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Ryanair Marketing Strategy 2024: A Case Study

Ryanair is one of the top low-cost airlines in Europe. It flies to over 610 places. The company has more than 5000 workers from 25 different countries. Ryanair is focused on growing fast, making it very successful. In this case study, we look at how Ryanair markets its services, advertises, positions its brand, analyzes its audience, and uses digital marketing .

Ryanair plans to have four times as many planes by 2024. It’s important to see how they became so successful in a tough market. We’ll look at their ads, see what makes them stand apart, and understand their marketing. This will help us see what Ryanair might do in the future.

Key Takeaways:

• Ryanair is a leading low-cost airline in Europe, with a focus on rapid expansion.
• The airline operates over 610 destinations and employs over 5000 employees.
• Ryanair’s marketing strategy has contributed to its success and profitability.
• We will explore Ryanair’s advertising tactics, brand positioning, and target audience analysis.
• Ryanair’s digital marketing approach and competitive landscape will also be discussed.

About Ryanair

Ryanair was started in 1985 by Tony Ryan, Christopher Ryan, and Liam Lonergan. It aimed to challenge the main players in European air travel. But soon, Ryanair hit a tough spot financially.

So, they decided to become a low-cost airline. This change made Ryanair very popular. Now, it offers cheap flights to many places in Europe.

Ryanair is famous for making it cheaper to fly. They keep prices low and run their airline efficiently. This made them a big name among budget airlines.

With lots of destinations and low fares, Ryanair helps those looking to save on travel. They meet the needs of budget-savvy travelers all over Europe.

Ryanair’s success comes from always wanting to give great value to its customers. They keep improving their way of doing things to keep costs down.

This approach makes them stand out in a crowded market . Ryanair is now a top choice for those looking for affordable flights in Europe.

Marketing Mix of Ryanair

The marketing mix of Ryanair has four main parts: price, product, place, and promotion strategies. Each part is vital for Ryanair, helping it stand out as a top budget airline in Europe.

Price Strategy

Ryanair is known for its low prices, offering very cheap flights across Europe. It uses dynamic pricing to attract customers looking for deals. This means 70% of seats are sold at the lowest rates.

A third of the seats go for a higher price, and the last 6% are the most expensive. Ryanair adjusts prices based on demand, keeping fares low for customers.

Product Strategy

Ryanair aims to fill every seat and offer extra services for a better travel experience. It keeps planes flying as much as possible to cut costs. This lets Ryanair offer low fares.

They also provide added extras like car hire and priority boarding. This meets the needs of various travelers.

Place Strategy

Ryanair mainly sells tickets online. Its website is the go-to for checking flights, planning, and booking. This digital focus makes booking easy and suits today’s travelers.

Promotion Strategy

Ryanair markets itself as affordable, straightforward, and family-friendly. It uses online ads, print, and TV to spread the word. The focus is on its low fares, easy booking, and customer care.

Competitor Analysis of Ryanair

Ryanair battles with many low-cost airlines. EasyJet is its main competitor. Lufthansa also competes with Ryanair in brand positioning.

Ryanair targets those wanting affordable flights. Lufthansa, however, aims for passengers desiring comfort and luxury. It positions itself as a premium airline with quality experiences.

Ryanair’s strategy focuses on offering the lowest prices. It targets budget travelers, standing out from Lufthansa and other low-cost airlines.

Comparison of Ryanair and Lufthansa

Ryanair and Lufthansa play key roles in Europe’s airline sector. Ryanair attracts those on a budget. Lufthansa appeals to passengers looking for quality and comfort.

Both airlines succeed by meeting their customers’ needs. Ryanair’s advantage is its low prices. This helps it grow and lead among Europe’s budget airlines.

Target Audience Analysis of Ryanair

Ryanair targets price-sensitive customers with its low-cost flights. They offer the lowest prices to attract those who want affordable travel. This strategy lets Ryanair use their budget efficiently, focusing on competitive pricing over costly ads.

Ryanair uses young people, often students, to craft their ads. This matches their audience, as many young folks look for budget-friendly options. Involving them in ad creation makes Ryanair’s campaigns more relatable to their audience.

