The Competitive Strategies of Ryanair
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Code : COM0070
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Region : Europe Ireland
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Introduction:The year 2002-03 was considered to be the worst year in the 100-year history of the civil aviation industry. The industry faced several problems: the terrorist act of September 11, high fuel prices, the war in Iraq, the impact of the SARS virus, and the continuing effect of weak global growth. These factors plunged several of the world’s leading carriers into crisis. American Airlines was on the verge of bankruptcy, United Airlines expected to post a loss ofmore than $1 billion for the first quarter of 2003. Italy's Alitalia received a $2 billion bailout package, while Greece's Olympic and Spain's Iberia were granted bailout packages of over $1.75 billion each. Germany's Lufthansa announced an operating loss of $486 million in the first quarter of 2003. British Airways (BA) was only beginning to find its footing after slashing its workforce and cutting costs. In this bleak scenario, Ireland-based Ryanair looked like awinner. Ryanair had been increasing its profits for 13 successive years. "Ryanair's 31% operating margin dwarfed British Airways' 3.8%, 8.6% of Dallas-based Southwest Airlines and the easy Jet's 8.7%. Mr.Nick van den Brul, European Airline analyst at BNP Paribas, London, expected Ryanair's revenues to grow by 30% a year through 2006". |
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