europe. They should therefore balance these with a more human relationship with its workers. This would cure their image and further sell their brand name.

Strategy on cost

The Ryanair Company also analyzed the way they would maintain their prices. In this, they looked at the value of ancillary revenue sources. This answered the question about value. It is the first question managers should be asking themselves when they want to capitalize on a certain resource (Grugulis and Adrian 225).

In the list of the four questions VRIO framework, the company found that the ancillary revenue would be very handy in substituting on imposing an extra levy on the customers. This was a unique way of balancing costs to bring them down to increase the profit margin. Some of the recurrent costs are not always predictable (Warren 255).

The main one that has it prices badly fluctuating is fuel. The company decided that the challenge will not cause them to increase charges on travel costs. To manage this, the company has refocused its energy on the value of ancillary revenue sources as earlier seen.

The second aspect of VRIO, which is the resource rareness, is evident (Hill and Gareth 402). Focus on ancillary revenue is a common thing in most airline companies. It is usually there but it is not the major focus. Focusing on it made Ryanair to look for more aggressive means of capitalizing on this resource (Warren 105).

To some point, some customers said that it caused discomfort on plane. The reason was that the place becomes very noisy. They forgot one thing, that they are paying low fares for their flight.

This is the reason, Michael, the CEO, stuck to the fact that this will go on (O’Higgins 679). Other high fare airlines do not have such aggressive types of ancillary strategy.

On the point of value, they also cited value in flight commonality. This company has dwelled on this policy. This policy adds value to the company by reducing the cost of having diverse types of flights. By using the Boeing 737, the company is able to save on the cost of training staff and the cost of aircraft maintenance.

This was by doing away with the small and less environment friendly planes. These aircrafts were also older which meant a higher maintenance cost than new ones. The cost would reduce by a big margin because the fuel consumption alone would reduce by about 47%.

“Then newer aircraft produced 50 per cent less emissions and 45 per cent less fuel burn… Also, a winglet modification program on the fleet was providing better aircraft performance and a 2 per cent reduction in fleet fuel consumption, a saving which the company believe could be improved over the next year” (O’Higgins 699).

This has benefited the company by efficiently saving on cost, therefore increasing the profitability margin. All focus is still on value.

Employing more workers also improved on the efficiency of the current workers. Increasing their number seems to be increasing on the cost of wedges, but the firm had seen it right that more work would be finished and the result will be more profits.

On this O’Higgins (2007) says, “Also, by tailoring rosters, the carrier maximized productivity and time off for crew members, complying with the EU regulations which impose a ceiling on pilot flying hours to prevent dangerous fatigue.

The airline adhered to the general rule of a maximum of 900 flying time per year, averaging 18 hours per week (O’Higgins 699). This positive aspect increases the value of workers, consequently improving on the quality of the work they offer to the company.

The last aspect (VRIO) comes out clearly on the point they introduced more measures to manage cost. This how an organization takes advantage on the potential of certain resources to increase profitability (Warren, 89).

The measures were luggage handling and passenger check-in techniques that were designed to reduce the cost and enhance productivity. The first was to introduce a web-based passenger check-in that saves time. The company was able to take advantage of these funds generating resource to gain competitive advantage over other companies (Hitt, Ireland and Hoskisson 154).

This also saved the cost on using airport facility for check-in services. The other cost minimized was of the check-in staff. The second was luggage handling (O’Higgins 688). They introduced charges on the check-in bags.

This encouraged the customer to travel with few or at some cases without the check – in bags. This saved on cost of handling the luggage and increased speed. This had an overall improvement on the efficiency of organizing the travels throughout.

They decided to focus on the airline budget model. They therefore maintained point-to-point routes only. “Ryanair reduced airport charges by avoiding congested main airports, choosing secondary and regional airport destinations, anxious to increase passenger throughput” (O’Higgins, pp 699).

This was in the time the handling and airport charges raised by 21per cent. This was slower relative to the growth of passengers giving a net reduction on costs from transactions at new bases and airports. This defied the increased costs at some bases like Stansted (O’Higgins 700).

Generally airport charges had increased in the year 2006 prompting the company to use alternative routes. Aircraft numbers increased in that year on the existing routes therefore congestion was evident.

Congestion would make the Ryanair waste time and so losing income at any particular time. That is why they decided to use alternative routes. This saved on the operational costs.

British Airways Compete with Ryanair

As all the fuel companies were devising ways to maintain or reduce cost during the fuel price rise, British Airways as well increased its fare charges. They did this to hit back on the strategy Ryanair had (O’Higgins 689).

