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ANALYZING THE BUSINESS MODEL

OF THE MOST SUCCESSFUL IRISH

AIR-CARRIER

RYAN AIR-

RISING

FROM THE

ASHES

ANISHA JAINANNE MARY SEBASTIANJAHNAVI SAMANTRAYKRISHNA GS CHIRAVARUSANAT SACHAR


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Table of Contents

ABSTRACT..........................................................................................2

THE AVIATION INDUSTRY.....................................................................

RYANAIR............................................................................................!

BACKGROUND..................................................................................!

RYANAIR"S INITIA# BUSINESS MODE#................................................$

COM%ETITOR ANA#YSIS &OR RYANAIR...............................................'ANA#YSIS O& RYANAIR"S INITIA# BUSINESS MODE#...........................()

E*HIBITS..........................................................................................((

E*HIBIT (......................................................................................((

Indian Institute Of Manae!ent" Ind#$e % &


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ABSTRACT

T'e $e(#$t ene$a)ises t'e A*iati#n indust$+ ,it' an #ut)## t#,a$ds .#st

st$u.tu$e #f a t+(i.a) ai$)ine and unde$standin t'e $u)e #f t'e a!e in t'e

indust$+/

T'e$e is a 0$ief stud+ #n R+anai$ t# unde$stand t'e 0a.$#und #f t'e

.#!(an+ /T'e initia) 0usiness !#de) #f R+anai$ 'as 0een e1()ained in t'e

$e(#$t/ An #*e$a)) ana)+sis 'as 0een !ade #n t'e .#!(etit#$s #f R+anai$"

na!e)+ B$itis' Ai$,a+s" Ae$ Linus" eas+2et and 3i$in E1($ess t# f#.us #n

t'ei$ 0usiness st$ateies/

A detai)ed stud+ #n t'e 0usiness !#de) #f R+anai$ 'as 0een d#ne and

$e.#!!endati#ns f#$ t'e sa!e 'a*e 0een in.)uded in t'is $e(#$t/ T'is

$e(#$t is 'e)(fu) t# unde$stand t'e 0usiness !#de) #f a t+(i.a) .#!(an+

and unde$stand t'e a( 0et,een t'e !#de) and t'e #04e.ti*es #f a

.#!(an+/

Indian Institute Of Manae!ent" Ind#$e % 5


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THE AVIATION INDUSTRY

T# unde$stand and e*a)uate R+anai$6s .'#i.es ,e 7$st need t#

.#!($e'end t'e s(e.i7.s #f t'e a*iati#n indust$+ and ,'at d#es it tae t#

su..eed in a .a(ita) intensi*e indust$+ )ie t'is/

8e ,i)) 0ein #u$ ana)+sis 0+ unde$standin t'e .#st (#ints ,'i.' a ()a+e$

in t'is indust$+ ,#u)d in.u$" t'ese ,#u)d in.)ude9

&/ Fue) and Oi)5/ O(e$atin Leases

:/ Sta;


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5=

5>


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&=

H R+anai$ .#!!en.es its #(e$ati#nH Fi$st Ii't 9 a &

H A.?ui$es Lis.en.e t# #(e$ate 0et,een Gat,i. and Le,t#n

H C#!(etiti#$s $es(#nd t# R+anai$Js ent$+ t# t'e $#ute

&

H Eu$(#ean C#!!unit+ ad#(ta 7$st (a.ae #f )i0e$)iaKati#n !easu$esH B$itis' Ai$,a+s I#ated #n t'e L#nd#n St#. Ma$etH R+an Ai$ (#sts 'ue )#ses

&D

H Eu$#(ean C#!!unit+ int$#du.es se.#nd set #f $ef#$!s

&&

H R+anai$ ,as #n t'e *e$e #f 0an.$u(t.+H Mi.'ae) OJLea$+ 0$#u't in as t'e CEO #f t'e 7$!" t'e .#!a(n+ ada(ts a ne,

