Ryanair A Essay

1551 words - 7 pages

|
Dogfight over Europe: Ryanair (A) |
Case Analysis |
MGMT 480 BUSINESS PLANNING AND STRATEGYDR. Ayman Ismail DR. Iman Seoudi |
Farah Amin |
10/22/2015 |

I. External Environment Analysis
A. PESTEL Trends Analysis
Political and Legal:
Deregulation of airline industry in the late 1970s.
In the 1970s there was a general trend to deregulate the airline industry which had previously been mainly controlled by governments. So each government set fares rates, routes, customer service policies, entry and exit, intercarrier agreements, mergers, and consumer issues for its flag carriers as well as private businesses. However, in 1978, the US airline industry became partially ...view middle of the document...

Social
Irish Immigrants in the UK
In the 1970s many Irish immigrants lived in the United Kingdom and would travel back to Ireland for their families during the holidays. As a result of this social trend, demand for air travel increased.
Tourism
There was an increased demand on air travel especially among Irish and British vacationers who were looking to travel to the North Sea for sunnier weather. This social trend increased demand on air travel and made charter airlines especially popular among those tourists for their promotional fares and reduced air travel prices.
Technological
Introduction of wide-bodied aircrafts in the 1970s
In the 1970s the Boeing 747 was introduced. This wide bodied aircraft increased capacity of passengers per aircraft which finally lead to an increased capacity on the North Atlantic route.
Computerized Reservations in the 1980s
Computerized reservation trend appeared in the 1980s and for many airline companies, it contributes with huge percentages to their revenues. For example, for British Airways, computerized reservations comprised 84% of their revenues. Also, independent travel agents were able to book tickets for their clients through computerized reservation systems including the British Airways’ own system.
B. Industry Analysis and Competitor Analysis
1. Porter’s Five Forces Model
Existing Rivalry
The low cost carriers market has an intense competition. However, Ryanair enjoys a low level of existing rivalry because its two main competitors, Wizz Air and EazyJet do not serve the same routes as Ryanair. However, if those airlines decided to serve the same routes, there will be a heavy pressure on Ryanair’s profitability as it will have to pressure prices and margins downward, since its main differentiating factor is price4.
Bargaining Power of Suppliers
Ryanair’s main supplier is Boeing. And other than Boeing it has only one option for a supplier which is Airbus. Also, Ryanair’s switching costs are high because if it switches suppliers it will have to retrain all the mechanics and the pilots. Also, the cost of jet fuel affects the price aviation. However, Ryanair uses hedging to control the variability in oil prices. Big airports, where Ryanair’s competitors operate, have greater bargaining power, so Ryanair’s policy is to avoid them4.
Bargaining Power of Buyers
From the buyers’ side, switching costs are not high since all airline tickets are now available online, so it’s a simple and inexpensive process. They are also price sensitive, so they will go to whoever supplier who offers them the lowest price4.
Threats of New Entrants
The airline industry has some barriers to entry. For example, a high capital investment is required. Further, airports have restricted slot availability, so it is difficult for airline companies to find suitable airports. Also, flight authorizations and obtaining licenses are difficult to get4.
Threats of Substitutes
Passengers can use other modes of...

Other Essays Like Ryanair a

Case Study Ryanair---the Low-Fares Airline

5325 words - 22 pages Threats 2 3 Strategic Choices 2 4 Evaluation of Strategies 2 4.1 Suitability 2 4.2 Acceptability 2 5 Conclusion 2 Reference: 2 1. Introduction Ryanair is a very famous budget airline company in Europe which was set up in 1985 by Ryan family. It mainly focuses on supplying scheduled passenger airline and low price services. Ryanair provided full services traditional airline with two classes of seating and three types of

Starbucks Case Harvard Essay

2341 words - 10 pages COMPETITIVO ESCENARIO Poder de negociación de los Clientes: Ryanair ha decidido finalmente ingresar al mercado interno que ofrece la ruta Dublin-Londres. Como consecuencia de la inclusión de una aerolínea adicional a este mercado, resultará inevitable un aumento en la competencia, que se traducirá en bajas de precio a favor del consumidor (Ryanair oferta sus vuelos sin restricciones a un precio de penetración un 52% menor que los que

Employees Come first at High-flying Company

1265 words - 6 pages O’Leary himself concedes that many aspects of the model that has made Ryanair such a success story in European aviation – able to challenge such established carriers such as British Airways, Lufthansa, Air France-KLM and Alitalia in their own backyards – were copied directly from Southwest Airlines. For example, both companies: B sell tickets directly to the customer, mostly over the internet, cutting out commission to travel agents; price their

