Ryanair: Revolutionizing the Airline Industry
Ryanair: Revolutionizing the Airline Industry
Isuru ‘Nimesh’ Wickramasinghe
AVIT 423
St. Cloud State University
Novermber 17th 2011
Europe’s new low cost airlines are growing at an exponential rate, taking over market share from the big traditional airlines and some of them such as RyanAir is carrying more passengers than the British Airlines (Dr. Dennis). Trends in the past 2 decades have all shown of a constant and almost fierce growth in these low-cost airlines and it looks like they will continue this growth. The world is becoming more open for trade with international trade barriers falling at a steady pace and this has much to do with the growth of these new airlines. An easy to see example can be seen clearly when comparing the growth of these airlines in comparison with the expansion of the EU in 2004 (O 'Sullivan, 2005). The enlargement of the European Union on 1 May 2004 gave RyanAir and other low-cost airlines to tap into the markets of the EU accession countries and within less than a year RyanAir ordered another 70 Boeing 737-800’s and forecasted to increase its passenger numbers from 34 million in 2005 to 70 million in 2011, more than doubling its passenger numbers in just 7 years after being in business for 20 years (Noak, 2011). This trend in growth can be compared to when the new airlines with innovative business strategies entered the market in the US after the deregulation of the industry in 1978. A safe bet to make with these airlines is that not all of them will survive in this strategy as it is the case in the US. With Southwest being the most successful by far in the low-cost strategy and others failing at some point. It can be seen happening right now in the European market where the UK and Ireland markets are being saturated and the new entrants may not survive.
The profitable advantages low-cost carriers enjoy over the traditional carriers range from cost cuttings in aircraft design to the services they provide. For example
Isuru ‘Nimesh’ Wickramasinghe
AVIT 423
St. Cloud State University
Novermber 17th 2011
Europe’s new low cost airlines are growing at an exponential rate, taking over market share from the big traditional airlines and some of them such as RyanAir is carrying more passengers than the British Airlines (Dr. Dennis). Trends in the past 2 decades have all shown of a constant and almost fierce growth in these low-cost airlines and it looks like they will continue this growth. The world is becoming more open for trade with international trade barriers falling at a steady pace and this has much to do with the growth of these new airlines. An easy to see example can be seen clearly when comparing the growth of these airlines in comparison with the expansion of the EU in 2004 (O 'Sullivan, 2005). The enlargement of the European Union on 1 May 2004 gave RyanAir and other low-cost airlines to tap into the markets of the EU accession countries and within less than a year RyanAir ordered another 70 Boeing 737-800’s and forecasted to increase its passenger numbers from 34 million in 2005 to 70 million in 2011, more than doubling its passenger numbers in just 7 years after being in business for 20 years (Noak, 2011). This trend in growth can be compared to when the new airlines with innovative business strategies entered the market in the US after the deregulation of the industry in 1978. A safe bet to make with these airlines is that not all of them will survive in this strategy as it is the case in the US. With Southwest being the most successful by far in the low-cost strategy and others failing at some point. It can be seen happening right now in the European market where the UK and Ireland markets are being saturated and the new entrants may not survive.
The profitable advantages low-cost carriers enjoy over the traditional carriers range from cost cuttings in aircraft design to the services they provide. For example
References: O 'Sullivan, J. (2005, June 22). Ryanair sticks to 10% growth forecast. Irish Times. Retrieved from http://www.irishtimes.com/newspaper/finance/2005/0622/1118963289362.html Noak, T. (2011, November 17). Ryanair - details and fleet history [Web log message]. Retrieved from http://www.planespotters.net/Airline/Ryanair Halstead, J. (2004, February 15). Ryanair 'to cut frills further '.BBC NEWS. Retrieved from http://news.bbc.co.uk/2/hi/business/3489761.stm Dr. Dennis, N. (n.d.). Boom or bust? the future of the low-cost airlines in europe. Informally published manuscript, Transport Studies Group, University of Westminster, Retrieved from http://www.etcproceedings.org/paper/boom-or-bust-the-future-of-low-cost-airlines-in-europe