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Ryan Air - Marketing Strategy16. july 2010 18:02 | Business
by Brad Sakle
After the tragic event on 9/11, most airline and aviation companies recorded a great deal of loss in revenues, and many aircraft delivering from Boeing and Airbus where cancelled. RyanAir used this to their advantages, because of so many deliveries where cancelled, Boeing was offering very good price for companies that were willing to buy any new aircrafts from them. RyanAir made a firm order of more than one hundred aircraft and had an option for the same number of aircrafts; now they have one of the most modern aircraft fleet in the world. RyanAir has taken chances when others haven’t, and that might be the key to their success.
Much is debated of how a small airline from Ireland has come to be the largest low-fare airline in Europe. Some people say it is because of the aggressive management they have, but according to others it is because of unethical behavior towards their employees, consumers and to their environment. I am not going to say who is right and who is wrong, but much credit has to be giving to the CEO, Michael O’Leary. In the beginning of the last decade O’Leary was hired because the airline hadn’t been progressing as fast as they would have wanted. Immediately O’Leary went to the United Stated to study the low-fare airlines there. He came back to Europe and started intergrading the “low-fares/no frill” concept at RyanAir, which meant no business class, quick turn-around time (at RyanAir the turn-around time is limited to only forty five minutes), and operating only one type of aircraft. Today RyanAir has incorporated more changes to be able to offer their customers better prices; they have taken the seat pockets out; they have cut out the seat recliner; removed all window blinds from their new aircrafts; and now they want to remove all head rest covers and they are most likely to be replaced with head rest covers with advertisements. Their newest idea is to encourage passengers to take their entire luggage to the aircraft. This would save time and money on checking in the luggage, the luggage handling, and storing lost property.
Before the low-fare airlines came around, there were two main customer segments in the airline industry; business, which are service orientated customers; and economy, which are price orientated customers. In the beginning low-fare airlines focused mainly at the economy segment, but now they have created a new segment, which are consumers mostly on holiday. These customers would have otherwise driven or taken the train, or maybe not traveled at all if it wasn’t for the low price of the flight ticket.
The product RyanAir is marketing is the actual flight. They are able to offer their flights in one of the most modern airline fleet in the world, which consists of more than a hundred aircrafts. The types of aircraft RyanAir flies are mostly Boeing 737-800 and a few Boeing 737-200. RyanAir has been getting rid of the 737-200 from their fleet and replacing it with the much more fuel efficient aircraft, the Boeing 737-800. RyanAir offers well over three hundreds routes across twenty three counties; and has twelve main hubs located throughout Europe. One of the most inconvenient things about RyanAir is that they usually don’t fly to the major airports. The locations of the airports they fly to is often far away from the city they advertise those specific routes to. RyanAir has been heavily criticized for this practice and authorities in some countries including Denmark and Finland have had to step in and place regulation concerning this kind of practice. For an example RyanAir claimed they were flying to Copenhagen, Denmark when they were actually flying to Malmo, Sweden, located more than fifty kilometers away; in Germany they claimed they were flying to Frankfurt when they were actually flying to Frankfurt Hahn, which is located more than hundred kilometers from the center of Frankfurt.
RyanAir offers the lowest price available for airline ticket in Europe. Andrew Clark explains RyanAir’s pricing strategy well in The Guardian, “O'Leary's preoccupation is simple: low fares. Ryanair's average ticket costs €41 (£27), compared with €62 (£41) on easyJet or €268 (£178) on BA.” RyanAir is able to offer the best price because they eliminate some of the high maintenance things such as the reclining seats, window blinds, and seat pockets as discussed earlier in this paper.
RyanAir uses various promotional elements such as advertisement, sales promotion, direct marketing, and public relation.
Advertisement: RyanAir’s advertisement consists of newspaper advertisement, TV advertisement, magazine advertisement, internet advertisement, and they also place posters and other advertisements on the airports they fly to.
Sales promotion: RyanAir uses sales promotion on their web site, they offer flight for as low as one pens for each flight. This practice has been criticized due to the fact that in addition to this one pens people do have to pay taxes, fees, and other charges which ad to this one pens.
Direct marketing: people are able to go to RyanAir’s web page and register for membership to their subscriber list. People on this subscriber list get regularly e-mails containing offers before they advertise those offers on their web site, so subscribers on this list always get the best deals available at RyanAir; in addition RyanAir sends subscribers to this list special member offer that only they can take advantage of though the member booking section on their web page.
Public relation: RyanAir uses public relation in the form of news releases. Every time RyanAir starts a new route they will have news releases.
The way RyanAir uses these promotional elements, is that every time they start a new route they will place advertisement in local newspapers, magazines, and radio stations; they will send out e-mails to everyone on the subscriber list; usually they will have sales promotion on their new routes by offering very low price; and then RyanAir will issue news releases for all their new routes. RyanAir does not employ an advertisement agency, instead, they do all their advertisements themselves, and often they have been considered offensive.
In two thousand RyanAir launched their web site www.ryanair.com which now is the only way to book a flight with them. By allowing customers to book online, RyanAir was able to lower the ticket price. This practice is now standard for low-fare airlines in Europe, and is now increasing throughout the industry, most airlines now offer better prices if the customer books his or her ticket online.
Like I mentioned earlier, many of RyanAir’s practices have been heavily criticized from all directions. It has been criticized that RyanAir tries to prevent their workers from joining unions; the crews have to pay for their own uniforms and even employees working in RyanAir’s offices have to pay for their own pencils and pens. RyanAir has also been criticized for their treatment of people with disabilities.
A TV program recently shown in England called “RyanAir Caught Napping”, showed where two undercover reporters spent five months working for RyanAir. They secretly filmed RyanAir training programs and they also filmed onboard flights. This program revealed many bad things about RyanAir, such as dirty planes, exhausted cabin crew, and inadequate safety and security checks. Even all this bad publicity does not severely effect RyanAir’s growth, because they are still the cheapest airline in Europe.
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