Ryanair’s strategy is similar to Aldi’s focus on low prices. They position themselves as an affordable choice for travelers. This makes them appealing to those wanting to save on travel costs.

Ryanair also uses tactics similar to Amazon by using customer data. They personalize offers to fit customer preferences and past bookings. This method helps them tailor their marketing , making them more appealing to their audience.

The Need for Speed

Ryanair aims to be the fastest airline in their field. This includes quick flight turnarounds and speedy marketing responses. They’re agile, adapting quickly to any market changes, always staying ahead.

Overall, Ryanair focuses on those seeking cheap flights. They aim to offer the lowest prices, use young designers for ads, and learn from brands like Aldi and Amazon. This approach helps them connect with their main audience effectively.

Digital Marketing Presence of Ryanair

Ryanair uses digital marketing to improve its brand and connect with customers. It reaches a wider audience online and builds a strong presence.

Website: Streamlining the User Experience

The Ryanair website makes planning and booking easy. It’s user-friendly, helping visitors find flights and trips. The site also offers detailed info on services, schedules, and destinations.

YouTube: Sharing Travel Experiences

Ryanair shares travel content on YouTube. They post videos of destinations, travel tips, and virtual guides. This visual storytelling helps connect with viewers and inspires travel.

Twitter: Engaging with Customers

Ryanair communicates with followers on Twitter. They offer updates, deals, and respond to questions. This builds strong customer relationships. Ryanair also uses Twitter to share important flight info.

Ryanair enhances its brand through digital marketing. It connects with customers and promotes services effectively. To grow, Ryanair could use Facebook and Instagram for unique campaigns. This will help in the competitive airline market .

SWOT Analysis of Ryanair

A SWOT analysis gives us a closer look at Ryanair’s strengths, weaknesses, opportunities, and threats. Ryanair is a famous low-cost airline in Europe.

• Ryanair’s main strength is its low-cost flights. This attracts those looking for cheap travel options.
• The airline has a lot of customers because it flies to over 610 places in Europe. It also runs its flights very well.
• Ryanair uses its resources smartly. This helps it make money and stay ahead of its competitors.
• Ryanair might have issues with how good its service is. This could make customers unhappy and hurt the airline’s image.
• The airline has had fights with groups that make rules. This has led to legal problems and could cost a lot of money.

Opportunities

• By flying to new places, Ryanair can grow. It can reach markets it hasn’t been to before.
• Using digital marketing can help Ryanair get more people to know about it. This could lead to more people booking flights and more money coming in.
• Bad economic times and political changes can lower the demand for flights. This is a risk for Ryanair’s business and money-making.
• Other airlines, especially cheap ones like easyJet, are a challenge. They could take away some of Ryanair’s customers and profits.

Market Segmentation by Ryanair

Ryanair, a top low-cost airline in Europe, uses a market segmentation strategy. This strategy helps meet the different needs of its customers. They focus on price-sensitive customers looking for cheap flights in Europe.

Ryanair’s approach involves demographic segmentation. This helps them understand and serve various customer segments better. They provide low-cost flights appealing to diverse travelers.

1. Students

Students form a key segment for Ryanair. They travel often for education, holidays, or to see family. Ryanair offers them affordable flights, fitting their budget.

2. Budget Travelers

Budget travelers are another important segment for Ryanair. They seek the best deals and don’t mind skipping extras for cheaper flights. Ryanair’s pricing and no-frills service match their preferences.

3. Business Travelers

Ryanair serves business travelers looking for value. With competitive fares and many routes, it’s a go-to for professionals needing cost-effective travel.

4. Cost-Conscious Travelers

Ryanair also targets cost-conscious travelers broadly. This includes anyone aiming to save on flight costs. Ryanair’s low prices make it a top choice for budget-friendly European travel.

Ryanair’s segmentation strategy helps it cater to unique customer needs effectively. By focusing on affordability, Ryanair attracts price-sensitive customers and businesses looking for budget travel.

Brand Differentiation of Ryanair

Ryanair stands out with its unique strategy. It leads the market by having the lowest prices. This makes it perfect for those wanting to fly affordably.

