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Strategic Management of Ryanair - Case Study Example
The airline was established in the year 1985 with 2 aircrafts and carried 82,000 passengers. In the year 1991 Michael O'Leary took charge of the airline and converted it in to a low cost airline. As per the year 2005 figures the airline had 12 bases, serving 220 routes to 95 destinations across 19 European nations carrying 27 million passengers annually…
The increased competition between rivals in the budget airline industry may lead to price wars which will greatly benefit the customers only. "This is why Ryanair has an advantage over other airlines because their policy of bundling low frills and low prices together means that they are competing for the more price sensitive customer." (Sean Brophy and Dominic St. George, 2003)
The demand for short haul flights is ever increasing in Europe. Hence it became important that Ryanair had to take all the benefits of the first mover advantages, since there are many airlines trying to copy the services being provided by Ryanair. Davy (2003) believes that "there are only two pan-European low cost operators where first mover advantage and scale and cost efficiencies gave the two largest players, Ryanair and Easyjet, a significant advantage." The fact remains that after deregulation almost 80 airlines started operating at low cost in the similar lines of Ryanair and 60 of them have since become bankrupt.
According to Michael O'Leary, Ryanair need not bother about the competitive rivalry since according to him "at the lower end of the market Easyjet and Go don't really compete with Ryanair." Ryanair had a distinct competitive advantage in being the cheapest 'no frill' carrier in the Europe. ...