Ryanair – the Low-Fares Airline (p. 694)
Ryanair was the first budget airline in Europe, modelled after the successful US carrier, Southwest
Airlines. The case offers students the opportunity to evaluate the strategy of Ryanair against the backdrop
of the European airline industry and the burgeoning budget sector, in the face of the challenges facing the
industry as a whole and Ryanair in particular. The case also offers the opportunity to evaluate Ryanair’s
bid for fellow Irish carrier, Aer Lingus. Business students at all levels enjoy this case and relate to it, since
air travel is an activity virtually everyone has experienced and we all have war stories to tell about the
various airlines with which we have travelled. The colourful personality of Ryanair’s CEO, Michael
O’Leary is an additional point of interest in the case.
The case consists of
an overview of the Ryanair bid for Aer Lingus;
a history of Ryanair and its principal characters;
an outline of Ryanair’s operations as a budget airline and its robust performance;
a description of the challenges besetting Ryanair in 2007;
a profile of Michael O’Leary, Ryanair’s ebullient CEO;
a website supplement describing in detail, Ryanair’s battleground, the European airline industry,
as the competitive landscape continues to change.
Position of the Case
The case concentrates on how to analyse industry environments, and internal resources/capabilities of
companies and their connection to the concept of sustainable competitive advantage. In sum, the Ryanair
case illuminates how a strategy that is grounded in the best deployment of assets/resources/competencies,
whilst adding perceived value to customers, delivers sustainable strategic advantage. However, the case
also illustrates the difficulties and obstacles that stand in the way of achieving and retaining such
advantage. Important strands in contemporary thinking about strategy are brought together – the
‘positioning’ approach of Michael Porter, and the ‘resource-based’ view of Jay Barney. It delineates the
issues of balancing cost containment, pricing and customer expectations.
1. Why has Ryanair been so successful thus far?
2. Is Ryanair’s strategy sustainable?
Hints: Porter’s ‘Five Forces’ model to analyse industry structure is a good starting point, as it easily
incorporates the external influences (PESTEL) and criteria for success that face airlines in Europe, as
well as specifically those in the budget sector. Next stage in industry analysis is the evaluation of
selected individual competitors such as easyJet, Air Berlin, FlyBE and AerLingus. The final step is to
evaluate Ryanair’s strengths and weaknesses.
You are now in a position to answer the question as to whether Ryanair’s strategy is sustainable. It can
be addressed by evaluating (a) how the strategy meets customer expectations compared to competitors,
and (b) how efficiently Ryanair is delivering the strategy in comparison with competitors.
3. Would you recommend any changes to Ryanair’s approach?
Report Volume and Font Size
The number of pages in the report must be between 8 to 12 pages including the report cover page and
references. The font size should be at least Times New Roman 12 for the report content.
In addition to the hard copy report, each student must submit a soft copy of the work. The soft copy
should contain your report, and the detailed material in your quoted references.
Week 11 (Friday 15 July 2011)
Penalty of Late submission:
Within 7 days – 10% mark deduction
Between Day 8 to Day 14 – 20% mark deduction
Over 14 days – zero mark