Swot Analysis of Ryanair

Topics: Low-cost carrier, Airline, Customer service Pages: 8 (2287 words) Published: March 23, 2008
2. Procedure
The research for this report, which is focused on a S.W.A.T. analysis on Ryanair, was fully based on internet web sites. For full information, refer to the bibliography at the end of he report.

3. Findings
3.1 Strengths
a. Leadership in the low-cost sector
“Ryanair was Europe’s original low fares airline and is still Europe’s largest low fares carrier. Currently the company carries over 35m. passengers on 325 low fare routes across 21 European countries”( Ryanair). As a matter of fact Ryanair is currently the largest low-cost company on the market with 12 European bases, a fleet of over 250 aircrafts and more than 2700 employees. Moreover the company provides frequent point-to-point services which allows them to avoid costs of services for connecting passengers, costs of baggage transfer and costs of transit passenger assistance. In addition their cost-leadership strategy is based on the intention to overtake competitors by minimizing any cost in order to provide a same service but at a lower price.

b. Low costs
“Ryanair’s operating costs are among the lowest of any European scheduled passenger airline”(Ryanair). In fact the company focuses and try to control and reduce the four considered major costs for a passenger airline, which include aircraft equipment, personnel productivity, customer service and airport access and handling.

b.1. Aircraft equipment costs
The initial company’s strategy to contain the aircraft equipment costs was to purchase a single model( Boeing 737-200A) of used aircrafts between 11 and 17 years of life . However in the late 1990’s there was a significant drop down of the availability of such aircrafts on the market. As a consequence the company decided to start purchasing brand new aircrafts( Boeing 737-800) increasing in this way not only their fleet but also their costs. As a solution to this problem, Ryanair decided to purchased everything from a “single manufacturer which enabled it to limit the costs associated with personnel training, maintenance and the purchase and the storage of spare parts, as well as affording greater flexibility in the scheduling of crews and equipment”(Ryanair).

b.2. Personnel productivity
Ryanair aims to control its personnel costs by continuously improving the productivity of its already highly trained and specialized team. In fact in 2004 the calculated productivity (passenger booked per employee) increased by 21% which corresponds to 10.049 passengers per employee.

b.3. Customer service costs
In order to contain costs on customer services, such as passenger and aircraft handling, ticketing and other services, Ryanair has at certain airports some agreements with third party contractors. The advantage is that the company sets multi-year contracts at fixed prices which are subject to increase only when inflation occurs. Moreover the fact that all the reservation are made through either the call center or the internet web site, allows them to avoid extra costs which would occur if they used a travel agency

b.4. Airport access and handling
“Ryanair attempts to control airport access and service charges by focusing on airports that offer competitive cost terms. Ryanair’s record of delivering a consistently high volume of passenger traffic growth at many of these airports has allow it to negotiate favourable contracts with such airports for access to their facilities” (Ryanair). In addiction in choosing its routes, the company privileges secondary airports because generally they are less congested and better organized, which leads to the fact of the possibility to provide not only a better service in terms of on-time departures but also to have faster turnaround times( the time a aircraft spends at a gate loading and unloading passengers).

3.2 Weaknesses
a. Conditions facing Ryanair staff
Ryanair’s stuff is one of the most productive but also one with the most working hours. It was reported that...
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