2.2.1 Threat of new entrants Threat of new entrants is minimal for Ryanair. It would be difficult and nearly impossible to beat Ryanair in Europe’s market. Gaining contracts with distribution companies could be one of the barriers for new entrants. Cost advantage related with business expansion is believed to be one of the biggest barriers to entry in airline industry. 2.2.2 Threat of substitute There is a big amount of substitutes available, including railway, sea, coach and car rental, but it is safe to say that they are not significant to airline industry, especially Ryanair because in most of the cases Ryanair’s flight fares are cheaper than options given above.
Bad customer service There has been claimed on customer services provided by Ryanair on European airline and cancellations, missing bags and denied boarding. Even, the new CEO O’Leary suggests that Ryanair’s customer services are poor. It is because they too focus on reducing the cost until they neglect to serve their customers
There are also cost that are irrelevant to be charged to the passenger such as delay or cancellation fees that make the substitution are readily in the market because other airlines company are not charging their passenger with this kind of costs. All in all, Ryanair Holdings is not a sustainable competitive advantage in the long run since the company is not fully satisfied the above four criteria. Thus, the company should look forward in reducing any unnecessary cost that could escalate the cost of the trip in order to ensure the loyalty of the passenger and being able to sustain in the long run with a stable competitive
There is evidence of the company implementing certain policies to reduce pollution. Despite their environmentally friendly strategy, the company has been diminished by bad publicity. Thus Ryanair should adhere to good business practice for sustainability and high performance. Legal: Legal factors can affect the company 's image and reputation. In August 2003, Ryanair ceased operations at Strasbourg after losing a court case brought by Air France.
The main strength of Ryanair is it has a strong brand name since it already established since 1985. By having a strong brand name, it enables the Ryanair to create customer loyalty as the customers feel that they have some shared values with the Ryanair. For example, Ryanair offers lowest fares compared to others competitors and on time departures, thus the customers who are price sensitive and punctual are more attracted to Ryanair. As a result, Ryanair always be their first choice and it able the company to retain their loyal customers. Therefore, by having a strong brand name, it can contributes to the customers loyalty, thus leads to a growth and expansion of the company.
1) SWOT analysis would provide Ryanair Holdings a basic listing of conditions from both inside and surrounding of this airline company. Ryanair will know its strength and weakness from its internal conditions relative to its competitor and opportunities and threats from environment conditions external to it. The main strength in Ryanair is it offered low fares airline in ticket fee as compared to other competitors. It has become pioneer of the low fares model in Europe by adopting the Southwest Airline business model. Ryanair also use the best current low strategies to provide them bigger profit by extensive use of ancillary fees to balance their low ticket prices.
On 27 September 2006 Ryanair started acquiring a substantial number of Aer Lingus’s shares and by 5 October 2006 it held a shareholding of 19.16%. This prompted Ryanair to launch its first public bid for the entire share capital of Aer Lingus. The bid was announced on 5 October 2006 and the EU Commission received notification of it on 30 October 2006. Notwithstanding this Ryanair did not stop acquiring shares in Aer Lingus, in fact it continued doing so during the whole bid period and in the end, the airline had acquired an additional 6% which lead Ryanair to hold 25.17% of Aer Lingus’s share capital. In light of such operations, although there was no need for Ryanair to voice its intentions, the airline confirmed in an official statement
By continuously using this low cost model, the company celebrated its 10th birthday in the year 1995 by carrying 2.25 million passengers. Current strategy: Ryanair’s organization currently works according to three strategies namely corporate strategy (Determining what the business will be in, with the help of explicit or implicit decision rules), business strategy (Development of business and sustaining competition within the industry for gaining advantages through business) and functional strategy (decisions made and
the internet,websites, networks smart phones, hardware and software and the process of sending and and storing data. Information technology plays a massive part in Ryanair they were one of the first companies in the EU to introduce a booking program for flights via the internet using a new system called skylights this system allowed customers to use the Ryanair website to book flights and pay for them in real time since the launch of the skylights system Ryanair heavily promoted its website through the means of advertising in newspapers, radio and television as a result of this Ryanair's bookings through the internet were 96% on a daily basis since September 2004. Ryanair also launched an information technology headquarters in swords Co Dublin were 200 people are employed to monitor these transactions
After a visit to Southwest Airlines in 1991, the managers of Ryanair decided to reinforce the low-fare strategy and reduce further costs. The new strategies brought the company to the first profits in 1992, afterward traffic and profits grew steadily in the following years. (Doganis, 2006). Today Ryanair is the 2nd biggest airline in the world with 90.5 million passengers transported in 2014 (Ishak, Low-cost & Leisure Traffic, 2015). Even though after 1993 international air services within Europe were mostly deregulated after the so called Third Package of liberalisation of the sky, until 1999 the impact of low cost airlines in Europe was still very limited.