Ohiggins Ryanair Case Study

CASE STUDYRyanair: the low fares airline – future destinations?Eleanor O’HigginsThe case focuses on the analysis of the airline industry environment, the internal resources/capabilities of Ryanairand the concept of sustainable competitive advantage. The case illustrates how a strategy that is grounded in theefficient deployment of assets/resources/competencies, whilst adding perceived value to customers, delivers asustainable strategic advantage. The case also illustrates the difficulties and obstacles that stand in the way ofachieving and retaining such advantage through changing circumstances.a a afive years to 2009 was the most profitable airline in theworld, according to Air Transportmagazine.Despite this apparent success, Ryanair faced issues. The most pressing, shared by all airlines, was an industrythat was ‘structurally sick’ and ‘in intensive care’,iiwithplunging demand in the global economic recession anduncertainty about oil prices. What strategy should Ryanairuse to weather this storm? Would the crisis produce a longterm change in industry structure? Could Ryanair takeadvantage of the situation as it had in the past, by growingwhen others were cutting back? A predicament of its ownmaking was Ryanair’s 29.8 per cent shareholding in AerLingus, the Irish national carrier, following an abortivetakeover attempt. Aer Lingus’ flagging share price hadnecessitated drastic write-downs, which had draggedRyanair into its first ever losses in 2009.Overview of RyanairIn 2009, Ryanair had 33 bases and over 850 routes across26 countries, connecting 147 destinations. It operated afleet of 199 new Boeing 737–800 aircraft with firm ordersfor a further 112. It employed over 7000 people and wasexpected to carry approximately 67 million passengers in2010.Ryanair was founded in 1985 by the Tony Ryan familyto provide scheduled passenger services between Irelandand the UK, as an alternative to the state monopoly airline,Aer Lingus. Initially, Ryanair was a full service conventionalairline, with two classes of seating, leasing three differenttypes of aircraft. Despite growth in passenger volumes, bythe end of 1990 the company had faced many problems,disposing of five chief executives, and accumulating lossesThere is only one thing in the world worse than being talkedabout, and that is not being talked about.This is a quote from a novel by Oscar Wilde but it could be the mantra of budget airline Ryanair, Europe’s largestcarrier by passenger numbers and market capitalisation in2009. The airline is often controversial, whether it was byannoying the Queen of Spain by using her picture withoutpermission, or announcing plans to charge passengers touse toilets on its flights, or engaging in high-profile battleswith the European Commission. Ryanair also made newswith its achievements, winning international awards, likeBest Managed Airline, or receiving a 2009 FT-ArcelorMittalBoldness in BusinessAward. This Award announcement

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