Research Project Terrorism

2090 words - 9 pages The most important accounting statements not just for Ryanair and EasyJet but for all companies are profit and loss statements. Those statements are showing to the companies how many sales they have generated over a period of time and what expenses they have incurred. That’s why they need to know what are their direct and indirect costs and also fixed and variable cost and also what they mean and I will be talking about those in my essay

Easyjet- Resource Allocation And Analysis

2809 words - 12 pages attributed to the minor differences in customer base. Most travellers flying BA are interested in the service and comfort aspect of the flight, which includes such services as being sold a ticket face-to-face. As opposed to this, EasyJet and Ryanair seem to focus more on consumers who are likely to want to get the buying process out of the way quickly and efficiently.Neither EasyJet nor Ryanair require membership of any kind to book online

Airbus vs Boeing

904 words - 4 pages Airbus Vs Boeing Nov 2014 1 I. Airbus Airbus has been created because the French, German and British governments wanted to launch a European aeronautics program to compete with American companies such as Boeing, McDonnell Douglas or Lockheed. In 1970, l’Aérospatiale and Deutsche Airbus make a consortium. In 1971, the Spanish C.A.S.A join them, followed in 1979 by British Aerospace. At that moment, the German and the French

Cfr--Easyjet- the ‘Easy’ Ways to Succeed

1405 words - 6 pages differentiating strategies adopted by Easyjet. How far do you think they are sustainable in the long run in the context of its immediate rival and the dynamic external environment? Answer: We know that EasyJet became a successful airline but analysts wondered how long they would last, because the pricing factors. Analysts also said Easyjet’s price were around 60 to 70 percent higher than those of Ryanair. Easyjet’s earnings are based on pricing ,so if the

Easyjet Case Study

2092 words - 9 pages a high profit margin. It is also due to the low assets of Virgin, Go and Ryanair in proportion to their turnover. In what is expected to be an asset intensive industry, these firms show a low proportion of assets which may be a result of leasing aircraft, though details are not given.The principle strength that the carriers have built and that is highlighted by Porter's model is the use made of regional airports. The hub and spoke model is

Aer Lingus

4232 words - 17 pages Lingus has progressed over the last 10 years and how the new focus today is for an ever expansion of its long haul flights. 3. What differs Aer Lingus to other airlines? * Qualitative we have a look at the service levels that make this airline unique. * Secondary Data shows who Aer Lingus is partnered with to connect Ireland with the rest of the world. * Strategy specifies why Aer Lingus cannot be a Ryanair. * Routes

Airline industry pre post 911

1678 words - 7 pages yields, with increasing costs and striving for a net profit as low as 1 or 2%. c) The power of buyers: With competition so strong in the industry – buyers (customers) had a wealth of options to choose from, especially as LCC’s such as SouthWest Airlines, RyanAir and Westjet provided fares at much lower rates than the traditional FSC. d) The power of suppliers: With fuel being an essential element of the airline industry, suppliers

Quality Management and Strategic Success

1006 words - 5 pages often involve calculating the opportunity cost of using scarce production capacity to repair defective output, and the discussion parts of the same questions often require candidates to elaborate on the highly negative consequences for a company’s image and goodwill if its customers experience external failure in its products or services. However, this conventional wisdom appears to conflict with an important observed commercial phenomenon

Related Papers

Ryanair Report

1899 words - 8 pages a young entrepreneur by thename of Michael O'Leary. It now claims to sell over 90% of its tickets onlineand is Europe's most successful airline. During the first six months of this year itmade profits of over 128M which was more than the whole year of 2001 inwhich Ryanair was one of the very few airlines to made a profit after theSeptember 11th attacks. Today Ryanair is a fast moving airline which seems togrow in stature weekly and distance

Dogfight Over Europe : Ryanair Essay

638 words - 3 pages service to its passengers.2. Ryanair's 4 daily flights provide much flexibility to the travelers who could travel at their time of convenience in a day.3. Ryanair's usage of 44-seater turboprop would greatly enhance its occupancy rate and at the same time, cost Ryanair much less to operate when compared to BA's operational cost since BA used bigger capacity planes for this route (67% occupancy).Ryanair will not make money at the IP 98 fare

Ryanair Swot Analysis

710 words - 3 pages | |STRENGTHS |WEAKENESS | | |1. First to launch low cost flights in Europe and maintained a low fare |1. Earns publicity through negative press

Lufthansa And Ryanair Strategy Essay

1256 words - 6 pages * Corporate profile Lufthansa is a true dinosaur of aviation, which took its beginning in a distant year of 1926, as a result of a merger between Deutsche Aero Lloyd (DAL) and Junkers Luftverkehr, inheriting its crane logo and blue-and-yellow house colours from them respectively. It launched its first scheduled flights with a fleet of 162 aircrafts of 18 different types, showing its adventurous spirit and ambition via a flying expedition to