Raynair Business Model Essay

This year, picnic Scoop is publishing an updated newspaper on Ryanairs Business Model, with a new task in mind. Starting from what was built last year, the 2011 Ryanair report has been conceived with a double objective in mind to provide readers with a brief, compelling, synthesis of Ryanairs business model and highlight new elements and evolutions in Ryanairs skies. In no way is that report intended as a replacement of the one published last year, rather as a complement that should provide anyone interested in the European mortified-cost industry with a wealth of information on the markets most important company.Conceptually, the 2011 report was elaborated along two unlike axis of outline. In a root part, the report starts by taking a look at Ryanairs r sluiceues and expenses. According to the company itself, if Ryanair has big(a) so fast, it is thanks to an efficient mix of eer increasing sources of income and ever wider cost-cutting measures in all services. For this reaso n, the 2011 report looks, item by item, at Ryanairs cost-cutting, profit-maximising strategies.From the most discussed to the lesser kn take in tactics, the goal is to show how Ryanair has managed and so far manages to constantly extract increasing income from its passengers while maintaining rock-bottom prices, with a relatively abstruse descend system and a slew of supportive services. The report overly investigates Ryanairs largely misunderstood relationship with its own assets and how the airline managed to practically neutralise costs usually associated with aircraft and human resources, blush turning airports into direct sources of revenues.The second part of the report is dedicated to a more analytical approach of the airlines structure, providing the reader with an analysis of what Air Scoop judges to be the three main strengths of the airline. Namely, Ryanairs heavy strategy, whose dominant feature is an extremely proactive stance towards anything even remotely mena cing to the airline, deterring irate customers from engaging legal action and dousing European regulators with complaints.Second, and perhaps most important, is Ryanairs financial structure itself, by meaning of which the airline has optimised every part of its business, taking good of varying legal and fiscal frameworks all around Europe. Third is the most visible, but also possibly the least understood, part of Ryanairs package for success, its communication. The airline, mainly through its hyper-charismatic CEO, Michael OLeary, has managed to be present in every form of media egress almost daily. Whether it be in good or bad terms, Ryanair is beingness talked about, and gets into customers minds and on every newstand in Europe.The traditional determine system means that fundamentally, each flight must be paid for by just one suffice, but a single fare may break for more than one flight. Multiple fares may be combined to yield for all the flights in a journey. The airlin e industry uses the term fare component (FC) to refer to a fare and the flights it pays for (covers)1. Fare components can be combined in six different geometric figures (ranging from direct move to elaborate circle trip), any combination of one to four fare components qualifies as a Priceable Unit (PU).A ticket can be built from any number of priceable units to form a coherent saleable trip. Some more restrictions may apply such as rules indicating that at that place must be a Saturday night between leaving of first flight in first fare component of priceable unit and departure of first flight and last fare component2. This results in an implausibly complex faring system in the traditional airline industry and low transparency for customers. Many low-cost carriers use a different pricing system.Because companies such as Ryanair rely on a point-to-point rather than a hub-and-spoke system, they cannot offer similarly connected flights. Ryanair has decided to turn this into an ad vantage and offer simply-priced point A to point B tickets, avoiding the hassle of elaborating complex ticket structures and allowing the company to deny any responsibility in a missed connection while having the opportunity to intensively utilise aircraft and crews.