Ryanair: The Low Fairs Airline – Always Getting Better?

Organizational strategy development is not easy to navigate since it involves ambiguity and complexity at every stage of the strategy execution process. For instance, constructing the strategies involves applying either prescriptive, deliberate, or emergent approaches (Ul Musawir et al., 2017). Thus, before putting the plan into action, the prescriptive approach stresses the purpose, vision, and underlying principles and articulates the objectives. This strategic technique is also hierarchical in structure, defining the command-and-control style of administration (Lee & Edmondson, 2017). Additionally, various reasons motivate firms to use the organizational strategy technique, including long-term strategic thinking, allowing team members to learn from one another, coordinating activities, and ensuring a plan that provides adequate organization (Lee & Edmondson, 2017). This approach is evident at Ryanair when guaranteeing that the organizational strategy emergent system ensures the making of strategic and operational decisions periodically, resulting in a reliable pattern of behavior (Johnson et al., 2020). Similarly, when the Ryanair corporate environment changes, the strategies allow more flexibility and adaptation, ensuring resistance to change and the ability to capitalize on opportunities via such tactics. It is a better possibility of strategic success and employee motivation eventually.

Customers acknowledged Ryanair as one of the most popular airlines globally and a successful international career in 2013. The company has stayed loyal to its low-cost and low-fare strategy (Johnson et al., 2020). Ryanair’s ways to find the optimal balance between emergent and prospective strategies are the following: Ryanair’s first tactic is setting the fares and routes. For example, the corporation benefits ethical leisure and business passengers by managing the cheap price plan (Johnson et al., 2020). Additionally, pricing the newly introduced routes competitively ensures carriers maintain an efficient operating profit due to the working environment of high fuel costs, reduced seasonal returns, and expensive airport or tax expenses (Johnson et al., 2020). The airline has implemented a policy of winterizing a section of its aircraft.

Ryanair’s other strategy is operating at a low cost to its customers. Low-cost processes influence Ryanair’s strategy design, with several factors contributing to implementing the low-cost cornerstone concept (Johnson et al., 2020). In addition, according to the company, Ryanair makes use of its aircraft fleet to maximize the balance between current and future projects. With the advancement of technology, the Ryanair airline is constantly expanding and improving its fleet to introduce new routes and purchase more fuel-efficient planes. It is advantageous to buy airplanes from the same supplier to maintain long-term ties and cost management. Another strategy that Ryanair employs to optimize balance is to reduce the cost of landing at the airport. This year, Ryanair cut its expenses via cost reduction, avoiding crowded large airports, and picking rural locations keen to boost customer satisfaction. Ryanair’s last technique is to reduce personnel expenses while simultaneously increasing productivity (Johnson et al., 2020). This approach entails improving both growth and product, which enables the business to employ more people while still contributing to the airline’s success. Ryanair declined to recognize the trade unions and engage with the employees on issues like working hours, compensation, and ERC systems since the employees were working on long-term agreements with the firm.

Performing an analysis of the strategies guaranteed that the Ryanair airline maintained a mix of prescriptive and emergent organizational strategic methods that utilize the techniques that ensure the airline’s growth while also managing personnel development and advancement (Johnson et al., 2020). Increased reliance on the internet and technology saves expenses and provides better management of the passenger process. The auxiliary services have greatly improved its financial position, enabling it to devote more resources to future passenger growth. The firm’s annual report for 2015 indicates the business’s sustained growth following the strategies and tactics used by the company.

Michael O’Leary was a task-oriented leader whose drive focuses on completing his tasks. The position tasks included capitalizing on marketing possibilities, generating efficiency, and ensuring that the stakeholders received the highest return possible (Johnson et al., 2020). The leadership quality shown by this leader, Michael O’Leary, is quite successful and performs exceptionally well when combined with the other traits and with the individuals under his supervision. In the past, Michael O’Leary has been able to achieve everything he wants because he is a brilliant leader or manager who has just focused on what he desires.

