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Ryanair Case Study
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| Words: 4839 | Submitted: 03-Dec-2011
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DescriptionCase study about Ryanair
Ryanair case study.
(See appendix A for a complete breakdown of Ryanair’s history and future plans)
Ryanair was launched in 1985 with a daily flight between Waterford and London Gatwick. A year later, Ryanair broke the cartel of Aer Lingus and BA on the Dublin to London route. Over the next 3 years, Ryanair expanded rapidly. Under a new management team, a major overhaul of the airline was undertaken in 1990/91 and was relaunched as the first of the new breed of ‘low fares/no frills’ airline. Ryanair is Europe’s largest low fare airline with 76 low fare routes to 13 countries in Europe carrying over 12 million passengers. It is the second largest scheduled airline in the UK in terms of passenger carryings. (Key Note Ltd 2002)
In January of this year, 2003, Ryanair announced that they had ordered another 100 new Boeing 737-800 series aircraft.
Also announce their takeover of the low-fares airline, Buzz from KLM and they plan to turn around the loss of £0m euros that Buzz is facing.
In February, they opened a new base in Italy.
In April, another base was opened in Sweden with six new routes.
Financial results that were released in June showed:
“passenger traffic for the year grew by 42% to 15.7m as average load factors increased from 81% to 84%, primarily due to a 6% reduction in average fares. Total revenue in the year rose by 35%, however operating costs rose at a slower rate by 26%. Net Profit increased by 59% to 239.4m euros.”
3 new routes were announced in August and now, “Ryanair has 127 routes that cover 84 destinations across 16 countries.”
The nature and extent of competition in the market and how
competitive advantage is sought
Ryanair is expected to carry almost 24 million passengers this year. Being the first airline to introduce low fares, it has revolutionised European air travel. They offer choices, competition and very low fares on all routes where they compete with some of Europe’s biggest and strongest airlines. (www.ryanair.com)
On the basis of the success of the company, one could assume that the service offering is a good one. Of those factors included within it, cost leadership is thought to be the most important. Cost leadership is often a very effective form of competitive strategy. It is certainly very effective in the European market, where the cost of flights is still on average twice as much as the US. (Competitive Advantage M.E. Porter 1985).For example EasyJet is aware that customers would like to fly the Geneva Barcelona route with someone other than SwissAir i.e. cheaper alternative. However since Switzerland is not a full member of the EU, this route is an international route meaning that ...
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