The Biggest Strength of Ryanair

STRENGHTS:

The biggest strength of Ryanair is the company's low fares.

Founded in 1985, Ryanair is the first European company introducing low fares, no frills

and point-to -point routes to smaller airports. Its strategy is to stimulate demand,

particularly from budget-conscious leisure and business travelers who might have used an

alternative transport.

The company maintains low fares and profitability by vary careful management.

First of all, it cuts the costs by eliminating non-essential extras, such as in-flight meals,

multi-class seating, complimentary drinks, etc. Except cutting the costs, it gives priority

to features more important to the clients , such as more frequent departures, advance

reservations and baggage handling, and consistent on time services. All this gives a

chance to Ryanair to increase the number of routes, initializing additional UK-Ireland and

new intra-UK routes, and to increase the frequency of services on existing routes.

All these changes provide good image and efficiency of the company which can be

categorized as one of its most important strengths. The customers are given fast service,

regular flights with rare delays to many destinations, point-to point with no hubs for a

very low price.

As Ryanair is the first company in Europe offering such service and it has been on

the market for many years, its brand name is a big advantage as it is very well

recognized all over the continent.

Ryanair holds very substantial share of the market and that is why it is in position of

negotiating lower airport charges, which contributes to its low prices. Another reason is

the fact that the company uses smaller airports which are situated further from the cities,

but provide higher rates of on-time departures, faster turnaround tomes and fewer

terminal delays, but maximizing aircraft utilization.

Strength is the company's fleet commonality. Thus the company saves maintenance

and staff training. In 1998, Ryanair ordered 45 new Boeing 737-800. The old aircraft

entailed higher maintenance and were less fuel efficient. The new modernized fleet not

only requires less maintenance, but has longer life expectancy and gives the customers

more security and the company better image for the competition. Excellent quality and

safety is ensured by the fact that Ryanair contracts out the heavy maintenance and

engineering to third parties which have the necessary expertise and experience.

Ryanair has very small but efficient headquarters. There is a centralized

reservations center which can be accessed by anyone from UK and Ireland for the price

of a local call. It enables several services, such as travel insurance, car rental, etc.

Ryanair advertises its own fares on its own website which simplifies the way the

customer makes his own booking and more than anything eliminates the need of travel

agent which helps maintaining the lower cost of fares.

WEAKNESSES:

One of the problems Ryanair might face is the poor service and particularly the

fact that it uses secondary and regional airports, which are situated further from the cities.

Another disadvantage is the fact that there is no loyalty among the customers who are

very price sensitive. Therefore the company is extremely dependent

on factors as oil

prices, competitor's prices.

I would consider the dependency on EU legislation as a weakness as well. For

example , EU abolished duty-free sales on intra-EU travel from 1999, contending that it

was a tax distortion. It reflected on the company's revenue and flight attendants'

incentives.

Many of Ryanair's contracts with airports were for five year period which insured

the company against eventual rise in charges, but the EU legislation prevents airports

from offering different deals to different airlines, which had an undermining effect on the

previous negotiations for the company.

The delayed entry into the European Monetary Union has been problematic for

Ryanair as most of the transactions in Europe mainland were in euros. Despite that it

engaged in foreign currency exchange hedging in transactions which contributed to the