Strategic Analysis of Ryanair's Position in the European Low-Cost Airline Industry

This strategic analysis explores Ryanair's current position in the European low-cost airline industry, including market analysis, industry reports, and recommendations for future growth.

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Running head: STRATEGIC ANALYSIS OF RYANAIR’S CURRENT POSITION IN THE
EUROPEAN LOW-COST AIRLINE INDUSTRY
STRATEGIC ANALYSIS OF RYANAIR’S CURRENT POSITION IN THE EUROPEAN
LOW-COST AIRLINE INDUSTRY
Name of the University
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Author’s Note

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STRATEGIC ANALYSIS OF RYANAIR’S CURRENT POSITION IN THE EUROPEAN
LOW-COST AIRLINE INDUSTRY
Executive Summary
The players in the aviation industry requires extensive evaluation of their strategic
plans in order cope up with the fluctuating market conditions. Ryanair is one of the reputed
airlines organization in the country of Europe that have penetrated the market with innovative
approach and grab a huge amount of customer base from its rivals within a short span of time.
The objective of the firm was not related to siphoning of customer base from its rivals but in
the past it provided effort in satisfying customers by their service quality and effective
operational management framework of airlines network. It breached the duopoly of Aer
Lingus and British Airways for which the tendency of this companies to form cartel in case of
price negotiation and charging the same services of the airlines at higher price were cut down.
Ryanair took the initiative to put forth that the similar kind of services can be provided to the
customers at cheaper rates. To understand the market scenario and the probable areas through
which scopes for market penetration and service development can be understood from the
company’s perspective is essentially studied and incorporated in this paper. All this are done
after understanding the external and internal environmental analysis through the PESTEL and
SWOT analysis, Ansoff matrix, etc. The paper created a strategic planning endeavour
through which it was been found that the current decline in Ryanair’s business performance is
due to low customer satisfaction, poor customer services, hidden charges, misleading
advertisements regarding fares as well as ambiguous agreements. However, it is been found
that the company can acquire its state of sustained growth through the merger, acquisition,
market development, code sharing as well as sector consolidation along with that significant
hike upon the short distance travellers. This will help the company to achieve the
opportunities available in the market and counter the currency movements, fluctuations in the
fuel prices, competition with the local carriers as well as natural disasters.

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LOW-COST AIRLINE INDUSTRY
Table of Contents
Executive Summary...................................................................................................................1
1.0 Introduction..........................................................................................................................4
1.1 Aim...................................................................................................................................4
1.2 Company Background......................................................................................................4
1.4 Company Vision...............................................................................................................5
1.5 Company Mission............................................................................................................5
2.0 Current Strategic Analysis...................................................................................................5
2.1 Industry Reports...............................................................................................................5
2.3 Market Analysis...............................................................................................................7
2.2. Internal Analysis.............................................................................................................8
2.2.1 SWOT Analysis........................................................................................................9
2.3 External Analysis...........................................................................................................11
2.3.1 PESTEL Analysis....................................................................................................12
3.0 Strategic Group Analysis...................................................................................................14
3.0.1 Comparison of the Competitors in the Aviation Industry.......................................15
3.0.2 Porter Generic strategies.........................................................................................16
4.0 Ansoff Matrix.....................................................................................................................17
5.0 Value chain & Resource based View.................................................................................19
6.0 VRIO Analysis...................................................................................................................22
6.1 Recent Strategic Endeavour...........................................................................................24
7. 0 Recommendations.............................................................................................................24

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8.0 Conclusion..........................................................................................................................25
9.0 References..........................................................................................................................26
10.0 Appendices.......................................................................................................................28
10.1 Porter Five Forces........................................................................................................28
10.2 Business Environment..................................................................................................29
10.3 Value Chain Analysis of Ryanair.................................................................................29
10.4. Resource base value framework of Ryanair................................................................30
10.5. Industry Data...............................................................................................................31

