Ryanair is one of the largest and still fastest growing low-fares airline companies in Europe. Led by CEO Michael O’Leary, a diverse board of directors, and an experienced top management, Ryanair has been very successful following a cost leadership strategy, partially achieved by a “no-frills” service strategy. External influences such as the European economic crisis, aviation deregulation, and rising oil prices have created opportunities or threats to Ryanair, and internal weaknesses such as unethical behavior have created issues as well. To address this, our team has created two recommendations for strategic change: correct unethical behavior and develop customer loyalty. Little new resources need to be acquired to make these changes; the largest obstacle to achieving them is to persuade the top management and board of directors that this is the correct new direction.
Board of Directors5
Global expansion strategy20
Problem Statement and Strategy Formulation20
Strategic Change Recommendations29
Organizational Controls Review31
Ryanair has grown exponentially since its emergence in the mid 1980s and has become a leader in the low cost airline industry in the Europe. It is currently now valued at over $10 billion. As of 2011, Ryanair currently had: * 44 European Bases
* 263 Boeing 737s
* Operated 1,500 flights a day
This company has been successful in continued growth since day one. As stated on the company’s website, their objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fares service. But, Ryanair is not the perfect company. There is always room for improvement. Through this paper, we will detail the company’s journey to where they are now in terms of strategy, and what recommendations we would make to create an even stronger company. Company History
Cathal, Declan, and Shane Ryan formed Ryanair with just one million Euros from their father, Dr. Tony Ryan, chairman and CEO of Guinness Peat Aviation, the aircraft leasing giant. With an experienced airline industry member as their father, they were able to have the assistance to truly make a successful company. At the startup of their company, flight attendants and crew had to be under the height of 5 foot 2 inches to be able to fit properly in the cabin (Ryanair.com). After the first year in business, the company had two airplanes and five employees. Plus, Ryanair managed to break even its first year as well. This is not something that is done by every company (Business & Company Resource Center). Within three years, the company had expanded to 600 employees (Business & Company Resource Center). At one point, the CEO prior to Michael O’Leary wanted to create a partnership with an American airline who wanted to come to the European market, but, O’Leary did not approve of that idea and thought it was not consistent with Ryanair’s objectives (Business & Company Resource Center). That CEO resigned soon after once Ryanir began to lose money instead of make profits (Business & Company Resource Center).
In recent history, when the global recession hit in 2008, Ryanair acted as if nothing had even happened (www.ryanair.com). They continued to grow and improve the number of consumers using their service, proving that they will not back down to a challenge. Founder’s Influence
The founders do not have much influence on...