0usiness !#de)/

&H R+anai$ 0e.#!es #ne #f t'e !#st ($#7ta0)e ai$)ines in t'e ,#$)d

5DDDs

H R+anai$ $e!ains #ne #f t'e !#st ($#7.t !ain ai$)ines in t'e ,#$)dHT$ied t# a.?ui$e its !a4#$ nati#na) .#!(etiti#$ " Ai$ Linus t,i.e- in 5DD>" 5DDH C#ntinues t# e1(and and $#,

`

RYANAIR

BACKGROUND

T'e f#))#,in ti!e)ine ,i)) i*e us a 0$ief idea a0#ut R+anai$ and its4#u$ne+ sin.e its in.e(ti#n in &=/ 8e 'a*e in.)uded t'e !a4#$

en*i$#n!enta) fa.t#$s ,'i.' a;e.ted R+anai$ in t'e ti!e)ine 9

8e ,i)) see in detai)s #n)+ t'e 0usiness !#de) ,'i.' t'e .#!(an+ f#))#,ed

f$#! &=-&& 0ef#$e Mi.'ae) O6Lea$+ ,as !ade t'e CEO" t# see ,'at

e1a.t)+ )ead t'e .#!(an+ t# fai) s# d$a!ati.a))+ and ($#*ide

$e.#!!endati#ns #n '#, t# tae t'e .#!(an+ f#$,a$d f$#! &&/

Indian Institute Of Manae!ent" Ind#$e % =


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e*en)#,e$.#sts

)#,e$71ed.#sts

'i'e$0a$ainin (#,e$

,it'su(()ie$s

'i'*#)u!e

)#, fa$es

e*en)#,e$.#sts

)#,e$71ed.#sts(e$

(assene$

'i'e$ai$.$aft

uti)iKati#n

'i'*#)u!e

)#,fa$es

`

RYANAIR"S INITIA# BUSINESS MODE#

R+anai$6s Initia) 0usiness !#de) .an 0e unde$st##d 0+ t'e dia$a! 0e)#,9

N#te 9 8e need t# inse$t t'e dia$a! R+anai$6s 0usiness !#de) t'en

dia$a! i*en #n (ae nu!0e$ > #f '#, t# desin a ,innin 0usiness

!#de)

8e ,i)) ana)+se t'is 0usiness !#de) and '#, it e!('asiKes t'e

i!(#$tan.e #f )#, fa$es 0+ seein R+anai$6s e+ *i$tu#us .+.)es as s'#,n

in t'e !#de)/

RYANAIR6S PEY 3IRTUOUS CYCLES

CYCLE &

CYCLE 5

Indian Institute Of Manae!ent" Ind#$e % >


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e*en)#,e$.#sts

L#,*a$ia0)e

.#st

N# !ea)s#;e$ed

e1(e.tati#n #f )#,?ua)it+se$*i.es

)#, fa$es

`

CYCLE :

Indian Institute Of Manae!ent" Ind#$e %


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COM%ETITOR ANA#YSIS &OR RYANAIR

B/-t-s,

A-/0a1s

Ae/ #-n3s

Ke1 fa4ts La$est ai$)ine 0ased

#n eet siKe"inte$nati#na) i'ts

and inte$nati#na)

destinati#ns in UP

Nati#na) a

.a$$ie$#f I$e)and One #f t'e #)dest

ai$)ines in t'e 8#$)d

B3s-ness

st/ate1

F#.us #n

Business .)ass

.ust#!e$s F#.ussin #n

En*i$#n!enta)

standa$ds ini'ts

I!($#*isin

au1i)ia$+

se$*i.es

t'$#u'

te.'n#)#+ Manain t'e

.#st fun.ti#n

H+0$id !#de)

0et,een a t$aditi#na)

ai$)ine and a n#-f$i))s

ai$)ine Redu.ti#n in )#n-

'au) .a(a.it+ F#.us #n Re*enue (e$

seat

Co56et-t-7eA87antae

L#.ati#nAd*antae at

L#nd#n as a

.ent$e B$and I!ae Te$!ina) = at

Heat'$#,

La$est Ai$)ine inI$e)and L#, fa$es

Val3e

%/o6os-t-on

G)#0a) Q$e!iu!