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1.0 Introduction
It is important to delve into the aspect of strategizing a business based on its objective
and the future prospects that it wants to initiate depending upon its existing situation in the
market and the intrinsic capacity of the organization to respond back to the market
fluctuation. Strategic management is an effective tool that supports in understanding the
market scenario and direct an organization with managerial leadership skills to ensure
optimum competitive advantage form the market followed by ensuring its long run industrial
sustainability (Abrate et al. 2016). In fact higher quality of services can be provided which
attracted the customers towards Ryanair and partially snatched a lump sum customer base
from its competitors. Hence, strategizing the business led to effective business performance
of the company. This aspects are investigated in detail within the paper through qualitative
analysis which will help to understand the strength and weakness of the company as well as
will direct towards understanding the probable threats and opportunities available for the
organization to cope up with the market situation.
1.1 Aim
The purpose is to ensure that Ryan Air is able to strategize its business to gain
competitive advantage in the market of Airlines in Europe as well as in the international
sphere.
1.2 Company Background
Ryanair is one of Europe's favourite girl that have its operation with more than 1600
flights Delhi from nearby 72 bases and connecting 192 destinations in 31 countries. Notably
it have nearby 300 flights of new Boeing 737-800 aircrafts. Being one of the Ultra-low cost
carrier in Europe they are being able to minimise the fare of flights for all destinations for the
passengers. It has made the travel by air accessible all kind of people and hence remain open

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LOW-COST AIRLINE INDUSTRY
the new route for tourism in Europe that haven't open before (Abubakar and Dogoji. 2015).
The company was initiated by the Ryan family who share capital of 1 pound and a staff of
nearby 25 by the year 1985. In the year 1986 the company obtained their permission from the
regulatory authorities to challenge the British Airways to break the duopoly in the Dublin
London route. 46 seated turbo BAE 748 aircraft was launched for providing the services.
1.4 Company Vision
To establish itself song in Europe that provides flight services at lowest possible cost
and schedule passenger airline crew the process of continuous businesses expansion and
service improvement.
1.5 Company Mission
To become one profitable low cost airline not only Europe but globally implementing
The Rolling out low fare process and accepting the consumer base based on their quality of
services followed by operating for the benefit of passenger people as well as stakeholders.
2.0 Current Strategic Analysis
To understand the existing situation of the company it is important to delve into the
prevailing condition of the company some of which can be done by adaptive analysis of the
past trends and some of them can be done through the rational analysis. The adaptive analysis
is done through invigorating into the literature and articles that are based upon examining the
past trends that lead to current situation while the rational analysis is done through the
internal and external analysis tools.
2.1 Industry Reports
The major competitors of Ryanair are British Airways, Vueling, Flybe, Aer Lingus,
Virgin airlines, Delta airlines, Easy Jet, Jet Blue, etc. The major brands of the company
Ryanair are Ryanair Sun, Ryanair holidays, Ryanair rooms, Laudamotion and Buzz which is

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LOW-COST AIRLINE INDUSTRY
Ryan air’s subsidiary. Initially the flight service was provided from Dublin to London and the
plane fare was 99 pound, given in less than half a price of that was rendered by British
Airways and Aer Lingus. Since in all the Airways the lowest fare was 209 pound (Caridá and
Bonizio. 2018). Forcibly the British Airways, Easy Jet, Jet2, and Flybe etc. start reduction in
their high prices due to response back to Ryanair that first started the Welfare in Europe in
case of flights at cheaper cost. Industry report suggests that created space for smoother entry
of the firm while beating its existing competitors with respect to the price and quality of
services where similar kind of services or services of a better kind based on the perception of
customers were provided by Ryanair at cheaper cost. This led to easy market penetration and
quick ability to earn potential market capitalization within a short span of time. By 1987 the
company acquired the Jet flights by using three of its BAC1-11 aircrafts from the Romanian
State Airline, Tarom. The aircraft was county arrival full wait list from Tarom that provided
all the pilots and the engineers to operate the aircraft by Ryanair. Due to rapid growth by the
year 2010 it was found that the routes are cost efficient and hence competition that was
initiated between all the three companies aforementioned to accumulate no profit but a loss of
20 million pound. This established the plinth for substantial restructuring and complete the
authorities of the company to invest of father more of 20 million pound in order to sustain in
the competitive market.
Ryanair traverse the path like that of Southwest airline model of low cost fare and
launched their management of aircrafts throughout Europe when challenging the competitive
situation and their Rivals. The strategic endeavour allowed the company to overtake details
by 2000 and launch Europe largest flight booking website. It became the largest passenger
airline in the Dublin London route where internationally scheduled flights for Europe and
Dublin was established. From the Appendix it is been seen that there is a 28 % increase in the
total operating revenue by 2017. However, by half of the fiscal year of 2017, Ryanair have