Although Michael O’Leary is a perplexed leader, his team members are content with his leadership style. They recognize he is authentic and can motivate and energize others. When Michael O’Leary is around, there is an extraordinary spirit in the office. Michael O’Leary’s public-seeking antics were unequaled; he earned many adversaries due to his conduct; many dubbed him the messiah while others dubbed him arrogant owing to his brash manner (Johnson et al., 2020). Although the CEO’s performance and demeanor dissatisfy the investors, they fear his leaving the firm. However, the moment has come to choose a youthful and competent leader capable of enhancing the company’s image.

The airline’s lowest unit cost is one of its primary assets of Ryanair. Ryanair prices are lower than those of any other airline operating internationally. CASK quantifies the charges, the cost per seat, and the cost per passenger (Madar, 2018; Narcizo et al., 2020). CASK is a frequently used unit cost metric in the aviation sector. Another advantage is that the price of capacity creation and traffic charges is also lower than competing airlines. Additionally, the airline’s low-cost management enables it to provide very cheap fares on a profitable basis. Many rivals operate long-haul routes, compelling any short-range specialist such as Ryanair Airlines to offer average pricing. After incorporating additional services, Ryanair’s average revenue per passenger is lower than that of rivals. Another asset of the corporation is its propensity to innovate; apart from Easy Jet, no other airline has done more to alter the character of short-distance flights than the concerned airline (Wohlbrück, 2017). The airline’s low-cost revolution imitates its business model, but the first act of copying is what contributes to the company’s success.

One of the airline’s flaws is that it has exaggerated its success in meeting customers’ immediate demands. They offer safe air travel at a reasonable ticket and a high degree of punctuality (Adnan, 2019). As a result, since short-haul tourists need a low-cost carrier, the brand has poorly scored in various surveys and awards. Another concern is that Ryanair’s earnings are seasonal (Adnan, 2019). For example, earnings growth throughout the summer, particularly from July to September, and decreases during the off-season, which begins in October and lasts until March.

One of the opportunities is to improve the passenger experience. For instance, the airline announced plans for redesigning the company’s whole website by making it more appealing where it requires the passengers to make just a few clicks while booking their trips (Cook & Billig, 2017). The transition began in 2014, and the market’s earnings demonstrate the improvement. If Ryanair continues to consider this, the firm has the chance to grow its business practices and management of the company’s performance in the coming years. Additionally, the company always has the option to increase sales by proactively improving the business traveler experience by offering a bundle of various benefits for a single charge (Wohlbrück, 2017). Finally, expanding the fleet with new and more technologically advanced aircraft will ensure that they have the best fleet possible to serve their customers.

The diversion of management attention away from the company’s fundamental skill of assuring safe and on-time short-distance air travel at a low cost represents a threat to Ryanair. For instance, this management detour jeopardizes the airline’s reputation (Kahungu, 2019). Additionally, another threat aspect to consider is the competitive response. The company’s attempts to enhance the product’s and brand’s image to attract more business travelers impact the competition.

The airline, created in 1985, has grown significantly over the years. Although it did not perform well at first, Ryanair became one of the most successful airlines in the 1990s due to the company’s transformative approach (Geary, 2021). Similarly, Michael O’Leary’s vital resource planning and leadership have proved to be a turning point for the corporation, assisting the airline in developing and implementing cost control initiatives. These techniques include cost management, avoiding gasoline surcharges, and lowering the company’s operating expenses. Additionally, the administration has dealt with the accusations of the Ryanair agenda by combining several measures that secure the company’s profitability (Geary, 2021). However, the organization encountered several roadblocks along the way to success. Developing the strategies and action plan made Europe’s lowest fare airline feasible to operate efficiently. The carrier flies short-range flights to decrease aircraft equipment costs by using a single model of aircraft that is subsequently modified to satisfy the customer and the corporation’s demands due to fierce competition (Temirkhanova, 2020). Additionally, Ryanair assures rewards for its employees by enabling them to boost productivity via productivity-based incentives and on-board sales incentives for cabin crew, which in turn contribute significantly to the company’s success.