Ryanair did not surcharge the customers for the same reason. Contrary to their thought that Ryanair would have its revenue reduced, it went up higher for the low prices attracted the customers.

British Airways had monopoly over some main airbases. From this, they collect much revenue. Increasing airport charges was a strategy to get off those companies that would not sustain the charges comfortably. Their alternative was to look for alternative routes.

Such routes that would not favor the passengers especially those are far away from the city center. That is why, “Ryan air continued to protest at charges and charges and conditions at some airports, especially the Stansted and Dublin, two of its main Hubs (O’Higgins, pp 699).

In addition, O’Higgins says, “It vehemently opposed the British Airport Authority (BAA) airport monopoly plans to build a £4bn gold plated Taj Mahal at Stansted, which we believe, could be built for £1bn” (O’Higgins, pp 699).

British Airways also has tried to reduce operational cost in several ways. It has withdrawn some refreshments formerly given to the customers. This has so far discouraged some customers showing that it is not that successful in using this measure.

In its struggle to increase, its revenue the firm is also introducing charges for travelers who would book seats beyond 24 hours before the travel dates (Smith, par 3). This will make the customers struggle for seats always as travel dates draw closer. This will also make the customers look for alternatives.

This is contrary to the Ryanair’s strategy of turning on ancillary revenue. The ancillary revenue does not hit on the customer directly. This is because some of the services give the customer the choice not to use or to use the service available. Customers then will continue to prefer such a company to the British Airways.

Conclusion

Ryanair’s strategic plans were very successful since Michael O’Leary took over in the early 1990’s. Though he has received sharp criticism from rivals, O’Leary has kept standing strong to keep implementing the ideas he had. That is why he steered the short-haul firm to great success in the last few years.

Ryanair has hitherto kept growing as Michael O’Leary leads it. “Never the less, Ryanair is growing at the expense of its competitors. The airline reported a 17% increase in passenger numbers for September 2009. The airline said it carried 6.12 million passengers in that month, up from 5.12 million the same time last year” (Smith, par 6).

Works Cited

Barrett, Sean D. International Journal of Transport Management 2.2 (2004): 89-98. Print.

Grugulis, Irena, and Adrian Wilkinson. “Managing Culture at British Airways: Hype, Hope and Reality.” Long Range Planning 35.2 (2002): 179-234. Print.

Hill, Charles, and Gareth Jones. Strategic Management Theory: An Integrated Approach. Cengage Learning, 2009. Print.

Hill, Charles W. L, and Gareth R. Jones. Strategic Management: An Integrated Approach. Cengage Learning, 2007. Print.

Hitt, A. Michael, Ireland R. Duane and Hoskisson, E. Robert. Strategic Management: Competitiveness and Globalization : Concepts & Cases. Cengage Learning, 2008. Print.

O’Higgins, Eleanor. Ryanair – Low-Fares Airline. University College Dublin, 2007. Print.

“Ryanair Tops 2009 Aircraft Deliveries, with 54 New B737s, EasyJet Second, China Southern Third.” Centre for Asia Specific Aviation. 31 Dec. 2009. Web.

Senge, Peter M. The Fifth Discipline: the Art and Practice of the Learning Organization. Doubleday/Currency, 2006. Print.

Smith, Shaun. “Ryanair-a branded customer experience?” Weblog post. Smith+co Homepage. Shaunsmith+co Ltd, 28 Apr. 2009. Web.

Warren, Kim. Strategic Management Dynamics. John Wiley and Sons, 2008. Print.

Poland

Economic Factors

Competition

The international monetary fund recognizes Poland to have one of the leading economies in Europe. The polish air transport sector remains a global leader amidst strong competition from the key competitor North America.

With the realignment of economic powers to favor the East, there is a prediction that the polish aircraft maintenance services will have a larger market. However, this realignment might bring in new competitors to the polish aircraft maintenance industry from the Eastern countries which are growing such as Brazil and India.

Inflation

While many countries in Europe got affected by the economic crisis of 2009, Poland economy stood strong in the face of the inflation. Being at the center of the European continent, the country has been able to enjoy economic advantage over other western European countries.

At one hand, Poland hand aircraft maintenance industry gets the opportunity of having a market from the rest of the European countries due to the geographical location while, on the other hand, the industry is able to get skilled labor from these neighboring countries. This has led to the balance of supply and demand in the aircraft maintenance industry leading to the growth of the sector.

Social Factors

Infrastructure

In the midst of vast competition, the success of the transport sector in Poland has relied on the infrastructure system of the country. The country infrastructure system has been poor, but this is radically changing as the country prepares for the 2012 soccer Euro championship.

