Five Forces

Analysis
LB5113: Corporate Strategy
Competitive Rivalry - High
EasyJet 
• There are a number of low-cost airlines
operating in the routes similar to Ryanair European company, based in Luton, London 

• Minimizing their costs by reducing

onboard passengers' facilities and
airport outlay costs

Norwegian Air Shuttle (NAS)

• Alternative transportation
Norway’s largest airline, headquarters
Norway

WizzAir

A Hungarian low-cost airline, head

office in Budapest
Threat of New Entrants- Low
•Airports only have a limited amount
of slots
• The aviation industry is an expensive
industry to entry • Check-in counter

• The companies need capital for •Security check area

aircrafts
• landing/taking-off rights •Gate access

• Government policy 

• Eu regulation of emission
for airlines
Bargaining power of Suppliers - High

• Only two manufacturers, DUOPOLY

• Suppliers able to increase their price easily

Bargaining power of Buyers - High

• Large customer size

• Low switching cost

• Lack of loyalty
• High possibility to switch airlines
Threat of substitutes-Medium
• Price, time consumption, and nowadays ecological footprint should be considered while
assessing the alternates available on the market.
 
• The substitutes to Ryanair are other modes of transportation such as trains, busses, cars, etc.

• Cars and busses don’t offer much of a threat to air travel due to price, time and convenience
constraints but the same cannot be said about trains.

• Low-cost air travel on longer routes still offers a faster, more comfortable, and cheaper mode of
transportation.
Threat of substitutes-Medium
• However, the short-haul flights in Europe have viable train alternatives.

• According to a recent study by (OBCT), one-third of the busiest short-haul flights in the EU have
train alternatives under six hours.

• To control carbon emissions by airlines especially on short-haul flights, train travel could prove
to be a viable and eco-friendly alternative.

• Hence, there is a legitimate threat from trains to Ryanair's short-haul flights in light of carbon
emissions 
Key Success Factors

•Pricing strategy or low fare offerings •Low operating cost

• Key selling point has been low

• Purchase of aircraft from a single
fares designed to stimulate
manufacturer enables Ryanair to limit the
demand.
cost associated with maintenance,
personnel training, etc.
• When launching a new route,
Ryanair’s policy is to price the
• Ryanair reduced airport charges by opting
new route at its lowest fare.
for less expensive gate locations and
outdoor boarding stairs.

• Ryanair introduced productivity-based

incentive payments for its employees.
Key Success Factors
•Ancillary revenues

• Ancillary services accounted for approximately 25% of Ryanair’s total

operating revenues.

• Ryanair believed in no frills policy.

• In-flight beverages, food and merchandise are sold on board along with other
services such as charge for check-in luggage, etc.