The airline possesses the potential to change the difficulties it has encountered over the years, which were not simple to overcome. For instance, some obstacles include controlling fuel costs, pricing new aircraft, reliance on key personnel, and increased corporate tax, among other concerns affecting how the airline operates (Abdul-Kadir et al., 2020). Thus, management must ensure that they use the appropriate data collection to address the situation to react to such issues. Additionally, positive answers to such crises and difficulties strengthen leadership, as seen by Ryanair CEO Michael O’Leary’s presentation of a strong personality. Further, the corporation goes beyond by reacting to issues via innovation and transformation inside the organization (Johnson et al., 2020). Michael O’Leary pulls employees together and creates an environment where they can give their all to their responsibilities and contribute to the airline’s success by making things simpler for the airline and ensuring its success. Besides, cost-efficient techniques, lower-priced flight seats, and good passenger service ensure that clients are satisfied with the airline. Additionally, adopting sustainable practices enables cost management and builds a favorable image of the business in the eyes of consumers (Budd et al., 2020). Lastly, strategic growth, strong leadership, proactive personnel, and other long-term initiatives all contribute to the company’s success.

Porter’s five forces model is the most suitable instrument for assessing an organization’s external environment. According to this concept, competitiveness does not develop from new rivals but from various other variables, including the threat of new entrants, consumer bargaining power, supplier negotiating strength, existing rivalry industries, and the danger of replacement services or goods (Gerard, 2022). Porter’s five factors will assess the dynamics affecting the European low-cost airline business and how they have impacted Ryanair.

In every sector, new entrants offer innovation and the ability to capture market share. The threat’s effect is determined by the entry restrictions to a particular industry. The higher the entrance barriers, the less danger established players will face. Customer loyalty is a significant barrier to entrance, as are economies of scale, substantial capital expenditures, government laws, the need for accumulated experience, and restricted access to distribution channels (Isabelle et al., 2020). New entrants’ dangers in the European low-cost airline market are mild. This is due to the funds necessary to launch an aviation firm dedicated to aircraft acquisition. New entrants need insurance, licenses, and distribution channels, which are challenging to get for a brand unfamiliar with the aviation business. However, deregulation allows new entrants to the European aviation market to establish a presence by giving many incentives (Ison, 2017). Ryanair’s successful debut into the European aviation market as a low-cost carrier facilitated the introduction of cost-cutting and creative business models and stiff rivalry with established carriers like British Airways.

Each organization requires vendors for the acquisition of products and services. The negotiating power of suppliers examines an organization’s influence and leverage over its suppliers in terms of price increases (Caputo et al., 2018). It decreases, diminishes, or raises the quality of products and services—the fewer suppliers in a sector, the greater the supplier’s negotiating strength. As a result, firms should maintain a pool of suppliers to stay lucrative in the marketplace. Suppliers’ negotiating strength in the European low-cost airline business is moderate to substantial. Aviation firms are primarily reliant on the quality of their aircraft and fuel. The company does not control gasoline costs since the external environment influences them (Ab Yajid et al., 2020). On the other hand, Airbus and Boeing have considerable negotiating leverage due to their superior quality. Ryanair is the largest purchaser of Boeing aircraft in Europe, and as a result, Boeing has a soft spot for Ryanair, providing aircraft at a discount to market prices.

The buyer’s negotiating power indicates the buyer’s ability to exert pressure on the organization, affecting the price and quality of the organization’s goods. Buyers have considerable negotiating power in the European low-cost airline business (Efthymiou, 2021). Customers may now compare the fares of other organizations thanks to the advancement in internet technology. Since Ryanair operates in the cheap airline industry, the sector lacks brand and customer loyalty. Any business that provides a lesser fare will attract the most people. As a result, the cost of switching consumers is almost negligible in this case. If another airline offers a better deal than Ryanair, consumers will abandon Ryanair, ending in the airline’s demise.

In the aviation industry, the danger of substitutes is negligible. Within Ryanair’s European cheap airline, there are a variety of alternative modes of transport accessible to move consumers between short-haul routes, including automobiles, trains, and buses, to drive consumers between short-haul routes kept (Schütz & Schrefl, 2017). Train travel is expensive in Europe, and it also takes longer than flying. Ryanair addresses this problem by offering low, fair rail prices and encouraging passengers to utilize their services rather than other modes of non-flying travel. This demonstrates the minimal danger of replacing Ryanair in the European cheap airline business.