The country transport sector has received massive funding from the European Union in the effort to renovate the infrastructure. This will lead to the growth of the aircraft maintenance sector.

Cost of Living

The countries average income is much lower compared to other western European countries. This has directly led to lower cost of goods and services in Poland as compared to other European countries. Subsequently, many companies are outsourcing aircraft maintenance services from Poland because the prices are cheaper.

Political Factors

Politically, the country experiences a high level of stability. The republic of Poland has separate autonomy of power between the legislature, the executive and the judiciary. While the country has a presidential system of government, the legislative arm and the judiciary are independent.

In 1997, Poland adopted a new constitution that has guaranteed the freedom in economic transactions for outsourcing companies. The laws governing the aviation industry include the air law Act of 3^rd May 2003 and the law by the infrastructure ministry of Poland of 6^th may 2006.

Technological Factors

R$D activity is characteristic of the aviation industry in Poland demonstrating the role that human beings are playing in promoting innovations. Further, the country has many institutions of engineering that have been key in promoting technological advancement in the country.

Suitable outsourcing partner

AirTech Solution ltd became the ideal outsourcing partner for Ryan Air in Poland. The company has two certificates in Aircraft Maintenance that distinguish it from other air craft maintenance companies.

It possesses the certificate No PL 145056 of membership in the European Union Civil Aviation that approves its services in maintenance. Its second certificate No, PL05.ARD.2011 certifies its compliances to Poland civil aviation department through the strict compliance to the air law Act that came into force Poland in May and compliance to the laws that regulate the infrastructure industry in Poland as from May 2006.

The company offers five key services in aircraft maintenance namely; services in repairing aircraft defects, the supply of spare parts for the aircrafts, line maintenance in accordance to individual aircrafts, creation of line maintenance in all the European airports and solutions for logistics in the cases of AOG. These services target Aircrafts; ATR42-300, B737-300/400/500, B757-200/300, A318/319/320/321 and B737-600/700/800.

Venezuela

Venezuela faces many challenges that make it an ideal country for Ryan Air to outsource the Aircraft maintenance services.

Political Factors

The country political stability was unstable for a long time. In 1989, the country witnessed clashes that led to the death of over 200 people. Subsequently a few years later the country witnessed coup attempts to overthrow the government. The legal system of the country disfavors the freedom to conduct economic activity. Since 1998, the country has been on the track in nationalization of key sectors of the economy.

Companies dealing with steel and cement, oil and, tourism were nationalized. In the fear of subsequent nationalization of the air sector in the country, many investors have feared investing in the sector.

The local judicial system has barred economic activity in the country to the extent that countries, which have been, affected by nationalization have sought justice from the international systems of justice. The government has gone further to block international systems of justice in the commercial activities of the country by withdrawing its commitment to the international courts.

Economic Factors

The economy of Venezuela heavily relies on its oil sector. This has made it extremely vulnerable to international oil prices. In 200-10, the economy was affected by the decrease in the oil prices and subsequently the cost of living drastically went up. The prices of goods and services rose in response to the economy. However, in 2010, the government was able to reverse the economic meltdown through the increase in its expenditure.

A country’s foreign exchange policy affects the investment and outsourcing decision either positively or negatively. Countries with favorable foreign exchange policies attract outsourcing industries while unfavorable foreign exchange policies discourage the outsourcing companies. In Venezuela, the foreign exchange system is restrictive and discourages outsourcing companies.

The system is controlled by the National Exchange Control Administration which acts as the authorizing body in terms of foreign exchange. Further, the system gets restrained by the Central Bank which must approve any foreign exchange allowed by the Administration body. The government acts as the controlling body for all economic activity barring investment and business transactions.

Social Factors

The population of Venezuela is dominated by the poor and the very poor forming almost a quarter of the overall population. The population is rapidly growing with an annual growth rate of 1.6%. The transport sector is very poor and has discouraged the growth in the air sector. However, the growth in the tourism sector has been key to enhancing the transport sector in Venezuela.

With key tourist sites such as Angel Falls and Isla de Margarita, the air transport sector future is promising. With around 25, different ethnicity, decision making was slow and conflict was rampant with the most recent coup attempt being in 2002.

Despite the unfavorable conditions in Venezuela, the company recommended Areocentric de Servicios CA as a company of choice to outsource the aircraft maintenance services from Venezuela.

Turkey

Political factors

The country has been experiencing a period of political stability just as the rest of its European neighbors. This has favored growth and investment. The political system favors liberalization of market opening the ground to outsource services. The political environment favors the growth of the aviation industry.

