Ryan Air
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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 increase in air traffic control charges. As more planes fly in the sky
Powerless to prevent introduction of duty for fuel or environmental charges: this would reduce its growth potential as it relies on price stimulation
Increasing aviation fuel prices
Threats to security
European regulations on denied boarding compensation
Secondary airports bad equipped
Distant dispatching platforms on the principal airports
Restricted comfort
Not very major range of services
Strengths:
Flexibility of the tariff policy permitted by a yield powerful management:
Under the terms of a very elaborate tariff policy resulting from a yield powerful management, the profit on a flight starts beyond 50%, the prices of the last seats, bought before the departure, are identical to the tariffs applied by the regular companies (when the plane arrives at full capacity). This flexibility made it possible to limit the impact of the increase of the price of the kerosene, by the means of the reduction in the number of places actually sold at reduced price. Moreover, the minimum load factor (station-wagon even load Factor) to reach the dead point is much lower for Ryanair than for the traditional companies.
Quality of the consumer service:
Good punctuality, loss of luggage very weak, cancellation of flight little attends. The conveyor proclame itself to be the company number 1 in 2005 as regards punctuality, that due to the fact that it serves only small regional airports, cheaper and is congested, which not only make it possible to guarantee punctuality, but also to increase the rotation of the planes.
Stock exchange, financial performance:
The growth is a necessity for Ryanair. Indeed, the structure of costs of these companies can be maintained only if it is supported by a strong growth. Its stock exchange capitalization