Strategic planning of Ryan air

Definition:-

Strategic is a set of action which is design to achieve a particular task or goal. Strategic planning is a systematic process where a people make a decision about the future outcomes. Strategic planning is a right direction to lead organization from where it is now and where would be in five to ten years.

Introduction:-

Ryan air was established in 1985 and it is very old and very successful low cost air line of Europe. Actually Ryan air was an independent air line in inland for the first time. In 2001 most people believed that Ryan air was similar to wool mart and southwest air line of the Europe. Ryan air is one of the most popular airlines company in world with 37 bases and 950+ low fares cost routes across 26 countries with 150 destination currently Ryan air have 210 Boeing 737-800 aircraft and company further ordered 102 new aircraft. Currently about 7000 people are employed with Ryan air and are expected that 66 million people carry by Ryan air current fiscal year. http://www.ryanair.com/en/about

Ryan air basic effort is a low price air line:-

Ryan air started offering a low price with no frills service between London and Ireland. Catlin, Declan and Shane Ryan three brothers where the basic share holder of the Ryan air. They started this air line with the share capital of just 1 pound and only with 25 members of the staff. Their father Toney Ryan who was the chair man of Guinness peat aviation (GPA) air craft leasing company landed first air plane to Ryan air which was fifteen setter turbo commuter plane which as a tiny operating aircraft.

Ryan air said that they were ready to grow their strategy and return more share to share holder if it fails to make a deal to purchase new planes from Boeing before and the end of the year.

Ryan air strategy and long term goals:-

Ryan air objective is to establish itself in Europe leading low fare air lines by improving and expanding its offers to their low fare services services. Ryan air this strategy was to increase passengers while they maintain and cutting the cost and operating efficiencies. The main points of Ryan air strategy are as follows.

Low fares:-

Ryan air low fares are design to enhance the demand from fare conscious people and business traveler who might have used another form of transportation instead of flying in the plain. Ryan air sells their seats on one way basis to minimize the stay requirement from all travel schedule services. Ryan air competitors usually do not operate one way pricing policy so a direct comparison with other air line is not possible. In July 2004 Ryan air introduced a fair promotion offering 1 millions seats on certain routes for just 0.99 euro which excluded government taxes and passenger service charge and they offered a similar promote scheme in august 2004 by offering 900000 seats on some routes for just point 0.90.

Customer service:-

Ryan air delivered the best customer service performance in its peer group. Ryan air has fewer last bags and cancellation than all of the rest air line in Europe. Ryan air achieved this by purely focusing strongly on the execution of the service by operating from less busy air ports.

Point to point and short routes:-

Ryan air provided point to point flight on short routes to less busy air ports in and round major population center and destination. At the end of 31 March 2004 Ryan air flew for 91 miles and approximate 1.2 hours flight durations they provided frequent service because of short haul routes.

Ryan air chooses secondary air ports with convenient transport to major cities and regional air port because they are less busy than the main air port. And because of that they had on time departure and rapid turn round time, less terminal delay and more competitive air port access and handling cost.

Cost cut:-

Ryan air management done a good job in cutting their cost by reducing and controlling basic for expenses involved in running major air line

  1. Air craft equipment cost.
  2. Personal productivity.
  3. Customer service cost.
  4. Air port access and handling cost.

Air craft equipment cost:-

Ryan air basic strategy for controlling air craft equipment cost was to buy used air craft. From 1994 to 1998 Ryan air purchase used Boeing 737 -200A air craft that was at the date of purchase with an average age of 23 years. Later in 1998 Ryan air bought next generation air craft which was Boeing 737-800S and they will continuous significantly increase the size of its fleet. Management believed that the turns of Boeing contract a very favourable to Ryan air.

Personal productivity:-

Ryan air control its labour cost by improving the productivity of its productive work force. At the year end of March 31 2004 productivity improvement was 21 present on the year ended march 31 2003.

Customer service cost:-

Ryan air agreed on commutative terms with third party contractors at some air port for passenger and air craft handling ticketing and some other services that can be more cost effective provided by third party. They attempted to obtain fewer rates for such services by negotiating muliti year contract on fixed prices or linked to periodic inflation. Their own internet booking facility allows them to eliminate the travel agent commission.

Air port access and handling cost:-

Ryan air control their air port access and service charges by a using those air ports which offers competitive rates because of that Ryan air had a record of delivering high volume passenger growth at many of such air ports which allow favourable contracts on competitive rates to access their facility. Ryan air further reduced its air port charge by using less expensive gates when possible and outdoor boarding rather than more expensive jet ways.

Long term goals:-

Their long term objective to have the large amount routes and low fares of European air lines. Ryan air is strongly focusing on up holding a high level of growth. 88% of European market is covered by 2 major companies, easy jet and Ryan air for a low cost carrier. Ryan air success to this date is partly sue to day fast pace which industry is developing and as this industry will not grow as fast as it should in future so Ryan air have to seek other ways to sustained their top performance in the industry. The main long term objectives are as fallows

Increase existing routes:-

Ryan air average flights per day compare to easy jet a very low this mean that Ryan air is losing their business on such customer who need more faxable time table so to increase their business and to capture to more market they have to focused on increasing their flights on existing routes.

New routes:-

There are so many viable routes still not used by low fare air lines. Ryan air can open new routes where the competition is more expansive the cost it attract customer with the cheaper no frill optation from to 2002 there is 33% increase in routes from 2001.

Operating base:-

Ryan air must expand their operating basis and net work.

Expand in central and eastern Europe:-

Eastern Europe is becoming a tourist point of interest from all over the Europe and for business traveller due to expansion of European Union. Ryan air however does not cover most of these popular destination, some other low cost air lines have already set up their business over their but still not all the routes a covered so there is still a strong opportunity for a competitive business in this area.

Expand in north Africa:-

Their are also very popular destination for both tourist and North African people who have migrated to Europe. Air lines currently dominate north Africa but there are not low cost air line so by offering low cost flight to these destination Ryan air can easily capture this market effectively. Ryan air purpose should be to seek and negotiate with potential air port in these countries.

Reducing cost:-

Ryan air has the lowest cost compare to its competitors but they can still reduce their cost by reducing their operating expenses.

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