Economic factors

Economically, the Turkish economy remains among the strongest in Europe, and the air travel sector has been essential in facilitating the growth Turkey’s economy. First among the advantages that turkey has in the air travel industry is the strategic positioning of the country in relation to geographic position of neighboring countries.

Just like its counterpart in Europe Poland, Turkey air industry enjoys a strategic, central position in Europe with the travelling time to 50 neighboring countries being at 3hrs.

Consequently, the country has been able to access a vast market not only from Western Europe but also from Eastern Europe, Germany Middle East and Asia. The major advantage of the vast market to the Turkish air travel sector is its ability to access different currencies that enable in balancing its economy to resist inflation.

Social factors

Though the country has a high population of over 75 Million, it enjoys a vast geography of around 780000 km. The large population has worked as an asset to the country’s air travel sector by providing a larger market for its services.

Unlike Poland whose, average income for its population is low Turkey population has been experiencing drastic increase in income that is encouraging the growth in air travel industry as people have more to spend.

Technological

Turkey technological growth has been on the rise in the recent past. The economic growth in the country has responded by improving the technology. There is a wide range of experts in civil aviation to fulfill the market demand in the air travel industry.

The air travel business is composed of a variety of competitors that have been forced to seek technological advancement and innovation in order to maintain a competitive edge over the rivals in the industry.

Suitable outsourcing partner

The Turkish Airline becomes the company of choice in terms of outsourcing from Turkey. It has been able to achieve a steady economic income in the midst of change and inflation. In the nine months ending September 2009, only one airline, Ryan air, remained ahead of Turkey airline with a 10% margin.

Nine months ending September 2009 performance comparison:

Source: Turkish Airlines

The company is the leading airline in Turkey, and has been able to enjoy a diversified income than most other airline shielding it from inflation.

Income versus Expenditure

Source: Turkish Airlines

Conclusions

A look at the three choices for Ryan Air outsourcing reveals that every country has its uniqueness to favor outsourcing. In the midst of economic uncertainty, Turkey advancement and strategic location make it more ideal as the country of choice. This is combined by the fact that Turkey Airline is the closest competitor of Ryan Air.

Working hard in hard in order to outsource the aircraft maintenance services from Turkey airline can enable the two companies to work in benefiting one another. The economy of Poland remains a leader in the European market Venezuela, acts as a tourist attraction site and this has enhanced growth in its air travel sector.

In making the final decision on which country to outsource from, the company must consider the country specific, the industrial specific and company specific factors discussed in the paper.

The purpose of this essay is to select a company to analyze the roles and responsibilities of managers and leaders to develop a strong organizational culture, the difference between management and leadership, the four functions of management, and the recommendation of two major strategies. However, this report selected Ryanair Holding Plc to discuss the factors mentioned above with real evidence. The rationale behind choosing this company is it experienced serious leadership and management problems in the 1990s.

The Roles and Responsibilities of Leaders

The company’s success depends on the efforts and capabilities of the leaders; thus, they have some special responsibilities, such as making a decision for the development of the company, motivating the employees to give the best performance to provide quality service, and ensuring equal opportunity for all employees. However, the top management team, including the CEO of Ryanair, are responsible for making key decisions to sustain the global market leader in short-haul routes; for example, the CEO has fixed the price range from €0.99 to €199.99, introduce a one-way pricing strategy, control the operating expenses, and take other initiatives to improve the position from previous years.

According to the Annual Report 2010 of Ryanair, the leaders and managers ensure equal opportunities for all employees to build a healthy organization and they provide other facilities in accordance with the requirement of the EU regulation; therefore, they recruit dynamic and educated people for particular posts and never considers social background, ethnic groups, and religious belief of the candidates.

Also, the leaders have to develop the stakeholders’ confidence towards the company; however, they spend a large amount of money on maintaining corporate social responsibility and ethical codes. For instance, in 2008 and 2009, it invested €18,062,000 and €18,081,000 on social welfare. On the other hand, they have to save the company from an adverse economic position like Ryanair’s financial position was not stable in 2004. It faced the challenge of the global economic crisis in the fiscal year 2008-2009. Still, in every situation, this company successfully recovered its leading position by implementing a top management strategy.

Differences Between Management and Leadership

Kotter (1990, p.17) differentiated management that has aligned to cope with complexities pointing to the details, regulate with consistency and aimed to bring results in a short time by eliminating risks and ensuring effectiveness at the bottom-line while leadership concerned with organizational changes through innovation focusing on long term vision and capabilities to lead people in the right direction. In modern corporate practice, the term ‘management’ and ‘leadership’ are two different attributes. In contrast, an individual positioned in the management may not be a leader, and an individual positioned in the leadership- may not necessarily be a part of management. Both management and leadership are essential to establish a successful business entry with a strong customer base and accelerated market share.