Ryanair draws in travelers looking for good deals with its budget-friendly fares. Its commitment to low prices has made it known as a dependable low-cost airline.

Ryanair’s brand stands out because of its marketing . They focus on their low fares. This makes traveling feel simple, joyful, and great for families.

Unique Selling Proposition:

Ryanair is known for always having the lowest prices. By using a cost leadership strategy, it attracts customers who want value without sacrificing service quality.

People see Ryanair as an airline that gives them more for their money. This helps them save on travel costs without giving up comfort or reliability. This view makes Ryanair the top pick for budget flights.

Customer Perception:

Customers see Ryanair as affordable, simple, and family-friendly. Its low fares attract those looking for economical travel.

Ryanair is also known for being straightforward and efficient. Travelers like the easy booking and no-extra service. This lets them focus on just getting to where they’re going.

The airline also thinks about families. It offers low fares for kids which makes traveling together easier and cheaper.

Ryanair’s Competitive Landscape

In Europe’s low-cost airline market, Ryanair stands out as a top player. It’s known for the cheapest prices. This strategy helped Ryanair grab a big part of the market and beat other airlines.

Even with competitors like easyJet, Ryanair’s quick growth and sharp focus on being the cheapest have made it a major airline in Europe. It offers low-priced flights, drawing in those looking for a bargain. This has built a strong market presence for Ryanair.

Ryanair catches the eye of those watching their budget with its super low fares. This approach has nabbed Ryanair a big slice of the market . It’s a strong rival against other airlines in this space.

Ryanair also shines in cutting costs and running efficiently. This lets them cut flight prices even more. This makes Ryanair even more appealing in a tough market.

Though easyJet and others are in the mix, Ryanair’s sharp focus on cutting costs and growing wisely keeps it ahead in Europe.

To better understand Ryanair’s place in the market, look at this table. It shows Ryanair’s market share compared to its main rivals:

Ryanair is clearly ahead among Europe’s low-cost airlines. Its smart way of keeping costs low, pricing lower, and growing have put it at the front.

In the end, Ryanair leads in the low-cost airline race in Europe. By always offering the cheapest flights and using its resources well, Ryanair stays on top.

Ryanair’s approach to marketing has put it at the top of the budget airline market. It focuses on low prices to attract those looking to save. Digital marketing also plays a big role in its success. This strategy has helped Ryanair grow and stay profitable.

The future looks bright for Ryanair. But it must keep up with changes in the airline industry. It might need new ways to cut costs and make passengers happier. Being smart with technology and listening to what travelers want will help Ryanair stay ahead.

In short, Ryanair stands out in the budget airline world because of its smart marketing. It offers low prices, pays attention to the right customers, and uses digital tools well. If Ryanair keeps adapting to industry changes, it can keep winning more travelers. This could make it an even bigger name in European air travel.

What is Ryanair?

What is the marketing mix of ryanair, who are the competitors of ryanair, who is the target audience of ryanair, how does ryanair differentiate itself from competitors, what is ryanair’s digital marketing approach, what are the strengths and weaknesses of ryanair, how does ryanair segment its market, what is ryanair’s position in the competitive landscape, what is the future outlook for ryanair’s marketing strategy, related posts.

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Home » Management Case Studies » Case Study: Ryanair Business Strategy Analysis

Case Study: Ryanair Business Strategy Analysis

Ryanair is an Irish low cost airline headquartered in Dublin founded in 1985. It operates 181 aircrafts over 729 routes across Europe and North Africa from 31 bases. Ryanair has seen large success over the recent years due to its low-cost business model and has become the world’s largest airline in terms of international passenger numbers. Taking Porter’s generic business strategies into consideration, Ryanair operates a cost-leadership strategy to drive itself into achieving its mission of being the leading European low-cost carrier (LCC). Throughout this essay the business strategy of Ryanair will be analysed and the sustainability of their model evaluated.

Ryanair’s 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. Considering their objectives and mission, Ryanair’s decision on their cost-leadership strategy was based on a few main factors which are discussed below.