This force assesses the level of competitiveness in the relevant market. Competitive competition defines the number of competitors in the market and each competitor’s capacity. Numerous aviation organizations operate on comparable routes to Ryanair in the European Budgeted Airline industry. Among these airlines are Easy Jet, Wizz Air, and Go (Ahmed et al., 2019). It is difficult for low-cost carriers such as Ryanair to cover all routes at low fares; thus, every aviation company is developing techniques to cut operating costs by decreasing passenger amenities. All these factors reflect the very competitive climate in which Ryanair operates.

The competitive strategy describes the strategic plan to get a competitive edge over its present competitors in the marketplace. The firm’s competitive strategy attempts to establish a defensive position in the relevant ma to generate and build a better Return on Investment (Lawton, 2017). There are four competitive strategies: cost leadership strategy, differentiation strategy, cost focus strategy, and differentiation focus strategy (Harvey & Turnbull, 2020). Cost leadership strategy is the most common of these.

The activities that have taken place at Ryanair demonstrate the integration of the cost leadership strategy. The firm offers the most affordable airplane transportation service available, and it has transported over 42 million people in 18 countries across the world at the lowest possible cost (Abardeh, et al., 2022). Ryanair solely runs the Boeing 737, which allows the company to lower its operating costs significantly. Mechanical engineers do not need additional training due to the organization’s use of a single aircraft model, which reduces the organization’s operating costs. Ryanair is familiar with its clients, and they have recognized those who are price concerned as being among them. The organization’s cost leadership approach is the organization’s second principal component, which is the use of less expensive secondary airports (Rodríguez-García et al., 2020). The organization can lower the cost of staying at bigger airports because of the lower price of flying to smaller airports.

The term “differentiation strategy” refers to the process of being distinct in a particular market. For example, Ryanair distinguishes itself from the competition via its website development (Nagle & Müller, 2017). When consumers buy tickets, they can select all the services they want to use on their flight. This service makes the organization’s goods and services more distinguishable from those of its rivals due to this service. Moreover, according to Ryanair, their success and achievements are not just due to their cheap rates but also to a winning mix of customer service and their new Boeing 737-800 airplanes (Grampella et al., 2017). Consequently, Ryanair’s differentiation approach assists the firm in gaining a competitive advantage in the marketplace. The price strategy serves as the foundation for the organization’s differentiation strategy. As a result, the organization has attracted many customers in the aviation industry because of its low fare prices (Baum & Auerbach, 2017). Additionally, the organization’s approach to attracting clients is distinct. It focuses on customers eager to travel at any cost, whether business people, individuals, or family members.

In 2018, Ryanair unveiled the “Always Getting Better” initiative, which aims to enhance the overall customer experience of the airline. There were many new initiatives in the plan during the launching, including the price promise, which states that if the client discovers a lower ticket, the organization will return the price difference, plus an extra EUR 5, to the customer’s account (Griffith & Roberts, 2021). Furthermore, there is a dedication by the Ryanair organization to long-term sustainability via the Always Getting Better strategy, which includes a goal to reduce the use of non-recyclable plastics in the organization’s everyday operations over the next five years. As a result, there is a requirement for the customers to offer biodegradable coffee cups, wooden cutlery, and the removal of plastics from the in-flight items when onboard the aircraft (Bramen, 2018). The firm also develops a program that enables clients to reduce their carbon footprint by making charitable gifts over the internet. The Ryanair company’s Always Getting Better strategy includes a digitization initiative to convert the organization into the Amazon of Travel in the European Aviation industry. Taking into consideration the organization’s long-term sustainability plan will make this achievable.