Bennis (2003, p. 43) pointed out that a manager administers the organization while the leadership innovates a new strategy or new product or services. Still, the management engaged in maintaining, the leadership is devoted to developing something new to jump the organization in an upper tier. For any ill circumstance or organizational crisis, the management accepts reality. Still, the leadership drives to investigate the situation and analyze the facts and findings to come to the right solution (Coutts, 2000, p. 1). The management always relies upon control, focusing on the system and structure of the organization.

At the same time, leadership is always people faced and drives to inspire their trust in the organizational system and culture. Recognizing the status quo, the management may argue with short-term views keeping his eyes to the baseline. Still, the leadership looks for long-term perspectives keeping his eyes to the horizon. While the management imitates any plan, the leadership jumps to originate them with full effort and eager to encounter any challenge.

Montgomery (2008, p. 3) at Harvard Business Review presented a different view arguing that the leadership enduring with the responsibility of the prime strategist and may not isolate from the management. Thus the corporations hire CEOs with high spending while the board of management allows CEO to refashion the features of the strategy.

Pointing to the case of Ryanair in 1994, the management was really afraid while the Irish airline came into the Dublin–London route with fifty percent lower than Ryanair, Michael O’Leary the CEO, presented his ‘low-cost business model’ to encounter the situation and his leadership turned Ryanair as the leader of low-cost airlines industry with remarkable profitability.

The Roles That Organizational Managers and Leaders Play

Table 4: The roles that organizational managers and leaders play in Ryanair.

Contribution of Four Functions of Management to Maintain Ryanair

Planning

Effective strategic and operational planning is one of the most important functions for the company; otherwise, the company can fail to achieve its goals. For example, from the last quarter of 1990, Ryanair had flown through a lot of turbulence with losses of more than IR£20 million despite enlargement in passenger volumes. In this context, Michael O’Leary, who employed as a director from 1988 and CEO from 1994 had changed many strategic decisions those assist the company to recover its financial situation, and it enjoyed a better financial position by 1995; therefore, the most prominent cause behind the success of Ryanair is the contribution of O’Leary (Johnson, Scholes & Whittington, 2008).

From the very beginning, the CEO had taken many initiatives to expand the business in a new zone, which influenced the company to order 45 new Boeing 737- 800 aircraft (189-seat capacity) worth $2b in 1998, and joined the NASDAQ-100 in 2002; therefore, Air Transport World magazine declared it the most lucrative airline in the world in 2006. However, the strategic, operational, and contingency planning depend on the prime purpose of this company, as it would like to hold a strong position in challenging operating environment; therefore, it sells seats on a one-way basis and offers low-fare services to stimulate market demand by creating a loyal customer base.

Organizing

All the employees, cabin crew, and pilots of Ryanair work as a team to provide the best services. For example, this company was in a bankruptcy situation due to share price plunged from €6.75 to €4.86 before 2004, and its sales revenue decreased dramatically. Still, they saved the company by organizing its resources and activities properly.

Leading

According to the annual report 2010 of Ryanair, O’Leary has extraordinary power to motivate the employees to show their highest effort to give quality service to Ryanair’s customers. However, both current and former staff and executives of this airline have admired O’Leary’s leadership style because he has the talent to lead people without any kind of leadership training and he has inside power to motivate and inspire the employees as well as the customers (Johnson, Scholes & Whittington, 2008).

Controlling

As the low-fares airline “Ryanair” is a large airline in short-haul routes, it should require numerous management teams to control and monitoring the functions of different sectors. For instance, it has a separate audit committee to control the internal financial position and report for external use. However, the higher-level management team and the staff are the key assets of this company. It has above 2,859 full-time and more than 3304 part-time flight and cabin crew along with 869 ordinary employees and newly appointed 1,200 employees to control all units (Ryanair, 2010).

According to the annual report 2010, the higher-management team has already demonstrated their performance and capabilities to manage human resources and create brand awareness in European short-haul routes, which also help the company if it wants to enter in long haul routes.

Recommendation

The managers and leaders can use the following recommendations for the future development of the company.

The implementation of strategies and technological development

The managers and leaders of Ryanair should concentrate on implementing the strategies and contingency plan as it is in the summit in the success in terms of market share, customer base, and profitability level in short-haul flights. Still, it can lose its position due to the competition among the low fare airlines. To achieve competitive advantages, this company’s leaders are highly concerned about the safety of passengers and employees, maintenance of aircraft, training to develop skills, and other issues to build the confidence of the customers to use low-cost services.

