Ryan Air

Ryan Air is a cost-effective airline passenger service based in Europe.  The airline company has really come a long way since it began.  It started its services in the year 1985.  It is one of Europe’s first airlines, which offer lower fares, and at the moment it is still using this strategy.  It operates its services across 26 nations in Europe.  It has 23 bases in various European locations.  It operates on 553 routes across Europe.  It plans to have a fleet of about 163 new Boeing Aircrafts by March, next year and would have about 225 in the year 2012.  It has employee strength of about 5000, from about 21 countries.

Compared to other airline services, Ryan Air offers not only cheaper services, but also would be ensuring that quality in terms of customer satisfaction is delivered.  Ryan Air feels that the two most important things any passenger would be looking for is cost-effective services and punctuality.  Ryan Air does consider that the other airlines would be increasing their costs by providing several services that are actually unnecessary during air travel.  The airline would not be providing the back-up services, provided by several other costly airlines.  The airline promises that as the costs are down and the flights are punctual, the customer satisfaction is really high.  Ryan Air has one of the best punctuality record compared to any other airline.  It has a punctuality record of about 92 %, far superior than Lufthansa’s 84 %, British Airways 81 % and Alitalia 80 %.  These are the two things that Ryan Air is concentrating on.  Ryan Air feels that about 99.9 % of all passengers are actually satisfied with the services provided on its flights.

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Ryan Air promises more than any other airline, it would be providing the lowest rates on that particular route to all the passengers.  This is regardless of the whether other airlines are actually competing with Ryan Air or not.  There are several ways by which Ryan Air is able to reduce these costs.  It invests the largest aviation equipment, which are not only fuel-efficient but also maintenance free and safe.  Ryan Air has purchased several of the Boeing 737-800’s, which is a very fuel-efficient aircraft.  Ryan Air is seeking all its aircrafts from one manufacturer, which is helping to lower down the costs (by engaging in bulk purchases).  Besides, with a single manufacturer, many of the company’s requirements can be fulfilled.  This statement may not be true as by providing cheaper rates, other airlines would automatically compete with Ryan Air in order to bring down the airfares.

Ryan Air offers Internet booking services.  Once the customer chooses his itinerary, he/she would be presented with several options from which he/she could select the most favourable one.  The passenger is then informed about the terms and conditions about flying.  The customer can pay the fares through credit card.  All delays, cancellations and diversions are actually informed to the customer through email, phones and airport notifications.  In the year 2000, major overhauls were organized in the reservation system operated by Ryan Air.  The company began to use the services of Skylights.  This company has established a good name in the market, and this has helped Ryan Air further.

The Growth of Ryan Air has been phenomenonal.  In the year 1986, about 5000 people flew in the aircraft.  In the year 1990, about 644, 000 people flew and in 1995 about 1, 666, 000 passengers flew.  In the year 2000, about 5, 000, 000 flew and within a 2-year period, this doubled.  In 2007, about 30, 000, 000 people have flown, and this figure would double by the end of 2008.  Thus, it can be said that the company would be doubling its customer base within a period of ten years.

Initially, when Ryan Air entered the aviation market, it tried to compete with British Air and Aer Lingus.  It had introduced an airfare of UK pounds 99 from London to Dublin.  This was less than half offered by other service providers.  There was uproar amongst customers, who immediately began to purchase tickets for this new airline.  There were some safety concerns with the customers, but immediately on experiencing that the flight services were as good as their competitors, things started getting better.  Within a few months, both British Airways and Aer Lingus slashed its fares.  Ryan Air then started launching services to other parts of Britain such as Glasgow, Manchester, Cardiff, etc.  It slowly began to purchase newer and bigger jets.  The company actually started with a small team (25) and with a low investment (UK Pounds 1).  As the company had not invested much, it would find operations a very difficult issue.  However, the strategy of offering low-cost services to the customers kicked off huge dividends almost immediately.  Initially, Ryan air only had a uniform passenger service.  However, within a period of three years it began to introduce business services for high-end customers.  During the initial 5 years, Ryan Air suffered losses to the tune of about 20 million UK pounds.  However, the company continued to invest a further 20 million pounds to absorb the losses and to further expand.  It was around this time that several other competitors in the loss-cost range actually entered the market and began to seriously affect with the business of Ryan Air.  Although, this seemed to compete with the services of Ryan Air, it also appeared to be a benefit for them as more and more customers were becoming aware of Low-cost flying.

During the Gulf war period, Ryan Air had a lot of problems and had to further lower the airfares in order to draw in more customers.  However, the Gulf War turned to be a major profit-making period for the company, as it had made about UK Pounds 293, 000 in 1991.