A major influence was the deregulation of the airline industry in 1978 which removed government intervention within the European continent. Under the new rules, routes and fare decisions were made by individual airlines which meant that they could compete on other factors besides food, cabin crew and frequency. As a result of deregulation, a large number of new airline start-ups emerged within the EU and competition among airlines increased dramatically resulting in downward price pressures. Ryanair was established to take full advantage of these market conditions. By offering low prices, Ryanair entered a huge and virtually unlimited market.

Having seen the major success of the low cost carrier Southwest in the United States, Ryanair decided to follow in their footsteps by establishing a LCC for the European continent that targeted fare conscious leisure travelers and regular low cost business travelers. By doing this Ryanair became the first low-fare airline in Europe. However, they took the Southwest model further by offering no drinks and snacks at all and abolishing the frequent flyer program which Southwest up to this day offers its customers.

The evaluation of Porters five forces influenced Ryanair’s choice of a cost-leadership strategy, as the threat presented by new entrants and the threat of substitutes could hinder their success. The threat of new entrants is high within the aviation industry which meant that low fares would help drive away any further competition. The threat of substitutes to Ryanair had to also be carefully examined. Their primary market, Europe, had the availability of high speed trains and car holidays. For Ryanair to be successful, prices had to be low to attract the public, and resist strong competition from substitutes like Eurostar.

As Europe’s largest low fare airline, Ryanair’s competitive advantage remains in their ability to continue as cost leaders; providing the cheapest fares to its customers. This dictates that the company must minimize its own costs to ensure that they are able to offer customers the service at a price below their direct competitors. This leads us to consider some key functional strategies which directly help Ryanair towards their ultimate goal to be Europe’s leading low fares airline.

The marketing strategy is perhaps the most obvious and significant functional strategy of Ryanair. Low fares are designed to stimulate demand, attracting fare-conscious travelers, those who may have used alternative forms of transportation or even those who may have not traveled at all. Penetration pricing as it is called helps gain market share and simply, more customers equals more revenue. Tickets are almost solely sold on their website ‘www.ryanair.com’ which very importantly keeps sales costs to a minimum since very few phone operators are employed and computers are able to cheaply handle all functions of sales. With ever increasing accessibility of the internet globally anybody with internet access can buy airline tickets from Ryanair, so distribution practically takes care of itself through this medium. Ryan Air relies on low cost promotions and in recent times has concentrated on their ‘One million seats at one pound’ which is usually advertised through their internet site, national press and bulletin boards. It is the simplicity of this promotion which helps keep costs low since expensive advertising agencies can be entirely avoided and advertising can be dealt with in house.

Ryanair’s operations strategy determines how the airline will deploy its resources and the policies it will operate by. To keep costs low they operate a ‘no frills’ service onboard aircraft. This means the fare only includes the flight. There are however a number of other measures directly related to a no frills service. These include ticket-less boarding, unallocated seats, one class of travel, costs for check-in baggage, no refund policy, basic seats (to increase aircraft capacity) and charging for any additional service. All this significantly reduces costs to Ryanair. The Achilles heel of Ryanair is their greater aircraft utilization through super quick turnaround times. Essentially this means the aircraft spends very little time on the ground, they achieve this through their human resource policies and by having none or very little cargo in the baggage hold to speed up loading and unloading of the aircraft.

Logistics strategy deals with the flow of products into and out of Ryanair. Again there is heavy emphasis on cost saving and reducing measures. Ryanair fly to secondary airports which are potentially much further from the City centre but accessible enough by other forms of ground transportation. At these airports Ryanair are able to negotiate extremely aggressively and demand the lowest landing and handling fees. Additionally Ryanair is usually able to gain financial assistance with marketing and promotional campaigns at these airports.

