Low Cost Airlines At Ryanair Commerce Essay

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Indeed, Ryan Air was the first low-cost sustainable in the European market. It is forced to pioneer chairman Michael OLeary of Ryan Air. In fact he took advantage of the American model of the company South West but also the easing of laws on European airports, offering the lowest rates in the market. To do this he must find a strategy on minimizing costs without denying on the safety of passengers. It begins by directly minimizing the personnel board and staff on the ground. To achieve this goal he has found the solution to any subcontract by another company, and luggage, larger aircraft maintenance are not made by the company. Also reservations are made only on the internet or by phone are still outsourced. Then, the planes are all identical which can negotiate the lowest parts. Then, the rotation device is ground because on average there are 30 minutes between the time of landing and taking off again from the plane. As Michael O'Leary said "A plane on the ground plane is expensive". Finally, all services on Ryan air are paying that is either checked baggage or cabin services. However the company did not have a very good media image as client relations are almost nonexistent but were easily attribute the company as a corporation carrying more animals than actual passenger. In this sense, the planes are very primitive with poor sound insulation, there is a maximization of seats on board at the expense of comfort and so do the flights take off that small airports away from the main axes. What exacerbates the problem. That's why Ryan Air is imperative to find new ideas to keep this leading position on the low cost market.

Yet, outside the airline market is changing. Indeed the standard companies prefer to concentrate mainly on long haul flights (more profitable) and therefore neglects the small airports that allows the company to find Ryan air by means of new lines. Then a new form of commerce is taking place, because the local benefits of a reduction in the law and pay the low-cost airlines coming to establish their future lines, thus "Ryan Air is seen offered a contract of 400,000 € per year for a new line in Toulouse (France) (Journal of the World January 12, 2008) because the goal is not to pay a high price for a passenger but generate genuine traffic between 2 airports to enrich communities. Then through the law and the extension of the new U.S. markets open. Also Ryan air to open the primary low-cost transatlantic. However the competition is becoming tougher by the arrival of new low-cost airlines who do not hesitate to employ all means necessary. Furthermore the high fluctuation of fuel and new laws on pollution which undermines the policy of Ryan air is always to offer cheap flights.

At present the strategy of Ryan Air is solid as it continues to offer flights lowest market. But watch for the future because things may develop into disfavor it. Indeed taxes on the environment will be more and more strict and expensive. The fluctuation of oil does not seem to affect operations of the company but certainly it will not last as oil become scarce. The relaxation of legislation on airport development may change and harden again. If it be Ryan Air lose large amounts of venture is returned to endanger. Then the fact that the company is localized mainly on small airports are likely to make default because consumers preferred to pay a little more expensive is to be close to major infrastructure. That is why the company should certainly change strategy in future years and diversify such as by engaging in low-cost cruise or train low-cost.

Question 2 A

Having a strong corporate culture can prevail in the eyes of other companies but also to communicate through it. Indeed for the case of Ryan Air this translates into an aggressive pricing.

The organization of Ryan Air is made of a very hierarchical and results in a very strong organization. Few actually use belonging to a society and therefore so easy to manage over Ryan air being very hierarchical nobody deviates from the single goal that prices always the most attractive market.

However this style of strategy has no real future as other companies entering this field. Consequently Ryan air must all do to find new resources and thus to diversify as the creation of 3 new entity cruise low-cost and low-cost package. However, following this policy, the CEO will probably find it difficult to manage everything with one hand and then have to create secondary companies more or less independently. Or centralized under the same company but in significantly increasing the number of employees in the company.

Question 2 B

If the merger with Aer Lingus fails, it should lead to new strategies.

The first solution would be to offer 2 new flight services such as satellite TV or Internet. These 2 new services would give a new dimension to flight. Indeed would the first company to offer what it would address a new customer, the business men but also young people and teenagers who love to watch television. These new services are like no frills, low cost and would be different enough from other companies. In addition it would generate significant revenues.

Then my second solution would be to develop 2 new entities directly or apart from Ryan air, which offers cruises low-cost or shuttle boat between England and France low cost. Also it would be interesting that it develops for trains. It would thus reach an even wider range of customers but the cost for such a deployment is very important. This just means that it is a risky strategy with a heavy investment.

Finally the third option would be to develop special shuttle business with all you need on board to meet this new client as Internet access included, chain purse or funds in direct opportunity to discuss in small numbers while conducting flight more or less long term. It is a strategy by Hybrid cons should the plane took off and landed at airports large enough.

For me it would be really interesting to emphasize the first option because it is cheap When installing and maintaining a lot but can bring both financial and competitive by being the first European airline to have internet on board.

APPENDICES:

Question 1A

External

Internal

Strengths

First to launch low cost flights in Europe

Aggressive and Innovative leadership (Michael O'Leary)

Has its main operational base in the busiest aviation traffic zones

Lowest fares leading to greater seat occupancy

Increased capacity in new fleets leading to lower fares but higher total plane income

New fleets result in enchanced safety and high fuel efficiency

Single model of aircraft reducing training, maintenance and supervisory costs

Very high market capitalization an operating margins

E-tailing eliminating intermediaries

Aggressive fuel hedging keeping impact of fuel price fluctuation to the minimum

Weaknesses

Continued sustenance of cost-based business operations in a dynamic market

Earns publicity through negative press

Long distances of its airports from city centers can become less attractive as markets mature

Increased seat capacity

Decrease in availability of airport/landing slots

Increasing demand for skilled aircraft personnel

Low level of empathy for employees

Low employee morale

High turnarounds would increase fuel consumption and CO2 emmisions

Opportunities

Mergers/acquisitions could be a way to stretch its operations to popular business routes and leisure destinations

Complete deregulation of aviation industry in all EU

Immense opportunity for Ryanair as its low fares policy will increase movement of job seeker across borders, economic growth

The US-European "open skies"

Increase entrepreneurial activities will be source for economy air travel

Immigration into Europe coud increase due to instability

During any financial dowsturns, the new fleet could be leased out.

Threats

Direct competition with other LCC players in the near future is inevitable

Traditional airlines are also cutting fares

The upper middle-class economy traveller may seek greater value

Limited slot at major airports

Mergers/acquisitions could threaten the existing low cost structures

Impending legislation for environment protection and customer compensations, increase cost

As price differentials for secondary airport

Low fares not stimulate demand fir low leisure travel potential

Low cost Image

Question A 2

Ryan air Cultural Web:

Control System:

- Increased control

- Cost maintains low

- Cost trés Box

- Punishment

- Monitoring the strategy required

Organizational Structure:

- Company very hierarchical

- Collaboration very encouraged

Power Structure:

- Extremely hierarchical

- Pragmatics

- Direct management for better pay

Symbols:

- A unique logo

- Strict dress code in the plane

- No code outside

- Low price

Stories:

- 1 low cost airline viable U.S.

- Founder Michael O'Leary

- Attack of the big airline

Rituals & Routines:

- Compliance Executive

- Prohibition of union

- Many hours (for a low wage)

The Paradigm:

- Cost control

- Low maintenance cost

- Founder Michael O'Leary

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