Swot Analysis Of Ryanair

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 staff worked up to 12 hours in a row without a brake. Moreover the increase of the amount of working hours did not reflect the same increase in terms of remuneration, in fact staff’s salary increased just 3% whereas the working hours increased by 21%.

In addition the company is now recruiting its cabin crew in Poland and in Latvia in order to cut further down its costs, the fact is that people spend enormous amounts of money(for their standards) for a English course provided from the company in order to get a chance to get hired, which represents not only a bad image but also a bad advertisement for Ryanair.

In general the whole staff is working under big pressure set by an overhead person and most commonly with feelings of unsatisfaction.

b. Low quality services and attitudes towards customers

b.1. Disabled people

• “Bob Ross successfully sued 'Britain's favourite airline' on January 30. Ross has stamina problems as a result of having cerebral palsy and was charged 18 pounds by Ryanair for the use of a wheelchair through the concourse of Stansted Airport. Other airlines absorb this cost but Ryanair have been making disabled people pay extra” (BBC).

This example successfully shows how the company does not take care of all its customers in the way it should be done, therefore this case was brought to court since it was found unacceptable the fact that a disabled person had to pay for the transportation through the airport, which normally it is a cost that is absorbed by the company. Unfortunately this is not their only case, in fact it has happened that Ryanair had to unload from the plane some disabled people since there is a determined “quota” of disabled passengers per flight.

All these restrictions towards disabled people concur to build up a bad image and bad advertising for the company.

b.2. Low quality