As cost leader Ryanair strives to undercut all its rivals but this means very low income per fare and requires maximum utilization of its resources. Fortunately their financial policy ensures they are able to still profit handsomely from rock bottom fares. The aim is to break-even on fares but to make their profits out of ancillary charges and commissions from their partners. Ryanair has a number of affiliates such as Hertz car rental, Acumus insurance and booking.com all of whom are advertised readily on the Ryanair website. Since the website has high website traffic its partners are able to reach out to Ryanair’s huge client base and are prepared to pay good commissions to the firm for this privilege. Ryanair also generate income from advertising on board the aircraft. Ancillary revenue is generated from many of the services that traditional airlines wouldn’t charge for, such as large baggage into the cargo hold, allocated seating, snacks and drinks.

Ryanair’s strategy when purchasing aircraft is to buy new, uniform aircraft. This is beneficial for a number of reasons all of which directly help cost saving measures. Firstly, by being able to order same aircraft in bulk they are able to negotiate a better price per aircraft. Secondly, uniform aircraft mean that there are potential savings in staff training; air stewards being more familiar with all aircraft and maintenance will be simpler. Finally by buying new, the company has safer, more fuel efficient planes with lower maintenance costs. Safer aircraft also means greater consumer confidence, equating to more fare sales.

Furthermore Ryanair aggressively hedge and fix as many of their costs as possible, such as oil and aircraft prices so they are not subject to future price fluctuations which could adversely affect profitability.

The human resource policy is again directly related to reducing costs. Employees are expected to pay for their own uniform and equipment. Training given is the required minimum and staff utilization is among the highest in the airline industry. Many staff are employed on performance contracts and those who do not meet their expectations are readily replaced. Staff are also expected to take on a number of roles, cabin staff will also clean the aircraft prior to the next service, check in staff assist in boarding the aircraft etc.

Ryanair has successfully experienced years of growth both in the number of its aircrafts and passengers since its launch.   However, with the global financial system recently suffering its greatest crisis in more than 70 years, existing business models of many aviation firms are coming under great strain. As this economic downturn bankrupts LCCs like XL and Zoom with more expected to follow, the question is whether Ryanair’s cost-leadership strategy is sustainable or not as it continues to offer lower fares in the face of high costs. Although Ryanair has posted losses along with other aviation firms for the latest quarter, it is expected to emerge from this downturn with fewer competitors because its â €š ¬1.8 billon balance sheet is one of the strongest in the industry. Additionally, as the credit crunch takes its toll, traditional airlines are not in a position to cut fares and the threat of new LCCs is virtually eliminated due to the lack of financing. Although Ryanair faces competition from substitutes like Eurostar, it is at an advantage because of Eurostar’s limited destinations.

Ryanair is sticking to its mantra, when the going gets tough, sell more seats for almost nothing. By offering low fares, Ryanair expects passengers to trade down to the low cost airlines rather than stop flying completely. This trend appears accurate so far based on passenger numbers as recession forces millions of passengers to focus on price. Additionally, the latest statistics from The European Low Fares Airline Association members show a 15.7% year-on-year growth in the number of passengers for 2008, indicating that the LCC model is robust, even in times of crisis. Consequently, there is no doubt that Ryanair looks poised for substantial profits and passenger growth in the coming years. However, in order to compete with other LCCs and maintain its continued market share growth in the future, Ryanair needs to improve its poor customer relations.

The sustainability of Ryanair’s cost leadership strategy also depends largely on the price of oil and how effective the firm is in cutting costs in order to continue offering low fares. According to the firm’s latest financial report, Ryanair will enjoy significantly lower oil costs thanks to their recent hedging programme, when most of their competitors are already hedged at much higher prices. These lower prices will drive Ryanair’s traffic growth, maintain high load factors and capture market share from higher cost fuel surcharging competitors. In order to cut costs, Ryanair close all its airport check-in desks and have passengers check-in online instead. Other cost saving methods not yet implemented include charging customers for using toilets on airplanes. These cost cutting ideas are not very popular among consumers and it means that Ryanair needs to improve its already tarnished brand image in the future which it had attained through negative press reporting and misleading advertisements .