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LOW-COST AIRLINE INDUSTRY
already generated 74 % of the full revenue that the company have earned in the particular
year. However, in the areas of marketing cost as well as the scheduled revenues it is been
found that by 2018 it is down by 15 % due to airport cost for passengers. The average staff
cost has reduced revenue by 5 % and the airport passenger cost lowered by 7 %. But the
positive point is that in that timeframe Ryanair is able to acquire huge amount of customers
that are interested for low fare travels which raised the consumer base by 26 %. Moreover,
the ancillary revenue account increased by 15 to 17 % within the overall revenue generated.
2.3 Market Analysis
The current scenario analysis reveals the prevailing market situation accordingly as
follows:
 After the Brexit the GBP has depreciated significantly by almost 20% by the financial
year 2017. Ryanair earns a considerable proportion of annual revenues in GBP as
estimation reveals that the amount of GBP/USD that affects the company’s income
for every plane movement is nearby 8 million.
 Depreciation in the GBP affects the financial operation of Ryanair but apart from that
the fluctuation in the fuel prices also affects its profitability and the business model of
the company. Ryanair is operated as low cost carrier and hence it is dependent upon
the fuel prices which if are low then the margin of profitability of Ryanair rises that
helps the company to remain operating. This is the factor upon which Ryanair has
limited control. In the last two years the fuel prices were low which helps the
company to keep their costs low though rise in the fuel price recently due to the geo-
political as well as economic reasons globally have threatened the low cost operating
model of the company.
 Other state-owned and regional carriers like Wizz Air, Easy Jet, Alitalia, Air Berlin,
etc. are rendering competition to Ryanair. The Hungarian low cost carrier, Wizz Air

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LOW-COST AIRLINE INDUSTRY
as well as Easy Jet which is UK based low cost airline is providing tough challenges
to Ryanair. Alitalia and Air Berlin are owned partially by the Abu Dhabi based Etihad
Airways in the aviation industry and are one of the major competitors of Ryanair in
the recent times.
 The strikes in France and shortage in staffs ATC in UK, Germany have restricted the
scheduling of flights in 2018. There is very few ATC provider in Europe as compared
to that of the 37 national providers of ATC in the European Union. The French ATC
on strike for 9 weekends in the peak season of summer foe which thousands of flights
were being cancelled and departure was delayed on various flights of Ryanair.
However, the US operates 18 % fewer flights where the air traffic controller handled
more flights with less delays and no strikes (Miranda, Baltazar and Silva. 2016). The
dismal productivity due to Europe’s air traffic controllers, Ryanair was negatively
impacted.
 Rise in the corporation tax of Ireland as for 12.5 % has affected the profitability of
Ryanair as it is greatly dependent upon the Irish tax. However, it is lower than the
member states of the European Union yet there exists the risks of hike in the tax rates
which will affect the repayment of loans. Such an event will render a sudden adverse
effect upon the revenue earnings and the expected financial position of Ryanair as
well as its cash flows.
2.2. Internal Analysis
The internal environment analysis justifies the factors that are working for the
organization and going against the organization that may hinder the progress of the company
in the market. Hence, to understand the market opportunities available for the company and
the threats that it should get confronted based on its strength and weaknesses can be
incorporated through the SWOT analysis.

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LOW-COST AIRLINE INDUSTRY
2.2.1 SWOT Analysis
The strength, weakness, opportunities and the corresponding threats can be
incorporated as follows:
Strength Weakness
 It sis been established in the
European market by covering more
than 1800 routes and 200
destinations
 Consistent return to shareholders and
strong balance sheet
 Low cost base of Ryanair renders it
competitive advantage
 Operation upon short distance
location with point-to-point flights
 Robust brand name
 Ryan air’s Broad network of
Operation
 High Operating margins
 Economies of Scale due to being the
most low-fare airlines across Europe
 Existing Low Cost Strategy possess
the probabilistic advantage of
providing bigger profits
 Single type fleet of Ryanair keeps
the maintenance cost low as well as
 Change in the arrangements of
employee compensation and the
labor relation may affect the
business of Ryanair
 Aggressive expansion of fleets may
result in the overcapacity challenges
for Ryanair
 Use of Secondary airport too far
from the main city is not appreciated
by the majority of the customers
 Media and news reputation is that
the company provides bad services
which affected its reputation as
electronic media and printed media
circulates such impression globally
 Traditional flights that lacks
innovation
 Deficiency in providing proper
working environment for the
employees by Ryanair for which
employees are less loyal to the

