Ryanair Airlines’ Yield Management

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Three fundamental and major factors contribute to yield management and as a result customer satisfaction. These three factors are disciplines that help enhance the capability of the employees to perform well along with the capability of the company to provide the employees with major things that they need. The said disciplines include architecture, psychology and business. Each discipline contributes a certain factor in the satisfaction of the clients with revenues as well as with their advertisement. (Raymond, 2004).

Large companies, especially multinational organizations consider their customers as the main source of strength of the organization. However, because of some circumstantial occurrences, the needs of the employees are at times disregarded because of the fact that the company focuses on serving the clients well to be able to generate high rates of profit for the organization and provide the yield management techniques in the context of the customers.

This is the main reason why in this study, the revenue demands in terms of working environment and their psychological reaction to the actual job that they are doing. People who have been with an organization for a long time treated as major assets of the company. The fact that they are already directly acquainted with the company or organization, the efforts that they have placed forward for the sake of the company’s success determines their loyalty towards the organization. (Robert, 2004).

Alongside, balanced relation with the workers it is important to take perfect decisions. The Ryan brothers publicized in the month of April 1986 that they were about to launch an air service between London and Dublin. This was the first time that their airline was about to face competition and steep rivalry from two fellow airlines that were operating on the same route. These airlines were British Airways and Aer Lingus. This was because this route was a very busy route and thus this Irish airline by the Ryan brothers subjected to face difficult oppositions. The best possible strategy for countering this competition was based on a movement the supported a low cost economic fare structure. (Regis, 2005).

The £98 fare structure was to make money because the initial infrastructure of this airline lacked huge overhead costs generally incurred by an established airline company. This was more relevant because the move of economic fare structure based on the strategy that it indented to make an entry into an already populated route of air service between London and Dublin with established competitors. This was the best possible method of penetrating the market by luring the customers with extremely low fare. It is obvious that the £98 fare structure would yield profit because it would have two specific advantages along with being about 50% to 90% lower rate than its competitors are. (Graham, 2004).

First, with the lower fare system the company was able to attract better amount of customers and thus was able to penetrate the market, which is expectedly advantageous for the long run, and secondly, with lower cost infrastructure like lower number of employees the company was able to sustain its position and plough back profit margin in a gradual manner. This is the best example of the efficiency of a company in terms of organization.

In this context, it needs mentioning that the case study of Ryanair has become an icon for students and teachers alike in the parameters of yield management and continues to be a successful model in the parameters of industrial and management success formulations. This specific case study remains to this day as a groundbreaking approach in the world of business studies where a high valued industry like airline business is penetrated mainly on the aspects of low priced and economic fare structures. (Jerome, 2003).

References

Graham Edkins. (2004). Innovation and Consolidation in Aviation: Selected Contributions to the Australian Aviation Psychology Symposium 2000. Ashgate Publishing.

Jerome, H. Barkow. (2003). The Adapted Mind: Evolutionary Psychology and the Generation of Culture. Oxford University Press, USA; Reprint edition.

Raymond Andrew Noe. (2004). Employee Training and Development with Powerweb Card 3/e. McGraw-Hill/Irwin; 3 edition.

Regis, McNamara. (2005). Critical Issues, Developments, and Trends in Global Aviation: Volume 3. Praeger Publishers.

Robert A. Levin. (2004). Talent Flow: A Strategic Approach to Keeping Good Employees, Helping Them Grow, and Letting Them Go. Jossey-Bass; 1 edition.

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