In 1995, Ryan Air defeated British Airways and Aer Lingus for dominance over the Dublin-London sector.  The formula employed by Ryan Air thus seemed to be a success in about 10 years.  Ryan Air soon began to employ larger aircrafts in its fleet.  It launched services to other parts of Europe such as Oslo, Stockholm, Paris and Brussels.  It entered the NASDAQ Stock Exchange in 1997.  Within a period of ten years, Ryan Air was able to increase its initial share price by about 20 times.  The employees of Ryan Air are given shares at subsidized rates.  The UK Civil Aviation Department awarded Ryan Air with the most punctual airlines in 1997.  Ryan Air slowly expanded into other parts of Europe and also employed bigger and more flights in its fleet.  Ryan Air began to launch an Internet booking strategy in the year 2000.  It had one of the largest website for air ticketing in Europe.  Along with this Ryan Air also offered other services such as hotel bookings, airport transfers, etc.  It provided customers with rail travel, travel checks and travel insurance.

In the year 2002, Ryan Air launched its European Base in Frankfurt.  This provided a launch pad to several other locations in Europe including France, Italy and Norway.  Having a strong operations basis in Frankfurt meant a threat to Lufthansa, and soon Lufthansa had launched a legal tussle against Ryan Air.  However, Ryan Air was able to overcome this, and soon it began to compete with Lufthansa in the low-cost aircraft market.  The main task of Ryan Air was to become one of the topmost airlines in Europe.  Ryan Air soon acquired Buzz (a smaller airline company) from KLM.

In terms of customer services, Ryan Air managed to overcome Air France and British Airways, and become the topmost in the year 2002.  In the year 2004, Google applauds Ryan Air to be the topmost airline company in the World.  Ryan Air Company itself accounts for more than 98 % of its assets.  In 2005, the company launched major operations throughout Europe, and was elected as the ‘World’s Favourite Airline’ which was a big boost to it.  The company carries more than 4 million passengers on international routes in a single month.  The Company has adopted the policy of ‘no fuel surcharge’, which has gained it a position over British Airways, Air France and Lufthansa.  Their opponents are known for overburdening their customers with high fuel surcharge rates.  In 2006, the company offered more than 436 routes with low cost fares and in more than 24 nations.  In 2007, the company developed expansion bases in UK.  In 2007, the company was now named by IATA as the ‘world’s largest airline’.  The Company came out with several extraordinary benefits for its customers.

When Ryan Air started its services, it initially was planned for the middle class consumers who were able to travel buy rail and found air tickets a bit expensive.  Such consumers usually did not want expensive and unnecessary services in the air, but were seeking vital services such punctuality and safety.  Although, the company started off with basic services, it has slowly expanded and is now providing even luxurious services to the consumers.  However, Ryan Air is still known for its cost-effective services.  The company over the last 21 years has improved and developed by leaps and bounds. The company tries its best to cut down costs through several measures such as operating efficiencies, removing unnecessary services, etc.

One of the main reasons why Ryan Air has become so popular is because of its low fares concept.  This has been an important theme of the company.  As Ryan Air is offering air services at a fraction of the costs offered by other companies, many people who intent to travel by rail or road, or not travel at all, are shifting over to air.  Customers can also travel one way, and the company would not stress on a two-way flight ticket.  The company offers low rates initially.  As the demand increases and the time of the journey decreases, the costs would go up.  The consumers are free to check the website for tickets.  Consumers can also book the tickets over the phone or over their mobile phones.  One of the largest operational routes of the company has been the London-Dublin route.  Ryan Air came up with several promotional offers for its consumers, including a less than one Euro fare, which was in no way even matching any promotional offer made by its competitors.  Ryan Air also offered the consumers an offer in which, if it found that in case any of its tickets were higher than its opponents, it would immediately lower the prices.  Hence, the consumers were guaranteed that they were travelling by the cheapest airlines in terms of costs.

Another feature with respect to costs offered by Ryan Air was that it provided immediate refunds of the ticket money if the consumer wished to cancel his/her trip.  In case the consumer made a complaint of the airlines, their issues would be settled within a week and they would receive back any amount in case financial issues were involved.

Ryan Air has concentrated its services to non-congested airports.  It flies to secondary airports of several major cities.  The turnaround times are certainly faster, and the delays are reduced.  Besides, airport maintenance costs that the company would have to pay are also lesser.  Initially, the airline companies did not prefer the secondary airports.   However, the Ryan Air strategy has really seemed to be favourable for most of the airlines, and now many companies are looking at the less crowded options.  In this way it is able to operate punctually, which has really been appreciated by the customers. The Association of European Airlines found that Ryan Air was the most punctual airlines in the whole of Europe.  Due to this strategy adopted by Ryan Air, the passengers were more and more confident that they would arrive at the destination on time.

The Company has also a very good safety record.  Not a single major accident has been recorded in the last 21 years of services.  This is because the company follows several safety-training programs, immediately reports any deficiencies in the safety standards immediately and also has in place several safety devices.  However, the company is conducting its safety-training program with the Irish Aviation Authorities and not those in UK and other European nations.  The Company has adopted a policy in which flights would be landing only if there is a minimal of Category IIA criteria. Errors during flight operations would be reported immediately to the safety officers.  Hence, the flight staff would be more responsible for their work at Ryan Air.