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LOW-COST AIRLINE INDUSTRY
the training cost
 It is the first created budget airline in
Europe
 International operation in countries
like United States of America and
South Africa, etc.
company which causes low
employee retention rate
 Profit is based mainly on seasonality
Opportunities Threats
 Good possibility to enhance the
ancillary revenues through the
process of myRyanair
 Improving the quality of customer
experienced through the “always
getting better (AGB) program”
 Opportunities are available in the
segment of declining charter flights
 Availability of new aircrafts models
provides the opportunity to save cost
on fuel and repairing related
activities
 Use of ancillary products are
increasing which has good market
demand
 Usage of technological advanced
equipment in aircrafts
 Use of high speed internet services
 The weaker GBP after Brexit can
put downwards pressure on the
prices
 Fluctuations in the price of fuel can
affect the business of the company
as well as its profitability
 Other low-cost regional carrier
flights renders challenge in terms of
customer acquisition
 Staff shortages in ATC and strikes in
Europe
 Rise in the corporation tax rates of
Ireland
 Security risk due to terrorism
 Local and EU government
regulations
 Legal issues with the Irish
government and the European

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LOW-COST AIRLINE INDUSTRY
can improve service quality as well
as can boost the level of customer
satisfaction
 Success of “always going better”
program and popularity of the
official websites of Ryanair
 It is the most visited ticket booking
website throughout Europe & for
this reason the website platform of
Ryanair is used for advertisement,
promotion and marketing purpose
which is another source of revenue
earning for the organization
Commission
 Forecasted economic downturn
 Threat of euro exchange rate with
respect to the US dollars
 Competition in the low-cost budget
industry with other rivals like
southwest airlines, virgin America,
JetBlue Airways, etc. at international
sphere
2.3 External Analysis
It is important to conduct an external environment analysis to understand the nature of
the environment upon which the firm is operating. The prevailing conditions provides
provision regarding the spheres from where opportunity can be cracked and also helps to
understand the chips and challenges that are existing majorly around the business
environment of the company. This is a scanning based on the macroeconomic environment
which helps to identify the factors that impacts upon the organisational success and helps to
focus upon the industrial competition that is existing with the company and against the
company. Public this comprises of various uncontrollable factors that influence the
organisational decision making and affects its performance and strategies significantly. This
can be understood through scrutinizing the political social economical technological

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LOW-COST AIRLINE INDUSTRY
environmental and legal forces in the PESTEL analysis (Dennis. 2017). It was a clear
understanding of the gene an environment that is externally present around the company and
helps to realise the risk factors that a big associated with the company and hindering the
market growth or are influential factors in declining the company's performance. The next
stage of this external environment analysis is to assess the industrial environment since it is a
crucial aspect of concern to fulfil the aim of the company and identify the factors that could
contribute or affect the industrial profitability. Porter's five force analysis is the boundary that
helps to develop techniques understanding the factors that affect the profitability pics of the
constitution the intensity of competitive test the existing attractiveness of the industry by the
consumer base. This person saves to understand the dynamic features of the industry the
complete external macro factors that affect the company in particular.
2.3.1 PESTEL Analysis
2.3.1.1 Political
The political factor of the European Union is a crucial aspect of concepts it provides
policies that affect the direction and ways of strategic planning in case of Ryanair. Notably
the enlargement is found to be positive as it increases the flow of migration and thus
increases in return the number of passengers within the flights that every company runs
annually (Mayer, Ryley and Gillingwater. 2015). Moreover, good relationship with the
political authority is held the year basis to be paid a tight security system that provide safety
to the passengers and hence there is possibility of cost mitigation if all these aspects are
regularly monitored & maintained.
2.3.1.2 Economic
The unstable fuel price affects the operating cost of the company and hence the price
of the airline tickets fluctuates. Rise in the fuel prices in hands is the operating cost and hence
not only pushes the prices of rights but also affects the company's growth and profitability in

