Ryanair business competitive sustainability

Posted on Posted in General

Ryanair (RYAAY: NASDAQ) was founded in 1985 by the Ryan family in Waterford, Ireland (Ryanair, 2009b) headed by Tony Ryan (Ryanair, 2009a), and currently headquartered located in Dublin, Ireland (FAME, 2009). While in 1990 where the company had flown through a great deal of turbulence and the Chief Executive position was taken over by Michael O’Leary (Telegraph.co.uk, 2001). Ryanair core market place is Europe, where it recently overtook Lufthansa, Air France and British Airways in become the largest European airline, and the sixth largest airline in the world (Ryanair, 2009b).

Ryanair started off as full-service conventional airline, with two classes of seating, which are business class and economy class, while the fleet was leased with three different types of aircraft. Then in 1990 when O’Leary took office, the company under his supervision changes its business model dramatically, implementing cost-leadership strategy (Snell, 2007), utilizing disruptive innovation outsourcing strategy (Leavy, 2004, Anderson & Williams, 2004), and market segmentation focus (Strategic Direction, 2006a). Providing that Ryanair currently operate under its own new single fleet of Boeing 737-800 model type planes to keep aircraft maintenance cost low as possible (Ryanair, 2009b), a business model which there have inherit from Southwest Airline (Strategic Direction, 2006a).

When the world is worried about the impact of the financial meltdown and global economic slowdown, Low-cost carriers including Ryanair have been growing rapidly (Standard & Poor’s, 2009), nonetheless outperforming its competitors in term of operational trends (Reuters, 2009). Achieving revenue of €2,713 million in revenue and €390 million for year ending 2008 (Ryanair, 2008a).

Whilst Ryanair has become something of a paragon of operating efficiency (Strategic Direction, 2004), but is the strategy that Ryanair has implemented is capable of sustaining its competitive advantages further into the future is the prime purpose of this paper and again is change relevant for the company.