Ryanair : Low Cost Air Carrier Essay

Ryanair : Low Cost Air Carrier Essay

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Ryanair set precedence when it modeled itself after the U.S. low cost air carrier
Southwest. Ryanair’s main focus is on serving the large leisure market between Ireland and the
UK, however, they experienced rapid growth and expanded to approximately 50 secondary
airports over a variety of countries. The airline’s main areas of operations are in Dublin and
Stansted, however, their use of secondary airports expands their territory, making them the
largest low-cost carrier in Europe. The purpose of this case study is to determine if congestion
and capacity are issues at any of Ryanair’s secondary airports. Furthermore, the cause and
effect, what generates demand, the historical growth trend, Federal Aviation Administration
(FAA) predicted growth and possible solutions and accommodations for Ryanair will be
discussed.
Ryanair’s business model is basically to serve secondary airports at low frequencies and
focuses “on new leisure markets” that do not experience direct competition (“The impact,”
2003). This model allows Ryanair to focus on costs over markets (“The impact,” 2003). Their
almost exclusive use of secondary airports offer advantages in operating costs, landing charges
and handling of passengers and luggage. Perhaps the best advantage, and what keeps the airline
successful, is the lack of congestion as secondary airports and the oversupply of capacity
(Gossling & Upham, 2012). At many main hubs, like London Heathrow or JFK, congestion has
caused delays in many flights and loss of revenues. The capacity to operate out of the terminals
is diminished and when there is room for a carrier to enter the terminal, the fees are exorbitant.
However, Ryanair mostly bypasses these issues because the secondary airports they selected to
op...


... middle of paper ...


...ports and
5
not enter into any contracts to operate at primary airports, like London Heathrow, even though
there is a demand from consumers and the airports for this to happen (O’Halloran, 2015).
Ryanair’s successes can attribute greatly to their business model. This case study has
shown that, though congestion and limited capacity issues are prevalent issues at today’s primary
airports, Ryanair is able to bypass those concerns by choosing to operate out of secondary
airports. Ryanair meets their consumer demands be expanding, both their aircraft fleet and the
airports in which they operate. The airline’s growth is predicted to continue, even though Brexit
has financially disturbed the markets. Ryanair will need to take action to offset Brexit, but for
the time being, capacity and congestion will not be factors that stop the airline from continual
success and growth.

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