Raynair Business Model Essay

This year, Air resume is print an updated report on Ryanairs Business Model, with a new task in mind. Starting from what was make last year, the 2011 Ryanair report has been conceived with a double objective in mind to provide readers with a brief, compelling, subtraction of Ryanairs business model and highlight new elements and evolutions in Ryanairs skies. In no expressive style 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 low-cost industry with a wealth of information on the markets most important company.Conceptu all(prenominal)y, the 2011 report was elaborated along devil different axis of analysis. In a first part, the report starts by winning a interpret at Ryanairs revenues and expenses. According to the company itself, if Ryanair has grown so fast, it is thanks to an efficient mix of invariably increasing sources of income and ever wider cost-cutting measures in all services. For this reason, the 2011 report looks, item by item, at Ryanairs cost-cutting, profit-maximizing strategies.From the most discussed to the lesser known tactics, the goal is to show how Ryanair has managed and still manages to constantly extract increasing income from its passengers musical composition maintaining rock-bottom prices, through a relatively compound spot system and a slew of auxiliary services. The report alike investigates Ryanairs largely misunderstood relationship with its own assets and how the airline managed to practically dash off costs usually associated with aircraft and human resources, even turning airports into direct sources of revenues.The second part of the report is consecrated 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 legal strategy, whose dominant feature is an extremely proactive stance tow ards anything even remotely menacing to the airline, deterring irate customers from engaging legal action and submerging European regulators with complaints.Second, and perhaps most important, is Ryanairs financial structure itself, through which the airline has optimised every part of its business, taking advantage 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 attest in every form of media outlet almost daily. Whether it be in good or vainglorious terms, Ryanair is being talked about, and gets into customers minds and on every newstand in Europe.The traditional pricing system means that fundamentally, each course must be paid for by exactly one arrange, but a single fare may pay for more than one flight. Multiple fares may be combined to pay for all the fli ghts in a journey. The airline industry usances the term fare dowry (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 set out to elaborate circle trip), any combination of one to four fare components qualifies as a Priceable building block (PU).A ticket can be built from any number of priceable units to form a consistent sellable trip. Some more restrictions may apply such as rules indicating that there must be a Saturday night between departure of first flight in first fare component of priceable unit and departure of first flight and last fare component2. This results in an incredibly 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 advantage 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.