How does Ryanair use its supply chain to keep cost down and how does this emphasis on cost control affect its relationship with the end customer?
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Module Name: Operations Management
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Deadline: 6 February 2012
How does Ryanair use its supply chain to keep cost down and how does this emphasis on cost control affect its relationship with the end customer?
Introduction
In the 1980’s the first low cost carriers started expanding their operations into mainland Europe. Previously the concept of flying from London to Barcelona on a regular basis would have been very costly and timely on the incumbent scheduled carriers. The emergence of new low cost carriers transformed these and other routes. The airline industry and the legacy carriers soon realised that competition for custom had been taken to a new level.
Ryanair started flying in 1985 with a single fifteen seater aircraft flying from Ireland to London, by March 2010 the company had recorded revenues of $4223.4 million and operating profits of $568.3 million (Datamonitor 2010). Ryanair had proved that low cost carriers can post creditable financial data.
The sustainability of the Ryanair product can be accredited to many factors which include; labour productivity, use of secondary airports, a policy of outsourcing, robust route networks and a strong emphasis on cost control.
This paper will look at the Ryanair supply chain and how it is utilized to drive down cost and therefore price for its end consumers. Debate continues about the strategies Ryanair uses to keep expenditures down whilst servicing its 73 million customers (Ryanair.com 2012) this paper will also look at these apparent tensions.
How is the ‘marketing promise’ operationalised into the working of Ryanair’s service delivery system?
A considerable amount of literature has been published on the way Ryanair has chosen to market its business. They have chosen a marketing standpoint which is rarely copied in the airline industry. Whilst this cannot be linked to directly to its handling of the supply chain it
Student Number:
Module Name: Operations Management
Module Code:
Deadline: 6 February 2012
How does Ryanair use its supply chain to keep cost down and how does this emphasis on cost control affect its relationship with the end customer?
Introduction
In the 1980’s the first low cost carriers started expanding their operations into mainland Europe. Previously the concept of flying from London to Barcelona on a regular basis would have been very costly and timely on the incumbent scheduled carriers. The emergence of new low cost carriers transformed these and other routes. The airline industry and the legacy carriers soon realised that competition for custom had been taken to a new level.
Ryanair started flying in 1985 with a single fifteen seater aircraft flying from Ireland to London, by March 2010 the company had recorded revenues of $4223.4 million and operating profits of $568.3 million (Datamonitor 2010). Ryanair had proved that low cost carriers can post creditable financial data.
The sustainability of the Ryanair product can be accredited to many factors which include; labour productivity, use of secondary airports, a policy of outsourcing, robust route networks and a strong emphasis on cost control.
This paper will look at the Ryanair supply chain and how it is utilized to drive down cost and therefore price for its end consumers. Debate continues about the strategies Ryanair uses to keep expenditures down whilst servicing its 73 million customers (Ryanair.com 2012) this paper will also look at these apparent tensions.
How is the ‘marketing promise’ operationalised into the working of Ryanair’s service delivery system?
A considerable amount of literature has been published on the way Ryanair has chosen to market its business. They have chosen a marketing standpoint which is rarely copied in the airline industry. Whilst this cannot be linked to directly to its handling of the supply chain it
References: www.heraldscotland.com (2009) Ryanair pulls out of Manchester in row over charges http://www.heraldscotland.com/ryanair-pulls-out-of-manchester-in-row-over-charges-1.916844. (Accessed December 15 2011) Hoffer Gittell, J & Bamber, G.J McCormack, T (2010) Understanding costs using the value chain – A Ryanair Example. Accountancy Ireland Vol 42 No 5 p28-30 Meredith, J.R Ryanair Holding PLC (2011) Company Profile information published by Datamonitor London Slack, N., Chambers, S