RYANAIR CASE

Ryanair is an Irish low-cost and no frills airline founded in 1984, its primary operational bases
are situated in Dublin and at London Stansted Airport. Ryanair has been considered as the
“Europe’s greenest airline” due to his investment on new technologies, reducing fuel burn and
CO2 emissions. Moreover, its service has increased, expanding their total operations service in
38 countries in Europe, North Africa and Middle East. Ryanair has been increasing its net
profits despite the fact of the high oil prices and worldwide recession of nowadays, this due to
they have differentiate themselves, not only because of the fact of a low cost and eco friendly
airline, but also because of their strategic operational and commercial decisions. Ryanair has
been able to offer low fares in market, increase profits and still fulfill the industry standards
which are required.

Due to its no frills business model, Ryanair has been able to offer a service which everybody
needs but at the price that the majority of people can afford. Not everyone inside the plain needs
certain services such as snacks, having tv to watch movies, or carry a lot of luggage. For some,
flying on an airplane doesn't mean they have to have the luxurious experience ever, or just
having an experience full of services. To certain people, flying is only the way they get from
one point to the other. So, by reducing “unnecessary costs” (inside their value proposal),
through not investing in these extra services, plus the fact they reduce the use of fuel because
of the technologies they use, they can afford the fact of having low cost tickets, and that is why
Ryanair is capable of offering good tarifs.

However, recently Ryanair has been experienced some issues, including pilots protesting
because according to them the airline does not provide good working conditions. “"Our claim
includes many issues including pensions; loss-of-licence insurance; maternity benefits;
allowances; and a fair, transparent, and consistent pay structure.” (The Sun Uk, 2019) also, the
airline has been working on improvements on the safety area, Ryanair’s safety reputation was
not the best but now a days in the top safety airlines around the world (Airlines that has never
experiences major crash) “Since its first flight in July 1985, no one has died in an accident
involving the Irish airline.” (The independent UK, 2018).

Ryanair can offer flights starting from 5 euros, and still being profitable because of its supply
chain. The are some main and simple factors that can affects the net profit of an airline, Ryanair
takes the majority of them and reduces the costs all the way through, without sacrificing the
quality of their service, and this is the main core of the airline, offering a good standard quality
service at a really good price. Ryanair has a clear vision of what they do, they’re really attractive
because of their prices, and they do not lie with what they offer, the company know they’re not
luxurious or pretentious. The way Ryanair can still be profitable is simple, starting from the
airports in which they operate, the majority of them are not the principal airports of the cities,
which means, they are not the biggest airports or most convenient, but this directly means less
operative costs and taxes. The working personal of Ryanair has some different conditions than
the workers of some other airlines, Ryanair just hire people who can tribute inside Ireland or
tribute on an autonomous way. The airlines uses just the minimum legal amount of personal in
their flights. Moreover, Ryanair maximise the use of the capacity of the plane, leaving little
space between rows in the plane but having more seats, this means that they are not the most
comfortable airline existing but people are willing to adapt to this, in order to pay less. Finally,
They do not include free inflight services in their flights such as luggage or food. So far Ryanair
is profitable because they just use and sell the necessary, its value promise it's just to use and
buy what you need in the most simple and high quality way.

Nevertheless, Ryanair it is not the only airline that provide cheap flights, one of the biggest
competitor of Ryanair it is EasyJet, this British airline concept it is also to provide flights at a
reasonable price, in other words, they have the same promise in the industry as Ryanair.
EasyJet’s business plan has some similarities with Ryanair’s, both of them focus on reduce
unnecessary cost (as meals and snacks provide it in the plain), they operated in secondary
airports with low taxes, and their main target it is business travelers. This business plan allows
them to provide low cost tickets and still be profitable. However, these two companies wants
presence in the market or even domination, that's why these to companies enter into war after
the announcement of EasyJet open Irish routes in 2004. The routes that EasyJet established in
Ireland (from Gatwick to Shannon and Knock) are the only ones that this two airlines compete
with directly, this can be difficult because these two airlines have predatory prices, and this
means a prices war, which leads to strategic overcrowding and subsequently to the bankruptcy
of any of the companies in the sector of Ireland. That's why Ryanair´s chief executive Michael
O'Leary has to implement a strategic plan to overcome EasyJet and establish his domain in his
house Ireland. Ryanair has to differentiate from EasyJet, they can offer more flights at different
schedules, lower prices according to the demand and provide better service.
Because of the fact of the prices war which they are affording, none of these companies can
take that as the competitive advantage they used to have in the market. Therefore, O-Leary
need to find another competitive advantage or characteristic that their service has and which
they can differentiate themselves from the rest, moreover

As a response to EasyJet's move to Ireland, it would be recommendable to potencialize the

ecologic area in which they have also focused their strategy of low cost. For example the Way
they have reduced their residuals that services such as offering coffee or other products create
it is a good way of achieving the goal, however they could invest on new ways to contribute to
the ecological responsability strategy. Focusing on creating innovation towards that point
generates differentiation in the market and it is a potencial strategy. This could de developed
by investigating new ways of producing organic fuel , which is an área of investigation that
not every airline has developed yet.

To conclude, they found a really good market which they have really know how to take
advantage of it in a very good way. However the proposals that we hace made are directly
related to the other airlines. But ryanair has to take into account that the competence will
increase in the sector, and will have to diversify it's business model and create new strategies
parallel to the necesities and problematics that the society has nowadays, such as the
environmental problem.

References:

Case Study Analysis Ryanair The Low Fares Airline Management Essay. (2019). Retrieved 5
September 2019, from https://www.ukessays.com/essays/management/case-study-analysis-
ryanair-the-low-fares-airline-management-essay.php

Cooke, P. (2019). Ryanair strike 2019 - Latest news and updates on flights. Retrieved 5
September 2019, from https://www.thesun.co.uk/news/9678132/ryanair-strike-2019-dates-
update-august-pilot/