The current strategy at Ryanair is expected to work so well that despite the recession Ryanair’s CEO has underlined the firm’s commitment to expansion. The firm is expected to grow at 20 percent a year because of a 180 aircraft’s on order from Boeing. These expansion plans for the future will require the company to increase its landing slots at airports and recruit more employees. Currently Ryanair has limited access to landing slots in major airports and the secondary airports are long distances away from city centers which could make it less attractive in the future.  However, a remarkable cut in flights by other European airline carriers due to recession is creating enormous opportunities for Ryanair, as many major airports compete to reduce charges in order to attract Ryanair’s growth. Availability of skilled personnel shouldn’t be a problem for Ryanair due to recent high unemployment levels. However, Ryanair needs to improve its current low level of empathy for employees if it is to retain them in the future.

Even though Ryanair’s cost leadership strategy is robust and it looks set to serve them well in the future, there are some key areas within the business that can be improved on to enhance the firm’s profitability and brand image.

Ryanair has always been criticized for many aspects of its poor customer relations. According to The Economist, Ryanair’s “cavalier treatment of passengers” had given Ryanair “a deserved reputation for nastiness” and that the airline “has become a byword for appalling customer service  … and jeering rudeness towards anyone or anything that gets in its way”. If Ryanair is to maintain its large customer base, it needs to ensure that it acknowledges its customers’ concerns and maintains a service focused attitude at all costs. Ryanair needs to invest in servicing customers better by providing a non-premium contact number, improving its non user friendly website, and simplifying the terms and conditions of the flight service. Ryanair should also create a frequent flyer program to establish a fixed customer base and encourage customer loyalty.

Ryanair is notorious for its high staff turnover which negatively affects its reputation as an employer. Over utilization of employees, poor remuneration package , and minimal training are a few other critical items to be considered by Ryanair if it is to retain employees in the future. Ryanair needs to understand that although it is currently possible to replace outgoing employees, but with time Ryanair’s overall image will be tarnished. Resultantly, attracting new employees could become impossible and this will hinder their expansion plans. Ryanair should incorporate a flexible benefits package solely designed to improve employee morale such as flexible working hours and extra holidays. To improve its image amongst employees, training at all employee levels must include exposure to similar techniques and methods that help promote the development of a uniform company identity.

Following huge success in Europe, Ryanair should consider introducing low cost transatlantic flights to support its expansion plans and attain a larger customer base. With a high demand for certain routes like London-New York and room for negotiation in airplane prices and airport slots mainly due to the current financial climate, it is an ideal time to further reap the rewards of the cost leadership strategy that has served Ryanair so well over the years.

Ryanair’s model looks set to survive the current industrial downturn through its lower costs and substantial cash balances. No airline is better placed in Europe than Ryanair to trade through this downturn. It will therefore continue to grow, by lowering fares, taking market share from competitors, and expanding in markets where competitors either withdraw capacity or go bust. By taking the recommended improvements into consideration, it looks like Ryanair’s cost leadership strategy seems ideal for the future.

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Porter Five Forces Analysis of Ryanair

by adamkasi | Sep 13, 2017 | Companies

Founded in 1984, Ryanair is an airline based in Ireland that operates in the low-fare category. The headquarters are based in Dublin, Ireland. In 2016, with regard to scheduled passengers flown, Ryanair was Europe’s largest airline. Also, it carried more international passengers than any other regional competitor. In 1997, the aviation industry in Europe was deregulated. This led to the sudden expansion of many of the airline operators. Ryanair also expanded and currently operates 403 Boeing 737 aircraft. Ryanair’s low-cost business model is one of the prime reasons for its success. Ryanair flies to 205 destinations in 34 countries across Europe, Africa, and the Middle East. In 2016, Ryanair reported revenue of more than 6 billion Euros. Currently, 11,458 employees work for Ryanair at various locations across the countries it flies to. Following is a detailed Porter Five Forces Model Analysis of Ryanair

Competitive Rivalry – High

There are a number of low-cost airlines operating on the routes similar to Ryanair. These include Easy Jet, Go, Wizz Air, and so on. The competition to cover a maximum number of routes at the least cost is intense. Each player in the industry is striving to minimize their costs by reducing onboard passenger facilities and airport outlay costs. The focus is on short-haul flight routes. On many routes, Ryanair has been able to drive out competition due to its experience and large fleet size. However, on many routes, the competition is still intense. The deregulated airline industry has made the entry of other airlines easier into the European region increasing competition for the local operators such as Ryanair. All of this reflects a high competitive rivalry for Ryanair.

