Lecture Outline The Story of Ryanair The Marketing Strategy of Ryanair. The Leadership in Ryanair YouTube and Ryanair How can Ryanair remain innovative and maintain competitive advantage?
Ryanair Started in 1985 Currently in 26 European countries, 694 routes 133 aircraft Employs 1400 people, flies 52 million passengers, 80% passenger loading on aircraft 5 main bases-Stansted (London), Charleroi (Brussels), Marseilles, Madrid, Bremen
Ryanair 2007 Report Traffic Grew by 22% Cash held-E2.2 Billion 153 new routes
Pre 1990 Airline Industry Little chance of new entrants High ticket prices Limited availability of purchasing tickets- Travel Agents, Airports Limited choice of departure airports No choice of airline
The Airline Environment-pre 1990 No aggressive competition Sharing Routes Fixing Prices Dominated by a few global players Government intervention Generally aimed at the business flyer
Pre-1990 Airline Industry Dominated by big national airlines Cartels Route Monopoly
1990s-change in the environment Privatisation Deregulation Relatively free market More choice for the consumer!!
Birth of the Low Cost Airline On-Line Booking No Seat Reservation Pay for Seat only Led to: Entrance of new players-Go, Wizzair, Easyjet and Ryanair
The No Frills Industry-2009 60 across Europe Easyjet, Ryanair, BMI Baby (U.K.) Air Berlin, Germania Express (Germany) Wizzair (Poland & Hungary) Air One, Volare (Italy) 2007 22.7% growth in seats
Understanding the environment Very important because it is changing all the time!!! Customers Competitors Government Economic factors Social factors
The airline environment now More competitive Lower Prices Alliances between big players Emphasis on short-haul due to decline on long-haul Increase in low cost carriers Many airlines copying low cost model-e- booking
What is strategy? A means of achieving an objective Aims to transform corporate objectives in to a competitive market position Is about SEGMENTING markets and DIFFERENTIATING products from the competition
Why is it difficult to develop a strategy? Requires a good understanding of where you are now-your BUSINESS POSITION Requires an ability to motivate the whole business-ability to CHANGE There has to be a VISION-where do we want to be?
Basic strategy options- Michael Porter Cost Leadership- using strength to negotiate lower prices from suppliers Focus- specialising in marketing to specific market niches/segments Differentiation- being different to competitors, offering more value to customers How does Ryanair use these?
Ryanairs Competitive Advantage Low Cost Aircraft at a discount Low cost airports Fast turnarounds No travel agents Short routes
Ryanairs Competitive advantage Focus Infrequent flyers/holidaymakers Specific cities in Europe Consumers only Small destination and departure airports
Ryanairs Competitive advantage Differentiation On line booking Easy boarding Cheap prices Access to other services-Hire cars Aggressive advertising and promotion
The Competitive Environment More competition but can the big airlines – British Airways, Air France, really compete? Impact of EU legislation against subsidies from airports (Charleroi) Environmental Issues Fuel prices and availability The Credit Crunch
A Maverick. Is Ryanair a maverick player? Does not conform Unpredictable Mean Tough Ruthless Michael OLeary-Ryanair Chief Executive
Ryanair- Controversy, Publicity, No Compromise- The Price is the Cheapest!!! http://www.youtube.com/watch?v=9wGkbzOk3 Jc&feature=related http://www.youtube.com/watch?v=CgA0DkuIA CU&NR=1 http://news.bbc.co.uk/2/hi/business/7914542.st m
Ryanair- using social sites to promote themselves as a young, fun airline http://www.youtube.com/watch?v=A8d2fmkQ DXU&feature=related http://www.youtube.com/watch?v=A8d2fmkQ DXU&feature=related
The future for Ryanair Merger with Aer Lingus?-might not be allowed as creating a monopoly Transatlantic Flights?- 20 euros to U.S.A. Purchase of U.K. Airport?- possibly Gatwick Looking to maximise revenue-fat people pay more?!!!
Conclusions Ryanair has changed Air Travel for all of us Are we prepared to accept extra charges as long as the price is low? In a very important industry, can non- nationalist airlines survive?
Thank you Thank you very much for your attention Mike Ward-M.F.Ward@salford.ac.uk