Twenty years later, Ryainair reported half-year profits of £408 million, up 24 percent on the same
period for the preceding year, based on increased passenger traffic of 20 percent to 26.6 million
passenger trips. The keys to such amazing change to fortune? Detailed planning every aspect of Ryanair
business. Borrowing best practices from American low- cost carriers such as Southwest and Jetblue,
Ryanair’s unwaivering focus on revenue management and cost control has produced a business model
that ...view middle of the document...
Even when forecasted demands drop, fuel
price fluctuations, and currency exchange volatility, Ryanair’s operation were solid.
How Cost conscious is the airline? Consider the story of CEO Michael O’Leary’s foray into the
World Wide Web. Persuade that web tickets would be free of travel agent commissions, O’leary agreed
that Ryanair would built a Web site. Quotes from conventional Web site companies came in at
about£15,500. After the site was delivered on time as agreed, O’ Leary attempted to negotiate the
contract down to £12,000, even after the purchase order had been issued.
O’Leary’s ferocious attention to cost control and revenue growth seems to be destined to propel
Ryainair ever forward. In response to questions about the long-term viability of regional airlines in the face
of voliatile fuel prices, Finance Director neil Sorohan revealed that Ryanair had plans to carry 87 to 100
million passengers in 2012, and 200 million in 2022, based on market share taken away from Alitalia in
Italy and Iberia in Spain. The long-term objectives? A transatlantic operation based on 31 bases in
Europe providing a feeder network-provider it can get long-haul aircraft at the right price.