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LOW-COST AIRLINE INDUSTRY
case of Ryanair. This is the biggest existing challenge economic perspectives since Ryanair
have their objective to run the flights at cheaper cost (Reisinger, M., 2018). Downfall in the
exchange price in the US dollars affects the availability of official substitute in the transport
methods. Along with that, distribution cost from customers that have adopted for online
checking-ins are factors that has higher influence upon the economic aspect of the company.
2.3.1.3 Social
In the social sphere prospective development is important as it influence the lifestyle
of passengers. With the Hitler's weight of the European Union it has been found that there is
a increase the number of people moving from region to region for work purpose or for
educational purpose, for graduations or for back papers as well as for leisure or tourism. This
European Union expansion has affected the provider of this is to extract white demographic
reason and ensure progress of Ryanair within a short span of time. This is due to the reason
the capacity of Idea and affected due to increase in the operating market role of market
segmentation the challenges to maintain the level of productivity at low fare cost. Low fare
however encouraged passengers to travel frequently as there is existence of demand in the
market.
2.3.1.4 Technological
The technological aspects challenges the companies will be in the long run as there is
regular up gradation in technology as well as there is high did not demand for air tickets since
Friday provides them at lower cost at a moderate quality that is acceptable by the mass.
Hence, the company have to take from party agents in case of online booking and cover of
the excess demand in the market and acquire those prospective clients that they go to their
competitors in times of peak hours. Ryanair reduced cost to provide discount to changes
attribute competitive in the aviation industry (BBC News. 2019). It acknowledged that to
keep the cost down as well as to attract customers complementary activities like availability

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LOW-COST AIRLINE INDUSTRY
of satellite television internet service and many other ancillary activities are provided to
enhance the revenue as well as maximize sales.
2.3.1.5 Environmental
The environmental factors is inclusive of noise level controls, greenhouse gas effects,
global warming corporate social responsibility policies where are these activities are
monitored based on the environmental protection laws. Everything support that the company
implement starting policies to reduce pollution as well as strategize their business endeavours
in an environmentally friendly way (Pels, Njegovan and Behrens. 2017). The copper is found
to degrees bad publicity it have added towards the practice of sustainability and high
performance.
2.3.1.6 Legal
The legal factors and inclusive of the company's image and its reputation towards is
consumer base. Buy August 2003 it was been found that the company ceased it's operation at
Strasbourg due to losing a court case that was brought forward by Air France. However, after
the European Union has revised new rules to, overbooking that resulted boarding of
passenger in the airlines it was found that the central London country court has withdrew
other charged cases against Ryanair.
3.0 Strategic Group Analysis
The strategic group analysis of Ryanair, Easy Jet, Aer Lingus, etc. are in the same
strategic group as they compete closely. The critical success factors (CSFs) on this regard are
its strategic focus of operating upon lowest prices as well as being reliable within the industry
for its punctuality. The other factor are its frequent availability of services. The risk factor on
the other hand is related to bad quality of foods and availability of uncomfortable seats for
which the company faces customer dissatisfaction regarding its quality of services. Ryanair

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has positioned itself as a low fare segment and possess least customer experience among the
budgeted airlines. The market segments have its rivalries as well as challenges in establishing
their services in large geographical areas that includes operation in the main airports as the
network of Ryanair is limited to the low cost secondary airports with smaller geographical
areas.
3.0.1 Comparison of the Competitors in the Aviation Industry
The market capitalization in terms of proportion of revenue earned can be reflected in
the aforementioned diagram. This reflect the market share by the 2015-16 financial year. The
data incorporates the amount of profitability of the firms in the aviation industry. However in
terms of acquisition of consumer base Ryanair is still in an effective position by the financial
year of 2015-16 and the future growth of the firm can be incorporated s a forecast as follows:

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LOW-COST AIRLINE INDUSTRY
It has been found that the competitive firms of Ryanair are able to acquire greater amount
of profitable share in the market and revenue maximization strategy due to satisfying them by
their quality of services, few delays and effective customer support. However, Ryanair should
understand that to acquire cream customers only low cost fare is not everything rather the
customer should be satisfied from all respect in order to keep them brand loyal towards the
company.
3.0.2 Porter Generic strategies
The strategies was given by Michael porter during the 1980s analysis of which will
lead to achievement of sustainable competitive advantage gaining over the rivals. The
following three factors are being reflected on this regard as follows:

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LOW-COST AIRLINE INDUSTRY
3.0.2.1 Cost Leadership
Since Ryanair is one of the leader in the low cost market for which it gains from
offering cheaper deals in terms of fare and other complementary services. Demand gets
stimulated due to the practice of low fare deals by Ryanair based on one way pricing
method. People of fare conscious leisure becomes brand loyal to Ryan air which ensure
its initial acquisition of customers but cannot retain them in the long run due to poor
quality of services.
3.0.2.2 Differentiation
Differentiation strategy helps Ryanair to concentrate upon its quality, timeliness,
safety & quality separately that helps it to generate revenue with better margin. Creating
unique fields of interest for the clients are the trump cards of Ryanair which distinguish it
from others in the customer’s perceptions (Delaplace and Dobruszkes. 2015). Achieving
better punctuality, few loss of baggage, fewer cancellations, reduced turnaround time
flights, etc. are the distinguishing services for which it have a competitive market
advantage.
3.0.2.3 Niche Strategy
The focus strategy or “Niche” strategy helps the organization to reduce the waste of
cost and time in unnecessary segments and allow it to focus upon particular strategy at a
time followed by incurring reasonable cost. Aircraft fleets of Boeing 737-800 that are 11
to 17 years old are being purchased by Ryanair that focuses upon availability of trained
staffs on board and less training necessities.
The strategic group analysis reveals that Ryanair company have a continuous traffic
growth as it focuses upon those people who are desperate for low fare travelling in flights
and but has no separate segment for people that may prefer luxury services.

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4.0 Ansoff Matrix
The Ansoff matrix can be incorporated as follows:
Ansoff Matrix New Market Existing Market
New Product
Diversification Product Development
To implement this strategy
Ryanair can include the
creation of new services like
building hotels, restaurants
or resorts for supporting new
pull of acquired customer
base that will also attract
the existing customers base
When the demand for
existing product declines
then this strategy is applied.
Existing Product
Market Development Market Penetration
To implement this strategy
Ryanair might opt for going
to different country and
provide the existing services
to prospective customers
and acquire new potential
clients as well as new
consumer base as a
consequence.
Persuading the existing
customers towards
generation greater amount of
revenue through the
incorporation of bonus,
family travel facilities,
discounts, etc.
In addition to attract huge customer base they offered complimentary booking
opportunities to become the low cost value and provided the passengers with car hire, Hotel

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LOW-COST AIRLINE INDUSTRY
accommodation, travel insurance as well as Railway services. By the year 2020 the company
can again regain its position and become one of the most popular real life as well as in the
web page of Google. It has been found that why there was the most search airline in the
websites of travel and tourism. Notably, Ryanair can opt for market development that will be
the right strategy at this point of time as this will help to increase the profit. Bangladesh can
be the market for future acquisition by Ryanair. There people use to fly at different location
inclusive of locations in Middle East as well as Europe (Alamdari and Fagan. 2017). This
will enable them to take their existing services in a foreign country where cheapest fare
strategy as opted by Ryanair in general will be highly appreciated. There are very few flights
directly operated between USA and Bangladesh and hence opportunity can be utilized by
Ryanair as an effective tool for raising profitability as well as business expansion.
5.0 Value chain & Resource based View
The process of value chain analysis is an endeavour to understand the resource based
view of the organization in terms of its available resources and ways to capitalize them
optimally. Mainly the value chain analysis is of two folds one of which is the primary
activities and the other is the secondary activities or support activities. Based on the
macroeconomic environment and the industry analysis it can be seen that the sequence of
activities are crucial aspect of concern since they triggers the core competencies of the firm
and capitalize them to maximize the firm’s objective. Inbound logistics, operations,
marketing/ sales, service quality, outbound logistics, etc. are primary activities that converts
the raw materials into benefits for customers. While the support activities contribute for the
procurement, development, technology, human resource management and infrastructural
development for the company.
Inbound Logistics: Based on the value chain of Ryanair, the company focuses upon adopting
cost leadership strategy as it leads it in gaining competitive advantage in the aviation

