Ryanair: Swot Analysis

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COMPANY PROFILE
Ryanair Holdings (Ryanair or ‘the company’) operates low fare scheduled passenger airline serving short haul, point to point routes between Ireland, the UK, and Continental Europe, as well as Morocco. It is headquartered in Dublin, Ireland and employs about 8,560 people. The company recorded revenues of E3,629.5 million ($4,796.7 million) during the financial year ended March 2011 (FY2011), an increase of 21.5% over FY2010.The operating profit of the company was E488.2 million ($645.2 million) during FY2011, an increase of 21.4% over FY2010. The net profit was E374.6 million ($495.1 million) in FY2011, an increase of 22.7% over FY2010.

SWOT ANALYSIS
Ryanair Holdings (Ryanair or ‘the company’) operates low fare scheduled passenger airline serving short haul, point to point routes between Ireland, the UK, and Continental Europe, as well as Morocco. The company follows a firm operating strategy which enables it to achieve high asset utilization and reliable on-time performance. However, intense competition may result in price discounting and pressurize the operating margins of the company.

Strengths Weaknesses
Firm operating strategy Legal proceedings
Robust route network
Strong fleet operations
Strong financial performance
Opportunities Threats
Growing global tourism industry Intense competition and price discounting EU regulations on passengers'
compensation
Accelerating UK airlines industry
Price volatility in petroleum markets
Risk relating to natural calamities
Strengths
Firm operating strategy
Ryanair focuses mainly on point-to-point service rather than hub-and-spoke service provided by major airlines. Point-to-point flying allows Ryanair to offer direct, non-stop routes and avoid the costs of providing additional services for connecting passengers, including baggage transfer and transit passenger assistance. The company provides frequent point-to-point service on short-haul routes to secondary and regional airports in and around major population centers and travel destinations. In FY2011, the company flew an average route length of 727 miles and average flight duration of approximately 1.69 hours. Short-haul routes allow Ryanair to offer its low fares and frequent service, while eliminating the need to provide unnecessary frills, such as in-flight meals and movies, which are expected by customers on longer flights.

Ryanair chooses secondary airports and regional airports, which are generally less congested than major airports and, as a result, can be expected to provide higher rates of on-time departures, faster turnaround times (the time an aircraft spends at a gate loading and unloading passengers), fewer terminal delays, more airport access, and less handling costs. Faster turnaround time is a key element Ryanair Holdings plc Page 4

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Ryanair Holdings plc
SWOT Analysis
in Ryanair's efforts to maximize aircraft utilization. Ryanair's average scheduled turnaround time for FY2011 was approximately 25 minutes.The company's 'on time' performance record (arrivals within 15 minutes of schedule) in 2011 was 85%, which exceeded than that of its principal competitors, including Air France (approximately 83%); British Airways (approximately 83%); and Iberia (approximately 70%). This operating strategy enables Ryanair to achieve high asset utilization and reliable on-time performance. It also helps the company to increase its revenues and to tap profitable markets.

Robust route network
Ryanair operates through a strong route network. As of June 2011, the company offered over 1,550 scheduled short-haul flights per day serving about 160 airports largely throughout Europe, with an operating fleet of 272 aircraft. The company operates through approximately 1,300 routes. During FY2011, Ryanair opened 328 new routes across its network. Also the company intends to continue to add new destinations and additional flights, which are expected to increase Ryanair’s booked passenger...
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