Ryan Air

SWOT ANALYSIS

Strengths :

- Brand name: Ryanair through its 14 years in the LCC market has developed a very well recognised Brand name.

- Benefits from low airport charges: these aid the low base Ryanair benefits form

- Has first mover advantage on regional airports: acts as a barrier to entry

- Internet site (94% booking) www.ryanair.com: lowers the cost of distribution as over the phone booking are more costly. Eliminates the need of travel agents

- High seat density

- All Boeing aircraft: a uniform fleet saves on maintenance and training costs

- Fast turn-around

- High service performance: punctual, high rate of flight completion, low baggage loss, these give a good image of the company’s reliability.

- Modernised fleet which leads to less expensive maintenance: will become more uniform with only one model (737-800), also newer planes will require less maintenance.

- High aircraft utilization: Ryanair flies its planes for longer thus generating more revenue from its assets.

- Fuel and other risks hedging

- Small headquarters: low on over beads

- Point to point: no hub and spoke, lowers cost as no through services required

- Leading low cost airline

- Strong revenue growth

- Business strategy

- Air Lingus possible acquisition

Weaknesses:

- Prone to bad press: Ryanair is perceived as arrogant and the slightest incident gets a lot of press coverage.

- Niche market: restricted expansion possibility

- Distance of some regional airports from advertised destination: over time customers may find this a big inconvenience.

- Poor service: people, skills.

- Ryanair is extremely sensitive to changes in charges (increase in fare value)

- Weakening employee relations

- Lake of scale

Opportunities:

- EU enlargement: there will be a lot of new destinations opened up

- Still potential to capture market share: The LCC market share could more than double

- Benefits from less exposure to geopolitical risks: as only really operates in Europe

- Economic slowdown actually helps Ryanair: change in corporate culture, �steals’ customers from traditional carriers as they seek lower fares

- Launch of new routes

- Fleet expansion

- Global airline market

- constant increase in the network

- many acquisitions and fusions

- increase in the traffic in the future (+25% for 2015)

- development of the booking by Internet

Threats:

- Dependence on oil markets: fuel costs depend on the oil market

- Dependence on economic cycle

- Increase of low fare competition

- European court decision: this may make expansion more difficult and costs rise in the future

- Limited growth on the South European market

- Regional airports gain bargaining power for “second round”

- Customers are very price sensitive

- Raynair and EasyJet limit one another’s growth “rout wise”, need for peaceful co-existence, or routes could become battleground

- Face increase in air traffic control charges. As more planes fly in the sky

- Powerless to prevent introduction of duty for fuel or environmental charges: this would reduce its growth potential as it relies on price stimulation

- Increasing aviation fuel prices

- Threats to security

- European regulations on denied boarding compensation

- Secondary airports bad equipped

- Distant dispatching platforms on the principal airports

- Restricted comfort

- Not very major range of services

Strengths:

Flexibility of the tariff policy permitted by a yield powerful management:

Under the terms of a very elaborate tariff policy resulting from a yield powerful management, the profit on a flight starts beyond 50%, the prices of the last seats, bought before the departure, are identical to the tariffs applied by the regular companies (when the plane arrives at full capacity). This flexibility made it possible to limit the impact of the increase of the price of the kerosene, by the means of the reduction in the number of places actually sold at reduced price. Moreover, the minimum load factor (station-wagon even load Factor) to reach the dead point is much lower for Ryanair than for the traditional companies.

Quality of the consumer service:

Good punctuality, loss of luggage very weak, cancellation of flight little attends. The conveyor proclame itself to be the company number 1 in 2005 as regards punctuality, that due to the fact that it serves only small regional airports, cheaper and is congested, which not only make it possible to guarantee punctuality, but also to increase the rotation of the planes.

Stock exchange, financial performance:

The growth is a necessity for Ryanair. Indeed, the structure of costs of these companies can be maintained only if it is supported by a strong growth. Its stock exchange capitalization