Ryanair Case Study

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Ryanair’s average flight represents just 442 miles which is the equivalent of average length of passenger haul. This is a relatively small number that can be explained by the fact that Ryanair does not offer transatlantic flights, but focuses exclusively on routes between Ireland, the UK and Continental Europe. If one divides the number of employees at period end by the employees per aircraft served at period end one receives the number of airplanes, in this case 41,38 airplanes. Furthermore one can calculate the sectors each airplane flies each day. Therefore one starts with the sectors flown each year namely 90.124. This figure can be broken down to sectors flown each month (7.510) and each day (247). By now one divides the sectors flown each day by the number of airlines which adds up to 5,97. Hence every Ryanair airplane flies six routes each day which is an amazingly high number and only feasible on the strength of a business model that is based on fast turnaround and short haul flights in Europe.

To answer the second question properly one has to take a closer look on Ryanair as a Low-Cost Carrier. Ryanair exclusively offers short haul flights and point-to-point routes in one class with no frills. There is no doubt that Ryanair’s biggest factor of success has been its low cost structure compared to incumbent airlines as well as to other Low-Cost Carriers, which allows them to offer significantly lower fares. In my opinion one can identify four major aspects which constitute the company’s outstanding cost position. First, Ryanair uses only one kind of plane, the Boeing 737. Through their fleet commonality the company is able to limit costs for maintenance and staff training on the one hand and by choosing the Boeing 737 gain important seating capacity on the other hand. Second, Ryanair’s management of staff costs and productivity is a very interesting approach. They do pay salaries above-average, but therefor the staff is also encouraged to maximise the...
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