Jack Watson marketing Assessment.
Ryanair is an Irish, low budget airline with its main headquarters in Dublin. The company was founded in 1985 by Tony Ryan, Christopher Ryan and Liam Lonergan. Since 1985 to now it has grown massively into one of the Europe’s largest low fare carrier. In 1990 the company suffered a £20 million loss and was forced to completely restructure and a new management team was brought in headed by Michael O’Leary who made major changes to the airline. Ryanair changed its whole strategy and became a low cost, no frills airline. The following few years Ryanair cut their prices drastically and managed to open up many more routes around Europe. Today Ryanair has flights going to 37 countries and roughly 1800 routes. With a fleet of 400 and over 14,500 professionally trained staff, Ryanair is becoming highly regarded as one of the top airlines on the market with their low price plan and also their great time keeping with 88% of flights arriving on time which is only matched with Iberia airlines. Ryanair mission statement – “Ryanair will become Europe’s most profitable lowest cost airline by rolling out our proven `low-fare-no-frills service in all markets in which operate, to the benefit of our passengers, people, and shareholders.”
Ryanair’s marketing plan is all about their low cost flights, which not all customers will want because they will see that the flight is part of the holiday and would expect a better standard of flight. They target people who don’t really care for hot meals and movies on flight which most of the other airlines provide but will charge a higher price. Ryanair’s main customers will be younger generation who don’t mind travelling at the time of the day as long as they save some money doing so, with more and more people going on holiday each year and looking to save money along the way, that is why Ryanair will always be one of the first places a customer will check when looking to book a flight.
*(According Ryanair website information article 20th of September 2018)
Comprises those major factors which affect many businesses and industries and which cannot be influenced by any one organisation. The macro-environment comprises six categories of variables sometimes referred to as the PESTEC factors:
Political factors can include a whole host of factors such as changes in the law or government policies.
In 2016 the British public voted to leave the EU, this vote will have effects on both the political and economic factors surrounding the airline. Many laws will change due to the vote including taxes which could see Ryanair having to pay more money to enter the EU which could result in the organisation shooting up their low prices.
According to Ryanair boss Michael O’Leary there could be major disruption with summer 2019 flights into the EU if there isn’t any agreements between the British government and those in power of the EU.
British airlines can currently offer services to anywhere they want to within the European Union because of the bloc’s common rules for aviation, also known as the European Common Aviation Area arrangements (ECAA).
But Ryanair boss said he could not guarantee passengers will be able to take flights booked for 2019 if Britain leaves the bloc with a no Brexit deal.
*(Express July 23rd 2018 Website article)*
Terrorism has effected every airline drastically since 9/11 when hijackers forced their way into the cockpits of three planes in America and attacked new york city and the pentagon resulting in many deaths. Airports have had to extremely upgrade their security with each airport having multiple points where passengers get searched. Also planes would have had to been fitted with more secure cockpit doors so any potential hijackers in the future don’t manage to do it so easily. Many flight links been the EU and countries suspected of terrorism have had their flights cancelled to try reduce the risk factor in future attacks.
The simplest economic factors which affects businesses is employment and unemployment. During times of high unemployment, or in times of recession or economic downturns the demand for most products will be reduced. Here will simply be less money available to buy things and as a result all businesses will suffer. However, as global living standards improve the demand is growing as more and more people can more and more. Economic Factors which effect Ryanair is the exchange rates which have dropped significantly over the past 10 years, with exchange rates not being as good for the U.K citizens to travel abroad some families may choose to not go away for as long as they would of in the past and perhaps have a holiday in the uk instead where they won’t be spending as much money. With the increase of oil prices which results in the fuel prices for the aeroplane also increasing this is one of the key expenses for any airline, a spike in the cost of fuel gets passed down to the customer who as a result has to pay more for their seat on the plane. Jet fuel prices in the U.S. are up around 30% compared to the same time the year previous, which will also have an impact on Ryanair’s potential earnings as not as many customers will want to accept and buy the tickets with an increased cost.
As society attitudes change, customers look for a new and different product to meet their needs and to satisfy their wants.
• Spending trends – For people staying in the United Kingdom, countries like Spain and Portugal have always been the most popular tourist hot spots for their summer holidays but now holidays to Asia are becoming more and more popular with it being easier than ever to travel around the world and people wanting to experience other countries cultures and lifestyles.
• Longer life expectancy- with most of the population living longer now than they ever did, pensioners will be a great target for airlines as pensioners are wealthier than ever and don’t need to work so they can afford to go on more than one holiday a year as they won’t have to pay for their kids because they will be grown up and have their own families.
• The role of the woman in society- now that woman have equal rights to men and can now apply and take on the role of pilot which is still majorly seen and carried out by men. Ryanair has 554 UK pilots, 1.4 per cent (eight) of its pilots are women as customers on the flights might not think woman are capable of flying a plane (Figures from independent 3rd April 2018 website article).
• Growing importance of a much culturally diverse society- In the U.K we have people from all over the world from many different countries. they come over with different cultures, tastes I different foods and also their own languages which is good for airlines as they will need to set up flights for the people to travel back home to their homeland which in return puts the overall revenue up for the organisation.