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LOW-COST AIRLINE INDUSTRY
industry. Sourcing materials from suppliers that can supply raw resources at cheaper rates as
compare to the price at what these are been given to others. Except Dublin airport, Ryanair is
able to land in small airports that are located outside the city in major places and due to this
reason they are able to avoid the premium rates that other airlines have to acquire by
incurring greater rates for ground services or landing fees. This strategy helps the company to
over the flight prices at cheaper rates to the consumers as they incur less amount of cost.
Ryanair is also able to build a strong relationship with that of the airplane manufacturer like
the suppliers of Boeing and Jet fuel so that the deliveries are made within the stipulated time
and the efficiency level as required gets achieved.
Operations: The objective of Ryanair is to keep the low pricing strategy intact as it is the
main point of attraction of the customers towards Ryanair. Along with maintaining that the
company is able to operate in an efficient manner through various endeavours as for example
strategizing their business through automated ticket booking system. This makes Ryanair
capable of offering on-board meals and entertainment activities without hiring a lot of staffs.
Moreover, customers can reserve, check or book their own tickets as per their requirement in
user friendly platforms without much involvement of other entities.
Outbound Logistics: Ryanair prefer to depend upon its own website rather than third parties
for selling of their tickets to prospective consumers. This direct marketing approach helps the
company to not to incur any commissions that would have been required to be paid to the
travel agents and hence the cost of the tickets remains low for the customers to purchase and
along with that Ryanair is able to maintain a credible website through which the selling of
tickets remains in process in case of flight booking or any other queries. Furthermore,
Ryanair is able to maintain the strategic endeavour of short turnaround time (TAT) as per
which the company ensures that its planes are in the air in most of time and hence the cost
gets reduced significantly.

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LOW-COST AIRLINE INDUSTRY
Services: The key in this case for Ryanair is that they are focused upon maintaining an
effective schedules for the flights so that they will be able to ensure that most of the airplanes
remains in the air. This will simultaneously reduce the cost due to less landing fees and
ground service charges as the flights landed less amount of time and along with that the
customers will be pleased as they will have to spend less amount of time in the waiting halls
before departure of the flights.
Supporting Services: Complementary activities apart from the flight service are being
provided by Ryanair like baggage handling services, travel support, hotel, restaurant booking
discounts, etc. thus no extra time is wasted from the customer end and they rather appreciate
such endeavours to support the customers by Ryanair apart from flight services. Also Ryanair
ensures that the crew members, check-in staffs, pilots, etc. are well trained so that the
satisfaction of the customers do not get comprised at any cost.
The distinctiveness that helps the company to render superior performance can be
understood by analysing the capabilities of the organization since it provides the framework
for gaining significant insights that helps to quantify why few of the companies are more
profitable than others. In case of Ryanair this correspondents to the organizational
capabilities and the intangible and tangible resources. The tangible resources consist of the
physical resources and the financial assets that creates value of the customers.
Physical Resources: In case of Ryanair this is comprises of the machines used, location, the
capacity of production, etc. that contributes in the operation of the firms.196 Boeing aircrafts,
headquarter office, secondary airports and their maintenance in 33 countries and more than
127 destinations is the evidences that supports the fact that the company is able to operate
globally since it possesses a large distributional network of flight destinations.

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LOW-COST AIRLINE INDUSTRY
Financial Resources: Ryanair’s investments, debt, equity, borrowing capacities, cash
accounts and capital, etc. are the financial resources of the company. The capital invested for
the progress of the firm comes from the Ryan family, its debtors, shareholders, discount from
the governments, creditors and also from the airports.
Technological Resources: Implementing innovative approach in the production process,
patents, trademarks, copyrights are inclusive of the technological resources. Ryanair has
incorporated online booking system for its passengers and also compensation are being
provided to the customers in case of flight cancellation, denied boarding as well as in case of
delays.
Intangible Resources: Apart from the physical resources of Ryanair, its reputation,
knowledge and information that are being acquired overtimes becomes much difficult for the
rivals to imitate and it becomes an unique resource of the organization that can be encash in
the future for the betterment of Ryanair. This also includes the experience of the employees,
capability and true effectiveness of the teams as well as the managerial leadership skills.
Other than that the brand name of Ryanair, reputation among the suppliers along with
customer reliability are another key factors that adds value to the organization as intangible
resources.
For Ryan air there exists threats to substitute as well as threats from new entrant firms
due to competitive rivalry. However, on time flight departure, availability of seats for all
passengers, appropriate safety measures, presence of minimum staffing levels, secure
baggage handling and cheap air fares, after sales service, entertainment on board, loyalty
benefit schemes, reclining seats and extra leg rooms are the differentiating factors based on
the available resources and the value chain that it can create for business progress in the
market (Caputo, Borbély and Dabić. 2018).