Ryan Air has also turned out to be one of the most environmentally friendly airlines in the world.  The aircrafts it purchases are the latest, and they seem to be very fuel efficient, thus decreasing the amount of pollutants emitted into the air.  The company has taken several other operational policies that would ensure that the environment is not destroyed.  The company ensures that all the flights in services are maintained in proper running condition and the emissions are within the standards prescribed.  All the old and fuel consuming aircrafts are removed from the fleet and new ones are pressed into service.  The company spends about 17 billion Euros every year in order to replace the old aircrafts.  The company has heavily invested in the Boeing 737-800 which is a highly fuel efficient aircraft.  Compared to any other aircraft company in Euro, Ryan Air offers to be the most fuel-efficient.  The fuel efficiency of Ryan Air flights has improved drastically over the last ten years.  Ryan Air has adopted certain designs in the winglets, which are helping to lower the noise levels and thus control sound pollution.  As it operates in less congested airports, it does contribute towards not rising the noise levels in the cities.  On of the main and most interesting environmental friendliness features of Ryan Air is that it does not offer complimentary drinks, meals, newspapers and other packages on the flights, which significantly helps to lower generation of wastes and thus contribute towards reducing pollution.  The company feels that the aviation industry should not be taxed heavily for pollution as the air traffic hardly contributes towards air pollution.  An important consideration in this regard would be that air traffic especially contributes towards air and noise pollutions in the cities.  Since, Ryan Air tries to use the decongested airports, it could be considered to be following environmentally friendly measures.  Air traffic contributes towards only 2% of the air pollution, and road traffic contributes more than 9 times compared to air traffic.  Ryan Air feels that the taxes imposed are somewhat disproportionate.

Ryan Air usually uses has several convenient services for the customer.  Ryan Air tries to fly more of directly flights with point-to-point services.  As Europe is a small in size, the operations of Ryan Air do really suit its organizational characteristics.  The customers are offered direct services.  Hence, several other problems such as buying multiple tickets, baggage delays, etc, are avoided.

Ryan Air has very strong operational characteristics and personnel productivity compared to any other airlines.  It has constantly increased the personnel productivity levels.  It has tried to motivate its staff members by awarding them incentives.  Compared to any other airline, Ryan Air is paying more.

Ryan Air is providing very strong support services, which are able to assist people.  It has entered into contracts with several contractors to provide services such as ticketing, baggage transfers, etc.  The company usually enters into long-term contracts, as it would be sure that certain number of passengers would be flying.

Ryan Air is also trying to maintain high standards with regards to quality and safety management.  The aircraft personnel including pilots and cabin crews are of high quality.  The pilots, cabin crews and other staff members are trained thoroughly before actually getting placed into services.  The company has a very strong policy, which means that constant training to the staff members are provided.  The company has not any accident in the last 21 years of services.  The company has contracted specialist contractors for all its maintenance services.  This company would also be taking care of the repair and overhauling of the flights.

Once Ryan Air had made some amount of profit in the UK and the Ireland market, it began to use the same principles and spread to several other counties in Europe.  The company considers that there are still chances for further growth and development.  It plans to increase the number of services on its present routes and start new services in the European market.  It wants to acquire smaller airline companies so that it can grow and expand further.  It also plans to connect various airports within it services.  At present it has a strong base in Europe, and it want to further strengthen the base.  Ryan Air should consider expanding to other continents other than Europe.  At present, the air traffic situation is drastically improving in several Asian countries such as India, China and Malaysia.

The markets are also open for investment.  Ryan Air had a fleet strength of about 87 in 2005 and it is now about 132.  It plans to increase it to 225 in the year 2012.  It plans to acquire new flights by several means such as bank loans, offering guarantees, bank debts, enhanced equipment trust certificates, lease transactions, etc.  The company is finding it costly to purchase the Boeing 237-800’s, but feels that it is needed if it has to stay in the airline market.  The company should also consider investing in the Airbus 380, as many companies have ordered for these jumbo jets. These aircrafts are not only larger in size, but are also fuel-efficient and can carry many more passengers compared to other aircrafts.  The A-380 is suited for a company like Ryan Air.

Ryan Air has started providing supplementary services to the customers if they require.  Some of the services that they provide include beverages, food, internet-related, hotels, airport transfer, Internet services, etc.  One service, which has really caught on, has been the mobile booking services, in which the passengers can actually book his/her ticket through the mobile phone.  The amount spent by Ryan Air on supplementary services is slowly increasing.  Initially, Ryan Air did not want to offer any supplementary services.  However, other airline companies are offering such services, which may be an advantage.  In 2003, about 1.31 % of the revenue was spent on supplementary services, which increased to 1.39 % in 2004.

Thus it can be seen that Ryan Air’s company policy of actually providing cost effective and highly punctual services has actually paid off.  The company has come out with its own charter.  It has not signed the High Airfare charters, which has permitted to bring out lower rates.  The company has also been open to grow and expand.  It has grown several times in the European market.  It should consider expanding into the Asian market, as there is huge potential.  Ryan Air has also been flexible enough to change its operational strategies.  Initially, it did not have supplementary services on the flights.  However, now it has provided supplementary services on its flights as a competitive measure.  Air traffic is going to get better and cheaper for the customers in the future.  Ryan Air should be ready to face these challenges.  It may have to invest more and also acquire smaller aircraft companies.

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