However, the Chairman of this company stated in the annual report 2010 that the company offered low prices during the recession. The employees performed well talent and resilience in the adverse economic condition. Therefore, this report suggests introducing effective communication and management tools to manage the company more effectively, such as SAP, ERP, CAL, etc. However, this company has already invested more than $10.0 million to purchase the necessary software.

However, Guardian (2009) reported that cloud computing could develop the organizational culture in case of green campaigns and other integrated marketing communications programs though this application could increase operating costs in different stages. As a result, this report recommends the company to integrate advanced information technology, such as a calculator, to estimate costs, which will help the customer to assess whether the price is lower than the competitor’s price; however, British Airways introduces this technology in the company’s website.

Carry on the business without anti-dumping activities

The leadership capability of Michael O’Leary to motivate the employees has discussed in the previous section, and the annual report confirmed that Ryanair is not intended to lose any high-qualified senior executives until it gets a qualified person for replacement, and this corporate philosophy designates that he should carry on until this company finds out a suitable person for this post. Though O’Leary contributes to rebuilding the company, the problem arises when he gets involved in criticism due to his rivalry attitude and hostile comments towards the competitors in the airline industry.

Consequently, the policymakers, regulators, EU commissioner Philippe Busquin, and the competitors like EasyJet and Aer Lingus have not considered him as a suitable person for next term. However, this report recommends that Ryanair reassign O’Leary for the CEO post, as he proved himself the most suitable person for the company. Still, he must stop to make such a decision those incur the company in legal barriers or the anti-dumping regulation of the European Commission though the market is too competitive.

Reference List

Bennis, W. (2003). Learning to Lead: A Workbook on Becoming a Leader. (3^rd ed.). NY: Basic Books.

Coutts, P. (2000). Leadership Vs. Management. Web.

Guardian (2009). Will cloud computing become the RyanAir of the future? Web.

Johnson, G., Scholes, K., & Whittington, R., (2008). Exploring Corporate Strategy: Text and cases. 8^th ed. Pearson Education Limited.

Kotter, J. P. (1990). Force for Change: How Leadership Differs from Management. (1^st ed.). NY: Free Press.

Montgomery, C. A. (2008) Putting Leadership Back into Strategy. Harvard Business Review. Web.

Murray, A. (2011) What is the Difference Between Management and Leadership?The Wall Street Journal. Web.

Ryanair (2010). Annual Report 2010 of Ryanair. Web.

Easy Jet is a brainchild of Stelios Haji-loannou the son of a Greek shipping magnet who was the founder of the company which dominate the European no frills airline currently. The operation of Easy Jet is based on the belief that the increase on demand for short haul air transport may be price elastic hence if there is a reduction on price for flights more people will fly. This view is not the same with traditional airline concept which is majorly based on the assumption that airline traffic develop in accordance to the economy where decrease in flight prices result to decline in revenue. In addition to that, Easy Jet reason on its Boeing and Airbus aircraft to broadly poses similar characteristic with a wider aisle on the A319 which is first to embark and disembark. They also contain extra seats on board (150 on the A319 compared to 143 on Boeing 737-700) thus the cost will be decreased by about 10% as compared to existing mix aircraft which will contribute in lowering ticket fares (Florian Mayer).

Ryan air is also one of the European leaders towards reducing the total number of people being affected by noise nuisance and decreasing the rate at which this nuisance occurs. It achieves this through the introduction of the new application of modern technology which requires each aircraft to adhere with current noise requirement (Ryan Air, 2006).

Easy Jet operational strategy from point to point takes the form of business model from American air carrier which is southwest. It normally makes its daily operation flights in major primary airports within the cities that it serves which include: Paris Charles de Gaulle Airport and Paris Orly. Apart from that, it also focuses on the methods of attracting customers or business passengers through offering convenient services such as the alternative to transfer on a flight which had been scheduled earlier at no cost charge.

Ryan air too has the same business structure which is borrowed from American air carrier operating in Southwest with its dominancy of flights being experienced in the entire Europe air.According to its operation structure which is its strongest operation being found within secondary airports which include Paris Beauvais Tille Airport which is 75 minute bus journey from Paris this majorly involve passengers being transported from one point to another. This is due to an effort being made by the department of management in ensuring that its flights cost is reduced. (Easy Jet). The strategy of Ryan air was to be all things to all people offering the least fare upon its passengers with the highest customer service. Its operation is limited to complex government regulated environment which is very complex of which its strategy does not hold in front of the complex environment with the current configuration of resources which in turn affected the negatively the share holder.(Ryan Air)

However, Ryan air has consistently maintained its low fare passenger airline which is meant to serve at haul point to point routes between Ireland, UK and the continent of Europe. It has also managed a stiff competition from its competitors by offering a highly differentiated product which is of low fare. In addition to that, Ryan air may achieve this by implementing a better service system which may reduce cost but deliver services and offer employees career development plans which ensure that the employee morale is increased.