Ai$)ine

3a)ue .a$$ie$

http://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/wiki/Flag_carrier


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%/o6os-t-on Eu$#(ean .a$$ie$ (#int se$*i.e



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Pn#,in t'e 0a.$#und #f t'e ai$)ines it is ?uite eas+ t# ana)+se ,'+ t'e

see!in)+ e1.e))ent !#de) fai)ed t# de)i*e$/

ANA#YSIS O& RYANAIR"S INITIA# BUSINESS MODE#

9,-le R1ana-/"s b3s-ness 5o8el loo:s -n,e/entl1 -nfall-ble; -t"s

a4t3all1 0o/:-n -n a 7a4335. T,e 5o8el 8oes not a44o3nt fo/

4o56et-to/s at all; 0,-4, -s t,e :e1 /eason 0,-4, b/o3,t R1ana-/

to t,e 7e/e of ban:/36t41 -n (


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R+an ai$ .#!()ete)+ f#$#t t'at it is .#!(etin ,it' t,# #*e$n!ent

0a.ed #$aniKati#ns ,it' dee( (#.ets/ B$itis' ai$,a+s

e*en $an ($#7ta0)e inte$nati#na) $#utes/ In te$!s #f 0#t' ('+si.a)

$es#u$.es and 7nan.ia) $es#u$.es R+anai$ ,as d,a$fed 0+ its !a4#$

.#!(etit#$s/It a)s# fai)ed t# 4ude t'at 0e.ause #f t'is unde$)+in ($#,ess t'e

$ea.ti#n ti!e f#$ its .#!(etit#$s ,#u)d 0e *e$+ )#," and indeed

t'e$e ,as a 0a.)as' f$#! t'e .#!(etit#$s e*en 0ef#$e R+anai$

.#u)d i!()e!ent its )#, fa$e s.'e!e #n t'e Du0)in-Lut#n $#ute/

CONC#USIONS

T'e 0asi. #04e.ti*e #f t'e $e(#$t is t# unde$stand t'e 0usiness !#de) #f a t+(i.a)

.#!(an+" in t'is .ase" R+anai$" a (i#nee$ in t'e A*iati#n Indust$+/

T'e 0asi. $u)e #f t'e a!e #f t'e A*iati#n indust$+ 'as 0een e1()ained as ,e)) as

t'e e.#n#!ies #f s.#(e/ T'e st$u.tu$e #f R+anai$ 'as 0een des.$i0ed ,it' t'e

'e)( #f Business !#de)s s# as t# unde$stand t'e )#i. 0e'ind t'ei$ su..essfu)

st$ate+/

As ,it' Q#$te$6s = f#$.es" .#!(etit#$s a$e #ne #f t'e 0iest .'a))enes in t'e

A*iati#n Indust$+/ Hen.e a 0$ief #ut)## #n t'e *a)ue ($#(#siti#n #f t'e

.#!(etit#$s 'as 0een !ade f#$ .#!(a$is#ns/

Re.#!!endati#ns #n t'e 0usiness !#de) 'a*e 0een (ut a.$#ss t# $edu.e t'e

a( 0et,een t'e #04e.ti*e #f t'e 0usiness !#de) and t'e 0asi. #a)s #f t'e

.#!(an+/

/

Indian Institute Of Manae!ent" Ind#$e % &&


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Indian Institute Of Manae!ent" Ind#$e % &5


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E*HIBITS

E*HIBIT (

Distribution of Operating Cost in an Airline Industry*

So3/4e

,tt6==000.b/-t-s,a-/0a1s.4o5=45s=lobal=5-4/os-tes=ba>/e6o/ts)

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