Ryanair became in 2009 the airline company which carry the most passengers in Europe. That is the result of its strategy which is based on a ‘no frills’ service in order to offer the lower prices. The business model of Ryanair is different from the classic carriers’ in the way that 20% of its revenue is generated from ancillary revenue, such as its “buy on board” program or extra fees for luggage. As we have seen above, the airline industry is very dynamic, and the apparition of alliances within the market forces Ryanair to stay competitive in its environment. Until now, the company did it very well by being emergent, its flexible structure and culture allowed Ryanair to be the number one …show more content…
Among other projects to cut costs,
• Ryanair is planning to run flights where passengers stand during the journey at a price of 5£.
• Carry-on luggage, no more check-in
• No more window blinds
• No more reclining seats.
• enter into new agreements with third party contractors for passenger and aircraft handling, ticketing and other services
The risk of cutting the costs:
Ryanair’s strategy is to give the customers the illusion of free or extreme cheapness. However, Ryanair is not cheap; they just created a blue ocean on managing revenue while giving the illusion of being cheap. There are two major risks in this strategy: first, the customers’ experiences and feedbacks are often negative after they discover they had to add taxes, fees and other extra money beside the ticket cost itself, and there are many complaints of unhappy customers, which constitute bad advertising for the company. Secondly, Ryanair is sometimes on the edge concerning the convenience of its flights: all these cost savings create inconveniences, such as extra transport from the secondary airports to the city centres (which sometimes turn the cost of the travel into a nightmare for the buyer at the original plane ticket price). In 2010, it is rumoured that one of Ryanair’s next revenue generation projects is to make passengers