Easy Jet also serves 103 destinations which are found within 27 countries in the entire Europe and northern part of Africa. Through its operation strategy for point to point, its home base is in London Luton of which it’s main base being at London Gatwick which offers 63 destinations. However, her also exist other bases through out Europe including: Belfast, Berlin –stonefly, Bristol, Nottingham and Newcastle among other Easy Jet base.

References

1. Florian Mayer. 2003. A Case Study Of Easy jet And The Airline Industry. Web.
2. Nigel Evans and David Campbell. 2008. Competitive strategy at Ryan air.
3. Ryanair.com. 2008. About Us.
4. Wikipedia. 2008 Easy Jet. Web.

Ryanair PLC is a limited company involved in air transport ventures on a global scale. For the year ended March 31, 2009, it achieved revenues in the excess of €2,942M. Similarly, AerLingus PLC engages in air transport with a global presence. As observed from the financial records of the organization, its operating revenues topped €1,357.4 M in the year ended December 31, 2008. Both companies have registered locations in Ireland and have in the past excelled in the air aviation industry.

Balance Sheet Summary

A company’s balance sheet displays the net worth of an entity. From the balance sheet, the stakeholders are able to discern the financial strength of the entity by comparing the components of the balance sheet to various benchmarks. As observed from Table 1, the current asset of Ryanair PLC topped €1,583,194,000 as compared to AerLingus PLC’s, with a current-asset portfolio of €1,076,817,000. Ryanair had total of €4,804,668,000 in non-current assets whereas AerLingus PLC boasts of non-current assets amounting to €1,007,666,000 as at the end of the accounting period.

Table 1

As equity-based companies, Ryanair PLC and AerLingus Ltd. have shareholders equity of €2,425,061,000 and €772,695,000 respectively. Current and long-term obligations are also part of the capital structure of both firms. From the financial reports, the current and non-current assets of Ryanair PLC amounted to €1,565,361,000 and €2,398,440,000 respectively. AerLingus Ltd. had short-term obligations of €519,593,000 and long-term obligations totaling €2,398,440,000 by the end of the period under observation.

Company Information

Revenues from traveling passengers form the major portion of revenues for the transport industry. However, in addition to passengers, both airlines engage in luggage and courier services. Ryanair Ltd. experienced a 15% increase in passenger volume to 56 million during the period 2008 and 2009 while AerLingus Ltd. reported a 7.5 % increase to 10 million over the period considered. The increase in passenger volumes translated to increased revenues for both airlines over the same period. According to the financial records of both airlines, increased revenues were a direct result of increased occupancy. Similarly, both airlines increased the fleet of aircrafts in a move to improve customer satisfaction. As postulated in Table 2, both airlines had sufficient cash balances posted in their balance sheets, which represented financial strength.

Table 2

According to the financial records for the year ended March 31, 2009, Ryanair PLC increased its long-term debt obligations from €2.266495B to €2.398440B due to proposed expansion plans. On the other hand, AerLingus PLC magnified their long-term obligations from €333.3M to €447.92M as observed from the financial records for the period ended December 31, 2008. The directors of Ryanair PLC presented the signed records on July 30, 2009, while for AerLingus Ltd., the management signed the signed the financial records on April 27, 2009. The financial records also portray that KPMG audited and certified the accounts of Ryanair Ltd’s accounts while the appointed auditor for AerLingus PLC during the period ended March 31, 2008 was Price Water House Coopers.

Market capitalization

As a factor of company valuation, the level of market capitalization represents the total value of the company’s tradable stocks. It displays the worth of outstanding shares of a public limited company. As posted on the Irish Stock Exchange, both limited companies referred to above had actively trading stocks on the exchange. Ryanair Ltd. experienced an increase in market capitalization with AerLingus Ltd. losing ground on the same on the two occasions considered.

Introduction

RyanAir is one of the world’s most famous ultra-low-cost airlines, providing transportation to over 40 countries in Europe, as well as several destinations in Africa and the Middle East. The company operates a large fleet of Boeing 737-800 aircraft, and was the largest budget airline in 2016 based on the number of international passengers flown (Rodríguez-García et al., 2020). RyanAir has over 17,500 employees and achieved its peak revenue in 2019, scoring at 9.5 billion dollars.

