Travel Management Assignment / Sven Elmers / Topic: Ryanair 2. Company profile

Ryanair is an Irish airline incorporation with its headquarter in Dublin which operates on 729 routes across Europe and North Africa. This airline is characterized as a low-cost airline and is with a passenger volume of 50 billion per year the third largest European airline. Ryanair was founded in 1985 by Tony Ryan and at that time the airline was operating as an Irish regional carrier. In the following years the airline did not succeed in getting a bigger market share until Michael O‘Leary started taking the ownership of Ryanair in 1992. Michael O‘Leary introduced the low-cost/no-frills concept and limited the types of aircrafts to a Boeing 737 aircraft and the company discontinued to operate on unprofitable routes. Since then, the airline grew constantly and since the introduction of Ryanair-hubs all over Europe which began with the first low-cost base Dublin in 1992 and the most recent base Bremen in 2007, the passenger volume expended within nine years (1999 to 2008) from 1 to 50 million passengers per year. But not only the low-cost/no-frills concept helped the airline to get a bigger market share, also the deregulation of the European air industry back in 1992 gave EU carriers the opportunity to operate scheduled services between other Eu ropean states which was at that time a major opportunity for Ryanair. (Ryanair.com, 2008)

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Travel Management Assignment / Sven Elmers / Topic: Ryanair ANALYSIS

3. Ryanair‘s low-cost/no-frills concept

With this major opportunity for Ryanair, the focus turned to the low-cost/no-frills concept. The concept is quite simple, think like a retailer and charge passengers for everything, except the seat itself. (BusinessWeek, 2006), as a result of this there is no on-board entertainment and no pillows and blankets, etc. Ryanair can be booked only through their online booking system on their website or their directory assistance, the implemention of Ryanair in General Distribution Systems (GDS), such as Amadeus, Worldspan, Sabre and others has not been happened up until know as this also involves costs (Mintel Report. Global Distribution Systems). On-board meals, counter check-in as well as handing-in luggage are only for a fee. (Mintel Report. Low Cost Airlines - Europe)

To quote Michael O‘Leary: “Any fool can sell low airfares and lose money. The difficult bit is to sell the lowest airfares and make profits. If you don‘t make profits, you can‘t lower your air fares or reward your people or invest in new aircraft or take on the really big airlines like BA and Lufthansa.“ (Ryanair Annual Report, 2001)

Detailed table of low-cost/no-frills concept can be found in

4. Why is Ryanair voted least favourite airline?

In regard to the low-cost/no-frills concept mentioned on the first page, a likely reason could be that Ryanair is just focusing on the main point: getting passengers from an origin to any destination by excluding all extra services like on-board entertainment and meals.

“A S.W.O.T. Analysis is a powerful technique for understanding your Strengths and Weaknesses, and for looking at the Opportunities and Threats you face“ (Denscombe M, 2007).

To analyze the weaknesses and threats that Ryanair is facing from the customers point of view, the author used a S.W.O.T. analysis.

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Travel Management Assignment / Sven Elmers / Topic: Ryanair

(All references mentioned in the bibliography have been used by the author for the S.W.OT. analysis)

During research of the strengths, weaknesses, opportunities and threats of Ryanair, the author found out that there are more negative aspects than positive, eventhough the positive aspects may be stronger than the negative ones. Also the positive aspects are economical ones and the negative aspects are psychological ones. Strenghts and opportunities are mostly low-prices and a wide range of destinations, while weaknesses and threats are in the majority of cases a negative image and an intransparent price system as well as the failure of an implementation of Ryanair in GDS.

So what the author found out here, is that there is a certain balance between positive and negative aspects. In conclusion to that one can say that “customer satisfaction is in relation to customer expectation“ (Bruhn M, 2007).

If the customer just wants to go to certain destination as cheaply as possible and does not expect and “luxury“ on board then this customer‘s expectations are fulfilled but if a customer wants a cheap flight and does not care about “luxury“ it could be different. One indivi-

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Travel Management Assignment / Sven Elmers / Topic: Ryanair

dual does not expect luxury and the other one does not care about it. But “does not care“ simply means that the customer is not expecting the best on-board service in an airline he ever had but rather a certain professionality and a minimum of service (i.e. shuttle buses to the plane, flight announcements, etc). So these customers‘ expectations won‘t be fulfilled.

“In 2005 a man with cerebral palsy was charged 17 £ by Ryanair to use a wheelchair. In response to protests over the charge, Ryanair imposed a 50 pence wheelchair levy on every passenger ticket.“ (Johnson G, Scholes K, 2008)

More over, there is an immense lack of staff motivation. During research on the internet the author found a forum of an international transport workers‘ federation, where one can read through all the complaints and issues on behalf of mistreating employees on the part

(www.itfglobal.org/campaigns/messageboard.cfm)

In lots of internet forums about customer satisfaction on Ryanair, the author found a wide range of complaints about the airline. Most complaints were service, professionality of employees “The check-in lady must have had a bad day“ (German airline-review website, Translated, 2008), and the intransparent price structure. Furthermore, lots of complaints are adressing the safety of Ryanairs‘ aircrafts, as travellers may think that this is the first sector where the company will save money.

But between all these complaints there are some saying that the other complaints do exist just because these customers writing them didn‘t know what they had to expect before boarding a Ryanair plane.

“People who had never flown Ryanair don‘t know what they are talking about“

(German airline-review website, Translated, 2008) Many people try to compare Ryanair with other carrier (low-cost as well as regular airlines). But Ryanair dissociates itself from that. They are clearly pointing out that when flying with Ryanair, “the customer is paying for the seat itself only“ (ryanair.com, 2008). What the airline does not point out clearly enough is that airport check-in and each bag cost a certain amount of money, what a potential customer of Ryanair would expect to be included in the ticket price.

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Travel Management Assignment / Sven Elmers / Topic: Ryanair

The point here is that “customer‘s expectations depend on customer‘s experiences“ with other airlines (Bruhn M, 2007). This certainly does not apply to all complaints in these forums but to most complaints it does apply. Researching through these forums, the author found out that customers who flew with major airlines that are not being considered as lowcost (such as British Airways, Lufthansa, etc) have less expectations than customers who flew with other low-cost airlines (such as EasyJet, TuiFly, AtlasJet, etc) because these lowcost carrier have certain amount of service. The three above mentioned airlines depart not only from regional airports but also from international airports and also have an airport check-in as well as handing-in luggage included in the ticket price. (Except for EasyJet)

On this example one can see clearly that there is a lack of Ryanair pointing out their difference to other airlines regarding service and price structure for their customers. Further-more, to the structure of prices accrues another important factor that is a reason for Ryanairs‘ bad image. Customers can book their flight only through their website online or by calling the Ryanair hotline (no implementation in GDS). Both are not very customer-friendly as the website is known for its commercialisation, as hotel, car hire and other ads are included in the website. What the author also found out is that one can hardly find the number for directory enquiries as the number is not mentioned on the welcome page of ryanair.com. More over when researching customer services of Ryanair on the internet, the directory enquiries are known for their “non-usable information“ and for “letting customers on hold for quite a long time“. (German airline-review website, 2008)

To summarise why Ryanair is the least favourite airline, the author found out that not economical but psychological factors are a main factor of the airline not succeeding in customer satisfaction. On the other hand one has to admit that also customers‘ expectations play an important role of Ryanairs‘ overall image.

(Schmitt, B, Simonsen, A, 2002)

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