Threat of New Entrants – Low

The aviation industry is an expensive industry to enter for new entrants. The entry barriers are high. Purchasing or even leasing jets is expensive. Then getting slots at desired airports is costly and tough especially for new airlines, inventory of spares is not economical, and so on. In order to generate awareness, huge marketing costs would need to be incurred. The staff required for an airline such as pilots and stewardesses are not cheap nor it is easy to find qualified such staff. Developing the low operational costs that airlines like Ryanair have developed takes experience and economies of scale (Bagdanskas, 2016). Only then can low-fare flights be profitable. Thus, the threat of new entrants is not high for Ryanair.

Bargaining Power of Suppliers – High

There are only two manufacturers of airplanes: Boeing and Airbus. Ryanair purchases its planes from Boeing. This Duopoly has led to these manufacturers charging high prices for the aircraft. However, since Ryanair is the highest purchasing customer of Boeing in Europe, even during the 2005 post 9/11 era, Boeing holds a soft corner for Ryanair and gives it rates less than standard market rates. The other suppliers are of jet fuel. The prices are governed by world trade, therefore Ryanair cannot attempt to bargain the prices of jet fuel from the suppliers (Field, 2017). Therefore, the bargaining power of the suppliers is high against Ryanair.

Bargaining Power of Buyers – High

The low-fare airline industry lacks customer loyalty or brand loyalty. Customers are only loyal to low-fares. Any player that offers the lowest fares wins the greatest number of customers. The switching cost for the buyers is almost zero. If any player attempts to increase fares, buyers will shift to the other airlines causing the airline to lose business. All low-fare airlines are working towards reducing their operating expenses and providing the flyers with greater facilities. All of this further adds to the bargaining power of the buyers. This makes the bargaining power of the customers high.

Threat of Substitutes – Low

Within the European land, there are a number of other systems such as train, buses, and cars that can be used to travel over the short-haul routes. However, the train fares are not cheap. They also take considerably longer time. Ryanair tackles this by providing a comparison of their rates and the train fares over a number of routes on their website, encouraging people to use their services over non-flying means of transport (Dudovskiy, 2012). This reflects a weak threat of substitution for Ryanair.

Bagdanskas, P., 2016. Ryanair industry analysis – A case study report. [Online] Available at: https://www.slideshare.net/PauliusBagdanskas/ryanair-industry-analysis-a-case-study-report [Accessed 02 Sept. 2017]. Dudovskiy, J., 2012. Ryanair Porter’s Five Forces Analysis. [Online] Available at: http://research-methodology.net/ryanair-porters-five-forces-analysis/ [Accessed 01 Sept. 2017]. Field, H., 2017. Porter’s 5 Forces Ryanair. [Online] Available at: http://www.academia.edu/5084225/Porter_s_5_Forces_Ryanair [Accessed 01 Sept. 2017].

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Ryanair: Flying Too Close to the Sun?

By: Ciaran Heavey, Dorota Piaskowska

Unlike any other European airline, Ryanair DAC had long experienced impressive growth and performance thanks to its well-designed and ruthlessly executed low-cost carrier business model. However, the…

• Length: 23 page(s)
• Publication Date: Jun 12, 2019
• Discipline: Strategy
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Unlike any other European airline, Ryanair DAC had long experienced impressive growth and performance thanks to its well-designed and ruthlessly executed low-cost carrier business model. However, the limits of growth did begin to appear, at which time the company adjusted its business model with an increased emphasis on customer orientation. As a result, cracks in the business model appeared and labour issues came to the fore. While the media and industry analysts were focused on these challenges, Ryanair was undergoing a quiet digital revolution, shifting the airline's business model toward a technology-based travel platform. With the problems in the business model and a shifting business strategy, could Ryanair achieve the ambitious growth targets it set for 2024?

Ciaran Heavey is affiliated with University College Dublin. Dorota Piaskowska is affiliated with University College Dublin.