Which competitor is more threatened by Ryanair and which one will be more aggressive in response to the pricing strategy of Ryanair? The massive aircraft orders to be delivered over the next ten years enable Ryanair to strengthen its market position in Europe while simultaneously reducing its environmental impact and fuel consumption through the utilisation of state-of-the-art aircraft a critical success factor in the low-cost airline industry Farrell, 2014. Increasing fuel rate is an important economic factor that influences the entire aviation industry. The firm is very liquid and creditors of the company will be willing to give more flexible credit terms to the company. The situation becomes worse when exchange rate fluctuation takes place. Air Europa Aviation 2107 Alliance It has entered a long haul flights partnership with Air Europa via Madrid providing reduced check-in baggage fees.
At present, Ryanair is the lowest costing airline in Europe, one third lower than its nearest rival, easyJet. As a result of charging some of the lowest prices in the industry, Ryanair has seen growth in traffic and reported record revenues. For instance, acquisition and mergers with other airlines, code sharing and sector consolidation, significant hike in number of short distance travellers teamed with a swelling market share and market growth are some factors in the macro environment of Ryanair that act as achievable opportunities. The technological environment does not have much of an impact on the organization as of now. In other words the company made investment on the assets by 50% debt and 50% equity.
This is a feed forward control as it prevents anticipated problems in the future Robbins et. This investment has opened new sales channel for Ryanair Holdings Plc. It also sells rail and bus tickets. The fixed costs and variable costs should be identified and apportionment done by laying down the assumptions. Recommendations: Based on the analytical issues it can be recommended that Ryanair can merge with other companies as it can be a brilliant strategy for the growth and success of the company.
Customers are unhappy with Ryaniar because of it poor customer service the only source of attraction for them is the low fare. A value concatenation analysis performed for Ryanair is shown in appendix 04. Gain competitive intelligence about market leaders. The company also have a good control over the financial position of the business, in the sense that the liquidity position, leverage, profitability ratios are maintained at a balance level. By 1993 Ryanair has carried over 1 million passengers. According to Porter 1980, p.
It is headquartered in Dublin, Ireland and employs about 8,560 people. The Bargaining Power of Suppliers There is high bargaining power of suppliers in the industry and there are mainly two major aircraft producers in Europe which are Boeing and Airbus. Indeed, Ryanair has a specific strategy that consists in transferring the costs to the passengers the company has always tried to find ways of charging passengers for services once considered intrinsic to an airline ticket. Besides, the tourism industry could be increased providing huge opportunities for Ryanair. Delivery formatReports are delivered in pdf format and can be downloaded from your online account called My Pages immediately after purchase. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Firms who are cost leaders benefit from rivals which have prices lower or at the same level because they get extra profit for that and it opens the way for the barriers to enter the market Miller and Friesen, 1983. Ryanair operates in 180 airports over 29 countries, flying 1,611 routes with over 1,500daily departures whilst easily outstripping competitors and increasing barriers to entry. Ryanair has a quicker turnaround strategy, compared to its competitors. This figure may seem small, but for customers who travel with Ryanair on a frequent basis, this could lead to a fairly substantial amount of extra time consumed, with may lead to some disgruntled customers. Ryanair is one of the economical airlines around the world and it has ample of opportunities for business diversification in other markets. Actually they tried, but it still not working. Customer ratio can increase if Ryanair can establish the latest trends in Airline management and marketing to meet the demands of their market.
Ryanair faces the same from the Ireland government who does not sup port the merger of Ryanair with Aer Lingus, believing that this merger is not in the best interest of the Irish passengers. Strengths Ryanair is the biggest European airline company. The firm began operations with a staff of 25 and a single 15-seat airplane flying between Waterford and London. Critical Analysis and evaluation of the Key Issues : Ryanair 2. Ryanair is a leading brand for low-priced flights, which is ideal for this recessionary period. With two routes in operation, Ryanair carried 82,000 passengers in its first full year of operation.
The Threat of Substitutes Substitutes, such as, sea transport, railroad networks, busses and rent-a-car companies are the services that generate relative value for customers same as airline industry. It represent a great opportunity for Ryanair Holdings Plc to drive home its advantage in new technology and gain market share in the new product category. Tony Ryan founded Ryanair 15 years later in year 1985 in Ireland. Whilst sensitivity to seasonal fluctuations and economic performance is rather the weakness of the low-cost airline industry in general, as low-cost airlines are primarily chosen by leisure travellers, any sudden change in the demand e. Ryanair is continuously faced with inevitable threat of stiff competition and for it to survive in the global competition it has to develop new products with better standard than its competitors.
Equip yourself with information that enables you to sharpen your strategies and transform your operations profitably. Strong focus on environmental initiatives Political 1. However, operating as the lowest costing airline in Europe has had an overwhelmingly positive effect on the company. High turnarounds resulting in maximum Misleading information about ticket fares and aircraft utilization Reduced commission to travel agents Out sourcing Lowest labor cost due to non-unionized labor force Highest seat density destinations. Leary is the central decision maker of the firm, this stands as a weakness as the firm has to rely fully on one person whether right or wrong. Despite Ryanair recording 18% profits on capital return, in a very profitable industry,.