• Smaller families- Couples are now having smaller families due to the fact they want to focus on having a good career so are having children later on in life instead of their early 20s as the would of in the past. With families being smaller and income being higher it will allow families to afford to go on holiday each year.
Technological Factors- Each year sees the introduction of new and better technology. As a result, business have to adapt and introduce new products. Improved technology and transportation means the distant destinations are only a short hop away. A fortnights holiday from the U.K to Australia would have seemed unthinkable twenty years ago, while New York is currently one of the most popular weekend break destinations for the British travellers.
• Online check in- Like nearly every airline company Ryanair gives you the chance to check in online by simply pressing ‘check in’ up to 60 days before departure, by doing this Ryanair can cut down on staff as all the staff need to do is check in the bags which is a much faster process than checking in multiple families.
• Technology on flights- Ryanair is well known for being a budget airline and taking short cuts when it comes to improving their flight experience. The company won’t have tv’s on flights to try save expenses but customers will accept this because they know that’s that the company do to save costs to bring flight tickets down.
Environmental Factors – These factors impact on all of us today and are their importance highlighted on a daily basis in the media. An organisation that is not environmentally aware nowadays faces potential losses in terms of sales and possibly from government bodies.
• We operate with a high-seat density of 189 seats in all-economy configuration as opposed to the 162 seats and two-class configuration of the Boeing 737-800 aircraft used by network airlines. This reduces fuel burn and emissions per passenger by 14%.
• We have reduced per-passenger emissions by 11% through increasing load factors over the past 3 years from 83% to 93%.
• We implement a “low drag approach” landing procedure which optimise the aerodynamic settings of the aircraft and reduces fuel burn by approx. 5%.
• Installed winglets on all of our existing aircraft and future aircraft. Winglets reduce both the rate of fuel burn and carbon dioxide emissions by approximately 4%.
• We are taking delivery of 183 new Boeing 737-800NG aircraft with CFM Evolution engines which provide a 2% improvement in fuel consumption.
• We have installed Slimline seats which improve leg room (30 inch pitch) for customers, and reduces fuel burn due to their lighter weight. Slimline seats are over 850kg lighter than older seats per plane which reduces fuel burn by approx. 1% per plane.
• We use Ground Power Units (“GPU’s”) during turnarounds which are more environmentally friendly and fuel efficient than the aircraft’s Auxiliary Power Units (“APU’s”) thereby saving fuel (approximately 30kg per turnaround) ; reducing fuel emissions.
• We run paperless cockpits, with pilots utilising electronic flight bags (“EFB”) and individual tablets, eliminating 15kg of manuals per cockpit.
• We operate a one-engine taxi procedure which reduces fuel burn and emissions by another 1%.
• We improve existing airport infrastructure by operating to underutilized secondary and regional airport, which limits holding patterns and taxiing times, thus reducing both fuel burn and emissions.
• By providing customers with direct services (as opposed to connecting flights) we limit transfers in the hubs and thus reduce the number of take-offs and landings per journey, thereby reducing fuel burn and emissions.
• Are ranked No. 1 (among airlines with over 50 movements per month) for Continuous Descent Approach with a combined 98.7% success rate into Stansted, Gatwick ; Luton Airports in June 2016 which reduces noise.
• Have cut our use of paper ; printing through the MyRyanair App which allows customers to secure their boarding cards and travel documents on their laptop or mobile devices.
• Operates a “good neighbour” policy of no through the night aircraft movements, reducing noise emissions; and
• We use energy efficient LED lighting in all our Boeing Sky Interior (“BSI”).
Competitors – Most organisations have competitors nowadays. In order to stay in business and continue to make a profit, organisations must remain aware of their competition, their strategies and have organisational objectives in place that will keep them ahead of their rivals.
Ryanair’s main competition is Jet2, Easy Jet and Wizz air, with also more competitors. Ryanair bosses have tried to keep the company ahead of competition by opening up more airport links across Europe and also keeping their prices reasonable. Ryanair in 2014 brought out a reward scheme for their customers after decades of bosses not wanting to introduce one, “My Ryanair Club” which will offer customers discounts and free flights depending on how often they use the airline. The new scheme, which aims to entice people to save credit card data on their Ryanair phone apps, will offer customers one free return flight when they book 12 flights in a year and will make specific offers to customers depending on their travel habits.
Like a macro environment, the micro environment also comprises factors which are external to the business, but these factors specific to particular firms and industries, and they also tend to be factors over which the individual organisation can expect some control.
Customers- A customer is someone who an organisation supplies its products or service to. Marketing managers need to understand as much as possible about the nature of the customer’s wants and needs to satisfy them and keep ahead of the competition. As one of Ryanair’s slogans ‘the first no frills airline in Europe’. The company’s target market are people who travelling within Europe, these passengers will be looking to save money while flying and not particularly bothered about sitting in comfort during their flight. The low fare could also apply to businessmen and woman who will try save money on flights as they are frequently flying.
Competitors- competitors are organisations trying to satisfy similar customers’ needs by producing similar products at competitive prices.
Competitors can be divided into direct and indirect competitors.