Ryan Air
Ryan Air
SWOT ANALYSIS
Strengths :
Brand name: Ryanair through its 14 years in the LCC market has developed a very well recognised Brand name.
Benefits from low airport charges: these aid the low base Ryanair benefits form
Has first mover advantage on regional airports: acts as a barrier to entry
Internet site (94% booking) www.ryanair.com: lowers the cost of distribution as over the phone booking are more costly. Eliminates the need of travel agents
High seat density
All Boeing aircraft: a uniform fleet saves on maintenance and training costs
Fast turn-around
High service performance: punctual, high rate of flight completion, low baggage loss, these give a good image of the company’s reliability.
Modernised fleet which leads to less expensive maintenance: will become more uniform with only one model (737-800), also newer planes will require less maintenance.
High aircraft utilization: Ryanair flies its planes for longer thus generating more revenue from its assets.
Fuel and other risks hedging
Small headquarters: low on over beads
Point to point: no hub and spoke, lowers cost as no through services required
Leading low cost airline
Strong revenue growth
Business strategy
Air Lingus possible acquisition
Weaknesses:
Prone to bad press: Ryanair is perceived as arrogant and the slightest incident gets a lot of press coverage.
Niche market: restricted expansion possibility
Distance of some regional airports from advertised destination: over time customers may find this a big inconvenience.
Poor service: people, skills.
Ryanair is extremely sensitive to changes in charges (increase in fare value)
Weakening employee relations
Lake of scale
Opportunities:
EU enlargement: there will be a lot of new destinations opened up
Still potential to capture market share: The LCC market share could more than double
Benefits from less exposure to geopolitical risks: as only really operates in Europe
Economic slowdown actually helps Ryanair: change in corporate culture, �steals’ customers from traditional carriers as they seek lower fares
Launch of new routes
Fleet expansion
Global airline market
constant increase in the network
many acquisitions and fusions
increase in the traffic in the future (+25% for 2015)
development of the booking by Internet
Threats:
Dependence on oil markets: fuel costs depend on the oil market
Dependence on economic cycle
Increase of low fare competition
European court decision: this may make expansion more difficult and costs rise in the future
Limited growth on the South European market
Regional airports gain bargaining power for “second round”
Customers are very price sensitive
Raynair and EasyJet limit one another’s growth “rout wise”, need for peaceful co-existence, or routes could become battleground
Face