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Analysis Of European Airline Industry

3723 words - 15 pages

AN ANALYSIS OF BUDGET AIRLINE- ‘RYANAIR’

Module Name: Management and Strategy
(MBA INTERNATIONAL)
Module Reader: Claire Devlin
Student Name: Varghese Jacob
Student Number: 8202730
Date: 16/03/2007

Introduction
Air line Industry can be called as one of the biggest industry in the world. In that huge industry European Airline industries part is very high. European Airline industry consists of two sectors mainly Main stream and Budget Airlines. The budget airline sector is becoming a great threat to the main stream airlines in these days. Among the Budget Sector Airlines Ryanair is the most established one. Here the essay is mainly dealing ...view middle of the document...

The effect of that tragedy really affects the airline industry. This had lead to rising of ticket fare and stock plummeted. From that time onwards every airlines were cutting the number of short routes and European journey cost also become too high.

Low cost carriers however have got a chance to perform better that could run with consumer’s confidence and remained cost effective. Budget Air lines of Europe like Ryanair and Easy Jet were really making their market in the Airline Industry. They really capture a growing share in the aviation industry and were the only operators to make profit. The Budget airlines were making inroads not only on the territory of mainstream airlines but they have made a huge impact on charter airlines and car ferries.

The key factor lead to the success of low fare strategy is dependent on the maintenance of a low cost base. On the other hand falling passengers volume scar ferries are blamed on the availability of low fare flights. The style of competition with in the budget airlines gives us an idea that winner takes all dynamic favours. The main factor is that most budget airlines lose money or are eventually take over.Inspite of all that the early entrants like Ryanair and Southwest were really getting more and more benefits as time passes.

At that time the competition between the budget Airlines were getting more and more furious. .The competition leads to the formation of a bad episode between Ryanair and Go air. The head to head competition is really damaging the entire Industry. The mainstream carriers such as British Airways, Lufthansa, Scandinavian Airlines and BMI have reacted in number of ways. The have made lot of changes with in themselves by decreasing cost on domestic flight. Some of them even planned to extend this low cost model to the international flights and take on the budget airlines. The European Commission also threatens the budget airlines because of an impending imposition of a ‘climate protection charge’ on aircraft taking of and landing in the European Union.

In response to the European union’s issues Ryanair promoted the formation of a budget airline lobbying group named European Low Fares Airline Association .In that worse time also Ryanair is maintaining high margin It is believed that Ryanair will continue to lower cost which will enable it to persist lowing fares aggressively. Ryanair bluntly fought its way to the market with an aggressive pricing strategy. No frills trick really hit the nerves of EU passengers. Ryanair no frill strategy does not mean a cut in cabin crew, but also allows for a faster pre- flight preparation thereby reducing the time grounded as well maintaining low fare.

THE MACRO-ENVIROMENT

Every organisation will be affected by different problem this will be caused by many reasons. This can be find out and provide problems with the help of Macro Environment study. This will be associated with...

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