In the previous ten years, there has been significant growth in rivalry in the aviation industry. According to forecasts, the withdrawal of regulatory measures from the aviation industry would result in more competitiveness for future growth. Several firms have attempted to join the aviation industry (Dobruszkes et al., 2017). Still, they have failed due to ineffective marketing methods and the long-term position that the current players in the aviation sector have established for themselves. Most Ryanair’s passengers are price sensitive and seek low-cost flights, which is especially important during economic hardship. The corporation has thus chosen a low-cost approach to attract money-conscious consumers such as families, business individuals, and groups looking for economical and dependable airplane transportation. In terms of financial performance, the strategy the company selects assists the organization in reaching its strategic objectives and goals (Mendonça, 2020). Therefore, the company succeeds in lowering its operating expenses and its overall costs of operation. Consequently, to analyze the growth strategies used by Ryanair, it is necessary to study the Ansoff Matrix, which specifies the system implemented by the organization for new product and service markets (Chat, 2017). According to Ansoff Matrix, Ryanair has chosen the four strategic development options of product development, market penetration, diversification, and market development as part of its overall business strategy.

In this context, sales of new items in the present marketplace where the business is functioning are market penetration strategies. Ryanair must convert current customers into new ones to generate extra income via offers such as discounts and family benefits to achieve market penetration (O’Connell & Connolly, 2017). The business’s initial focus was on expanding and preserving the market share of its existing goods. Because of this, the firm has assured giving choices such as cheap pricing, sales promotion, advertising, and growing client happiness while maintaining a positive reputation. Ryanair is continually introducing new customer programs, such as loyalty programs, that assist the firm in familiarizing clients with its goods and services and increase customer retention (Caridá & Bonizio, 2018). For instance, to achieve more market penetration, Ryanair’s marketing strategy focuses on generating frequent offers for its current clients, which results in the business spending less money on new market research.

To deliver goods or innovative solutions to various new targets, organizations, or groups of firms, putting market development strategies in place is essential to help achieve this goal. According to Ryanair, the company has spotted an opportunity to study the market in the newest European members to expand its present offerings to new clients (Johar et al., 2020). Consequently, Ryanair has made extraordinary efforts to expand its market presence into new geographic areas to achieve this goal (ContentCal, 2022). Similarly, the firm has emphasized introducing new goods and distribution channels into the marketplace, where Ryanair employs low-cost techniques to attract clients and further market segmentation.

The organizational plan for introducing innovations into the marketplace is a product development strategy. The product development strategy refers to upgrading present goods while also utilizing the current market or generating new items responding to client requests. Recently, the demand for existing interests in the aviation sector has decreased due to a reduction in supply (Dvorak & Razova, 2018). As a result, Ryanair has concentrated on developing new goods and capabilities and modifying its existing services and products in response to market demands. When discussing product development, Ryanair alludes to the fact that the company must identify those clients who are hesitant to use airline services. Following the identification of such consumers, Ryanair investigates whether these customers continue to use airline services despite the lower costs (Klarin, 2019). That is, product development strategy dictates that Ryanair concentrate on building new capabilities via research and development on the modification of current goods and services in a manner that would attract more consumers, according to the company.

The term “diversification strategy” refers to the approach used by a company to expand its operations and increase its profits. Essentially, it is about entering a new market where the company is not presently present while also generating new goods for that market. When it comes to developing a competitive advantage for the firm, Ryanair has completed its diversification strategy (Madar, 2018). Even though Ryanair does not give complimentary beverages and snacks on flights, it does provide passengers with the option to purchase meals onboard. This is done on the website, allowing consumers to pick the services they want to use in advance. Ryanair’s website has emerged as a potential source of revenue for the corporation in recent years (Vico, 2018). It represents Ryanair’s successful diversification strategy, which has helped the airline enhance its profitability.

Following a thorough examination of Ryanair’s business model, the best recommendation is that the company should expand the number of flights it offers to customers. There is still a great deal of space for development in the organization’s ability to exploit new markets by providing long-distance flying services (Vico, 2018). The company may increase its market share in the global aviation industry if it takes advantage of new markets in North Africa, Turkey, and Eastern Europe. Organizations need to make sure that all reservations are strictly accessible via the organization’s official website (Vico, 2018). During the first phase of long-distance flight operations, it will assist the organization in lowering operating costs.

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