Ryanair Strategies

III) What are the Ryanair strategies to overcome competition ?

Ryanair is the lowest-cost airline in Europe. The company knows how to manage to maitnain its cost down despite the presence of other low cost airlines in Europe flying the same destinations.

The main source of competitive advantage of the company is its ability to drive down costs to sustain profitable low fares.

- First, the airline’s fleet is composed of one type of aircraft : Boeing 737-800

Ryanair’s initial strategy for controlling aircraft acquisition costs was to purchase used aircraft of a single type. From 1994 to 1998, Ryanair purchased used Boeing 737-200A aircraft that were, at the date of purchase, between 11 and 17 years old. In the late 1990s, however, there was a significant reduction in the number of such used aircraft available for purchase in the market. Accordingly, in March 1998, Ryanair announced that it would start purchasing new Boeing 737-800 “next generation” aircraft sharing certain basic attributes in common with Ryanair’s fleet at that time. As consequences, the purchase of aircraft from a single manufacturer enables Ryanair to limit the costs associated with personnel training, maintenance and the purchase and storage of spare parts, as well as affording greater flexibility in the scheduling of crews and equipment.

- Second, except for its activities in Dublin Airport, Ryanair contracts out aircraft handling, ticketing, baggage handling, and other functions to third parties.

Ryanair is able to obtain competitive rate and multi-year contracts at fixed price , limiting exposure to cost increases. Outsourcing these activities limits Ryanair’s direct exposure to employee reletion responsibilities and potentional disputes that could have bad affect on its activity because of potential strikes, and make Ryan loose customers and so on...

- Ryanair does use congested airports

Airport charges generally includes landing fees, passenger processing fees, aircraft parking fees, noise surcharges, and any other fees related to the use of airport infrastructures. In order to reduce all these fees, Ryanair avoids congested main airports and chooses to fly to secondary, regional, major population centers, and travel airport destinations which are very interested in increasing passenger

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