Ryanair case study 06/04/2009 Ryanair case study Executive Summary The purpose of this case study was to evaluate the performance, management functions and future perspectives for Ryanair, which strive to become the leader in the budget airline industry in Europe. Looking at the case study it is evaluated that Ryanair performance is based on focusing the low cost sector specially focusing the budget influenced business and recreation travellers. The organisation has attained success in the low cost market with increasing organisational problems in decision making, planning, customer service, ethics and corporate social responsibility.
The analysis from SWOT indicates the problem of organisational culture need to be fixed in order to achieve future growth objectives; the organisational culture of shared values will have a direct impact on their decision making, controlling functions, customer service and create value for the organisation. So it is recommended that Ryanair leadership should create an open and integrated departmental organisational culture to create value for the organisation and differentiate form the other budget airliners.
Ryanair had a usual new company turbulent start with losses of IR? 20m within next five years.
Then Rayanair shifted their strategy on the model of Southwest Airlines i. e. became the no frills or budget airline & The Rayan family appointed new management team headed by Michael O’ Leary. It was huge success and the company floated their shares in international stock markets in few years. Rayanair objective is to maintain its position as European leader in low fare airlines operating frequent point-to-point short haul flights focusing on budget conscious leisure and business travellers (O’ Higgins 2004).
Rayanair Performance Ryanair persistent growth and profitability for many years and its strong position in comparison to struggling full service airlines put Rayan in bargaining position for procurement of airplanes, maintenance, staff & airport services. Despite increase in their operating expenses Ryanair kept on growing its profits. And their Passenger volume increased by 42% in 2003 decreasing the fare by 6%. In 2003 Rayanair acquired Buzz airline, a budget subsidiary of KLM based at Stansed, acquiring Buzz and the Stansed airport’s slot became the competitive advantage on that location.
Ryanair’s cost reduction strategy mainly focuses on • • • Fleet commonality (keeping most of the airplanes alike e.
g. Boeing 737) Outsourcing the services (maintenance, catering, baggage handling) Airport charges (preferring low airport charges locations or gaining subsidy, avoiding main city locations) • • Staff cost (contractual basis, earning more due to more frequent flights) Marketing costs (using website bookings, reducing travel agent commission) Page 4 of 26 Ryanair case study 1. Environmental and stakeholder analysis 1. Regulatory Ryanair manipulated their strong position gaining illegal favours from some airports resulting in regulatory fines by the EU commission; the company has also been fined for their services to the disabled passengers.
The EU and courts have also fined Ryanair on many occasions due to illegal favour of airport subsidies from some airport locations and other issues like their refusal to provide wheelchair to disabled passengers. The EU and Irish legislators has criticised