Secondly the Internet, which gave passengers the ability to compare fares online in the cosines of their homes in a better comprehensive manner, and stopped passengers blindness to alternatives. For most of the people it made the vacation a reality, opening up a new world of European day trips. From a new base at London’s Stansted airport, Ryanair lands on major European cities solely using cities’ secondary airports, where landing fees remain low and air-traffic delays are rare if not impossible. Ryanair today is a ‘’monster’’ of borderless Europe with its crowded population and vaguely defined political boundaries.
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But the airline’s success is also a product of O’Leary’s genius. The Dubliner joined Ryanair in 1988 and became chief executive in 1997. He is famous today mostly for his babbly tongue, but his real value is recognized worldwide since he managed to make small business into big player on the market. 1. 1. 1 Ryanair faced a dozen of problems just like all airline business did such as: – Recession that officially started in 2008 with global effects felt in 2009. Recession affected all industries, even the strongest ones, no matter how artificial that impact might.
The unemployment started rising, people spent less and started cutting their cost wherever possible. – Unpredictable fuel prices, mostly driven by supply and demand on which Ryanair has no saying and direct control. Since the fuel price is strictly connected to US dollar per barrel, when dollar drops and demand increases problems start to arise. – Airport charges and government taxes. Even thou Ryanair is using secondary airports to cut charges and turnaround time they are still eligible to certain government taxes and airport increase in charges.
This seriously affects Ryanair since high level regulatory probes and damaging rulings could impact its success. – Passenger compensation has been a great deal for airline companies since European union has strict regulations concerning refund for cancellation, delays and denied boarding. Refunds are usually offered in terms of rerouting, assistance, meals, cars and many other things. Additionally as part of Ryanair relentless campaign, the airline has raised the prospect of charging passengers to use the on-board toilets, and “fining” overweight customer.
These ideas have been kicked into touch, at least for the time being. In an industry that is suffering massively from a drop in demand, Ryanair executives believes it will allow Ryanair to retain its place as the lowest cost, highest profit airline in Europe. Ryanair has been rapped in the past for adding extras to the cost of a flight. – Volcanic ash threats which dramatically affected airline business since all airspace was closed for couple of days impacting not only budgets but rather reputation of the companies. Growth and reduced Yields became major concern for Ryanair because all further investments were benchmarking on increase in passenger traffic. However passenger traffic was dependant on the competition in low-fares airline industry that gave a Ryanair great headache. Over the past couple of years, as other airlines have struggled to cope with high fuel costs, staff obligations and new competition, Ryanair has thrived. The company flew about five million passengers in 1999 and earned $81 million in profit.
By fiscal 2011, it had more than quadrupled its customers and doubled its cash, all in a year when it lost 9,400 flights to the volcanic activities. 1. 1. 2 In order for Ryanair to remain its leader position in low-fares airline industry and to overcome recession problems the alternatives are as follows: – Expand market to southeastern and central Europe. Most of the countries in southeast Europe are not ‘’covered’’ by any type of low budget airline company and even if they are those are actually newborns that need to grow further.
However most of the countries in southeastern Europe have they national carrier and bad economical standrads therefore protecting their national carrier and preventing low-budget fare companies entering the ‘’game’’. – To prevent expansion of other low-fare airline company Ryanair should involve in more aggressive acquisitions to stay on the top or entering alliances which all could benefit from. – Focus more and more on after-sales and increasing revenue from ancillaries, but not overhauling additional services in order to prevent passenger leakages to other alternatives Increase passenger loyalty since now they have really bad reputation. Also introduce refunding extensively and do not violate customer relationship. – Decrease staff and pilots but increase the quality of training in order to have better flight attendant morale and increase retention rate instead of turnover rate. – Reduce turnaround times even more and outsource services on international airports. Also introduce only carry-on luggage, which incrementally reduces costs of fuel and baggage handling on airports. . 1. 3) Recommendation: Ryanair’s success solely rests on two crucial promises: – Provide cheap tickets, as low as a few dollars on some routes, – and always on-time flights. However everything else costs you additionally. Buying a Ryanair ticket is a gamble, it’s a bet between customer and company that the passenger can get through the flight without being too badly ‘’ripped off’’ for extra fees like printing a boarding pass, carrying an extra bag, or an in-flight drink or cup of tea.
Lately it has become clear that in the air, luxury is out. Only low costs and ancillary revenues are in because people want to travel and not pay for it too much. Whether that’s a good thing, for consumers and the airline business alike, is another question entirely. 1. 1. 4) Action Plan: Even the best possible alternative will present challenges when implemented. Please, describe potential issues arising when putting your recommendation in practice and suggest how to tackle those difficulties.
