JoseMTejedor - Assignment 2 - Strategic Management in Action - Ryanair

Course: Strategic Management in ActionAuthor: José Miguel Tejedor Fernández

• Ryanair’s Vision & Values• The Leadership in Ryanair• Evolution of Ryanair• Contingency/Situational Manag.• Key performance indicators.• Recommendation

Outline

• Started in 1985• Leading European carrier flying 72 million passengers, 80%

passenger loading on aircraft• $ 528 million net profit 2011 • Currently in 26 European countries, 1000+ routes• 289 aircraft

Ryanair

Vision

standardization on one type of aircraft

Quick gate turnarounds

Non-union operations

performance-based incentive compensation plans

Low-cost performance in every element of the value chain

be the Low Cost Leader and high punctuality

• Unethical Human resources management Taoiseach described O’Leary’s orientation toward labor as

“tooth and claw capitalism” compensation for pilots and flight attendants based on

efficiency issues

• Poor customer service refusal to supply wheel chairs for disabled passengers

2004, the European Commission ruled that 4 million of the 15 million in incentives paid to Ryanair constituted illegal state aid

Business Ethics

Charismatic Leadership

Michael O’Leary on Ryanair’s Stakeholders European Commission

…”morons” BAA …”overcharging

rapists” UK air traffic control

…”poxy” Travel agents

…”f***ers who should be taken out and shot”

but…open to interpretation

Transformational leadership

Transformational leadership

• Little chance of new entrants• High ticket prices• Limited availability of purchasing tickets-Travel

Agents, Airports• Limited choice of departure airports• No choice of airline

Pre 1990 Airline Industry

• No aggressive competition• Sharing Routes• Fixing Prices• Dominated by a few “global players”• Government intervention• Generally aimed at the “business flyer”

The Airline Environment-pre 1990

• Dominated by big national airlines

• Cartels

• Route Monopoly

Pre-1990 Airline Industry

• Privatisation• Deregulation

Relatively free market

More choice for the consumer!!

1990s-change in the environment

On-Line BookingNo Seat ReservationPay for Seat onlyLed to:Entrance of new players-Go, Wizzair, Easyjet and Ryanair

Birth of the “Low Cost” Airline

• 60 across Europe• Easyjet, Ryanair, BMI Baby (U.K.)• Air Berlin, Germania Express (Germany)• Wizzair (Poland & Hungary)• Air One, Volare (Italy)2007 22.7% growth in seats

The “ No Frills” Industry

• More competitive• Lower Prices• Alliances between “big players”• Emphasis on short-haul due to decline on

long-haul• Increase in low cost carriers• Many airlines copying “low cost model-e-

booking

The airline environment now

Milestones

Contingency/Situational Management

Personnel. Cabin Crew

Personnel: Pilots

Airports

Performance measures

Ryanair’s performance

Financial Perspective

RevenuesExpensesProfitsFuel Costs

Customer Perspective

Types of cuisine offered Baggage rates Response Time for queriesCancelled FlightsNo. of complainsSatisfaction

Service Indicator

Passenger Seats OccupiedNo. of partners in supply-chainNo. of accidentsPercentage of Flights Departures Delayed > 15 minutesCrew productivity and costCrews per aircraftAmount of lost baggage on connecting flights

Flight Operations

FlightsPassengersAvailable Flying TimeAircraft utilisation

KPI - Key Performance Indicators

BSC Designer PRO

Balanced Scoreboard

Performance: 46,02%

Final assessment

Ryanair’s performance

Customer satisfaction assessment

• more focus on leadership vision reflected in useful mission

• develop culture values to place customer service at the heart of their business

• put employees in first place • serve customers with better quality of service• adapt to business changes if deemed

necessary (decrease in subsidies)

Recommendations