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LOW-COST AIRLINE INDUSTRY
6.0 VRIO Analysis
The core competence of the company is been developed based on the capabilities and
the resources available for Ryanair that helps it to earn competitive advantage in the aviation
industry. The VRIO analysis incorporates the justification regarding how the available
resources can be utilized optimally to ensure that they can be translated into competitive
advantage.
Value Rareness
 Available resources can be deployed
to meet the needs and requirements
of the customers
 Combining with the airport charge
reduction, government subsidies and
low price business model, Ryanair is
able to provide lowest fight
travelling cost that attracts millions
of customers
 Airport charge reduction and
government subsidies are available
for Ryanair due to its short-haul
budget airline business objective
 The direct and one of the strongest
competitors that closely belongs to
the same strategic group is Easy Jet
that lacks these resources
 For Ryanair, airport charge
reduction and government subsidies
are there because of its support to
the secondary airports to attract
more amount of customers among
which a lot of people are tourists
which helps the local government to
generate huge amount of revenues
Imitability Organization
 Unlike other airlines, Ryanair  Optimal utilization of the resources

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LOW-COST AIRLINE INDUSTRY
possess a good cost advantage due to
its resources and capabilities to
implement a low cost business
framework
 Consequently its resources are hardy
imitable or transferrable
 Low probability to imitate the cost
leadership strategy of Ryanair
and capabilities helps Ryanair to
deliver the services at the lowest
possible cost and at lowest possible
price in the competitive marketplace.
 Effective CEO initiative and
presence of strong management team
efforts maximizes the strategic
endeavour of deploying resources
that will help the company to earn
competitive advantage
6.1 Recent Strategic Endeavour
The recent strategic endeavours of Ryanair comprised of its merger formation of
Laudamotion in the year 2018. After approval from the European Union commission,
Ryanair have taken a share of 75 % stake of Laudamotion which is an Austria based airline
company for an exchange of $62 million. The objective for such merger formation is to
establish the company Laudamotion as the Austrian airlines that provides the cheapest fare
for both the scheduled and the charter markets.
7. 0 Recommendations
The following strategic plans can be recommended for Ryanair:
 Deterministic strategic positioning and effective market development
 Efficient management of the firm’s resource portfolio
 Exploitation or maintenance of core competences.
 Development of human and social capital

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 Redesigning the organizational culture towards sustainable practices that raises the
brand value
 Improving the customer perception regarding Ryanair
 Improving the currency trading and the oil hedging strategies
 Expanding in the Eastern Europe as well as North African countries
 Succession planning followed by market penetration plans and forming strategic
alliance with Aer Lingus in already operated markets
8.0 Conclusion
Ryanair should focus on implementing their business by eradicating the challenges
that they are currently facing due to their poor quality of foods and uncomfortable seats.
Their way of operation two decades before were noteworthy due to good quality of services
that were available at cheaper prices. The same strategy should be not only planned but also
implemented as soon as possible to ensure that the market capitalization of the company do
not fall and the acquisition of prospective clients prevails through market development. The
satisfaction levels of the existing consumer base will be withheld by their same strategy of
focusing on specific success parameters and not upon the entire market. The notion of the
company as deployed by media or due to other mismanagement of the company as found to
occur should be extensively taken care of through anticipating customer needs and
responding back to them effectively. The company should focused upon differentiation of
their products and services as discussed along with their cost leadership strategy. Not only
revenue generation and acquisition of clients that are interested for cheap fare flights should
not only be the focus of the company rather the company should also focus upon improving
the brand loyalty of the customers followed by raising the employee morale and the
organizational culture as a whole.

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9.0 References
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the firm: evidence from Ryanair. Journal of Knowledge Management.
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Financials.morningstar.com. (2019). Balance Sheet for Ryanair Holdings PLC ADR (RYAAY)
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10.0 Appendices
10.1 Porter Five Forces
Porter's five force analysis is an analytical tool that helps to analyse the competitive
environment in case of Ryanair.

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10.2 Business Environment
10.3 Value Chain Analysis of Ryanair

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10.4. Resource base value framework of Ryanair

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10.5. Industry Data

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