With the beginning of the COVID-19 epidemic, however, the company’s profits suffered a near 70% decrease, dropping to 3 billion dollars by the end of 2020 (Rodríguez-García et al., 2020). With vaccines being introduced to populations and borders slowly reopening, the question of whether Ryanair will be able to regain its dominant position in the market remains open.

Strategic Positioning

The airline industry has suffered a major blow during the COVID-19 pandemic. Many countries have prohibited flights for prolonged periods of time, significantly curtailing the number of passengers and revenue provided. Super-low-cost carrier companies were hit the most, as their business model relies on the volumes of transportation. Luxury and premium-based companies, such as Virgin Atlantic, Emirates Airlines, Singapore Airlines, and others were hit slightly less, as a certain minimum of air transportation had to be reserved for political and business leaders (Prichinet & Le Duc, 2020). The overall number of passengers in 2020 dropped 70% across all carriers, when compared to 2019. This increased the competition among the companies while significantly curtailing the size of the market.

Porter’s Five Forces consist of competitive rivalry as influenced by four other positions: supplier power, buyer power, thread of substitution, and thread of new entry (Ellis, 2020). As it stands, competitive rivalry is high, as motivated by low supplier power, high buyer power, and potentially high tread of new entry in the future (Ellis, 2020). The chance of substitution remains low, as air travel remains the fastest and most convenient way of getting across large distances. Low supplier power is justified by the fact that companies have an overabundance of plains compared to the number of allowed routes, as a result of restrictions and quarantines (Prichinet & Le Duc, 2020).

Supplier power decreased due to a lack of need for many planes to keep expanding until COVID-19 is over. Buyer power increased due to the fact that low-cost customers were largely cut off from traveling, and premium class customers remained capable of choosing between the remaining ones (Prichinet & Le Duc, 2020). Threat of new entry is at all-time low due to market shrinking by 70%, while supply remained largely the same (Rodríguez-García et al., 2020). The factors most relevant to RyanAir’s situation include buyer power and increases in competition.

The firm’s capabilities revolve around ultra-low-cost services, providing bare-bones traveling for extremely cheap. RyanAir’s strategy was not easy to imitate not because of specific company practices but because of a necessity to invest in planes – new entrants to the airline industry are few, and those already existing have their niche (Prichinet & Le Duc, 2020). The firm’s unique capabilities are not a good fit at this time, due to the volumes of traveling having been cut (Prichinet & Le Duc, 2020). The position of the company’s competitors that feature a more balanced number of services, including luxury traveling, is better, as they can tap into the less-restricted luxury market for businesspeople, politicians, and the like.

Synthesis of Competitive Positioning

Ryanair is in a position of weakness right now, having lost approximately 70% of their revenues in the past year. At the same time, the company managed to survive, and has most of its huge airpark of 400-500 planes intact (Prichinet & Le Duc, 2020). Their smaller competitors running fleets of 1-10 low-cost planes did not survive the crisis, resulting in a drastic reduction of potential low-cost offerings in the future (Prichinet & Le Duc, 2020).

Once the COVID-19 crisis has passed, Ryanair would be in the position, along with other survivors of the crisis, to retake the vastly-expanding market of airline travel. Customers are showing to be travel-starved, so a tourist boom is expected as soon as COVID-19 becomes less prevalent due to world-wide vaccination and immunization efforts (Prichinet & Le Duc, 2020). However, if the existing pandemic lasts for 2-3 more years, RyanAir will be at a disadvantage due to not having adapted to the crisis in time, resulting in company downsizing and a substantial market loss.

Conclusion

RyanAir was one among the many airline companies that suffered greatly from the restrictions placed upon traveling due to COVID-19. They suffered more than the mixed airline companies due to their sole focus on super-cheap low-cost business model, which relied on volumes of passengers to make ends meet. Without these volumes, RyanAir lost 70% of its income, dropping from 9.5 billion dollars to merely 3 billion dollars of revenue for the past year. The unique qualities the company possesses do not allow for seamless adaptation to the COVID-era market. However, there is the potential to wait out the crisis and gain momentum once it is over. The dangers of such a strategy would be further losses if the crisis prolongates and low-cost traveling becomes an unsustainable model.

References

Ellis, D. (2020). Developing a strategic framework of analysis for air transport management. Transportation Research Procedia, 51, 217-224.

Prichinet, G. C., & Le Duc, N. (2020). Strategic analysis of Ryanair. Web.

Rodríguez-García, M., Orero-Blat, M., & Palacios-Marqués, D. (2020). Challenges in the business model of low-cost airlines: Ryanair case study. International Journal of Enterprise Information Systems (IJEIS), 16(3), 64-77.