Airline Pest Analysis
Introduction
Ryanair is headquartered in Dublin, Ireland and operates a low-fare, no-frill scheduled passenger airline. Ryanair serves short-haul, point-to-point routes between Ireland, the United Kingdom, and continental Europe, making Ryanair Europe¡¦s largest low-fare airline. It has destinations in 13 countries with 76 low-fare routes. Its fleet consists of 21 Boeing 737-200s and 21 737-800s. Launched in 1985, Ryanair¡¦s growth has been extraordinary. Ryanair currently employs a team of 1500 people and will carry over 13 million scheduled passengers in the current year (2002). In 1986, Ryanair broke the high fare cartel, which was then operated by the two state airlines Aer Lingus and British Airways in the Dublin-London route. The first four years Ryanair was carrying 600,000 passengers annually, but had managed to lose 20million pounds.
Under a new management team, headed up by Michael O¡¦Leary, a major overhaul of the airline was undertaken in 1990/91. With Ryanair re launched as the very first new breed of ¡¥Low-fare, no-frill¡¦ airline, adapting the formula so successfully pioneered by south West Airlines in the U.S, non profitable routes were eliminated, the network was cut back from 19 to just 5 routes and air fares across the remaining network were substantially reduced. For example, on Dublin-London route, a new promotional fare of just 69 pounds returns was launched which stimulated a whole new era of growth for Ryanair. The company¡¦s goal was to be profitable on new routes from their inception, by pitching their fares to be low enough to attract new customers but high enough to provide a satisfactory operating margin. By 1991 Ryanair recorded its first ever profit despite the damage done to the Airline industry by the Gulf war in 1991. Over the next couple of years Ryanair substantially slashed its fares further and managed to open up many new attractive routes.
The new formula effected a turnaround in the fortunes of the company, and by
Ryanair is headquartered in Dublin, Ireland and operates a low-fare, no-frill scheduled passenger airline. Ryanair serves short-haul, point-to-point routes between Ireland, the United Kingdom, and continental Europe, making Ryanair Europe¡¦s largest low-fare airline. It has destinations in 13 countries with 76 low-fare routes. Its fleet consists of 21 Boeing 737-200s and 21 737-800s. Launched in 1985, Ryanair¡¦s growth has been extraordinary. Ryanair currently employs a team of 1500 people and will carry over 13 million scheduled passengers in the current year (2002). In 1986, Ryanair broke the high fare cartel, which was then operated by the two state airlines Aer Lingus and British Airways in the Dublin-London route. The first four years Ryanair was carrying 600,000 passengers annually, but had managed to lose 20million pounds.
Under a new management team, headed up by Michael O¡¦Leary, a major overhaul of the airline was undertaken in 1990/91. With Ryanair re launched as the very first new breed of ¡¥Low-fare, no-frill¡¦ airline, adapting the formula so successfully pioneered by south West Airlines in the U.S, non profitable routes were eliminated, the network was cut back from 19 to just 5 routes and air fares across the remaining network were substantially reduced. For example, on Dublin-London route, a new promotional fare of just 69 pounds returns was launched which stimulated a whole new era of growth for Ryanair. The company¡¦s goal was to be profitable on new routes from their inception, by pitching their fares to be low enough to attract new customers but high enough to provide a satisfactory operating margin. By 1991 Ryanair recorded its first ever profit despite the damage done to the Airline industry by the Gulf war in 1991. Over the next couple of years Ryanair substantially slashed its fares further and managed to open up many new attractive routes.
The new formula effected a turnaround in the fortunes of the company, and by