Introduction
Every business venture needs to establish their own characteristics and profiles from their competitors. That is why every organization established their own unique mission and vision statements and key objectives to satisfy their goal. Moreover, business organizations usually set their mission, vision, and objectives in the purpose of serving the society, as well as benefitting the community throughout their business cycle.
When it comes to airlines, the determination of the demands, tastes and preferences of the people are still valid. The opinions of every people around the organization are also important to create a just and comprehensive strategy.
Mission
The main mission of every airline is to deliver the safety of their passenger, but how did the Ryanair attract the tourists and other individuals to travel is because of their undertaking to make air travel the most simple, convenient and inexpensive form of transportation in the world. The idea of low cost airlines are based on the idea and probably demands of the people to fly more often if the expenses is not that high or affordable for everyone.
Engaging in the low cost strategy is to fly mostly to and from airports that are not necessarily the busiest place which is also referred as the secondary airports. Ryanair proved that operating in the secondary airports is cheaper than the bigger major airports and also less complicated to make a manoeuvre on their aircraft. And with this strategic approach, Ryanair is the most suggested airlines when it comes to low-cost marketing.
Vision
Ryanair has a vision of a world where the fare could drop to lower rates to bring the steady traffic of business people and tourists to their region. Their concept is not new in every airlines and their vision only underpins their mission. The broader vision in building an effective business and push on the tourism is more applicable (2003). Bringing the fares down is not a common action on the airline business especially in the monopolistic type that usually pushes the fees up. It's a major challenge for the Ryanair to sustain their mission and yet with accordance of their vision in promoting tourism.
Key Objective
Ryanair's goals and objective is to be the Europe's largest airline. And how will they achieve this objective is depends on how tight the relationship of the organization toward their stakeholders. The organization uses the opinions of the most powerful stakeholders to shape your strategy and tactics at an early stage.
Ryanair Airlines also managed to gain support from their key stakeholders and winning their favor to make their plans possible. It is part of the organizational culture to understand the importance of each stakeholder and the benefits they might realize in working with them. And in a broader sense, anticipating the people's reaction in their project may be build a strong relationship and winning their support.
Influence of the Stakeholders
Ryanair's Stakeholders are given much attention and priority in terms of their opinions and decisions in handling the business. The stakeholders are individuals or groups who have an interest in an organization's ability to deliver intended results and maintain the viability of its products and services.
The marketing strategy of the Ryanair had been critically assessed by its stakeholders and formed a market busting strategy that made the entire organization of the Ryanair that made them one of the premier airlines in Europe. Aside from the low cost and secondary airports offered by the organization, there are other business approaches that Ryanair applied to fill up some of their losses.
The no-frills methodology used by the Ryanair has also improved the efficiency and productivity. The traditional flight services like seat allocation, complimentary drinks and meals, and free newspapers have been eliminated. Instead, Ryanair exchanged it with charging the services they offered to the customers for in-flight services and other travel expenses such as travel insurance (2009). Ryanair's cost advantage are very significant and other low-cost operations began to emerge and pushing the traditional way of offering services.
Corporate Responsibilities
Ryanair Airlines and other airlines that falls in the category in servicing the people through the use of aircraft, has always been responsible in delivering the tourists and the other individuals to their point of destination with full of satisfaction. The customer satisfaction is not only based on the affordability of the flying tickets but also on the experience that the airlines will leave to the clients especially when they are first-time flyers.
Environmental Factors Evaluation
1. Government Regulation
The airline industry in Europe has always been fraught with regulation from both domestic
governments and the European Union.
Before the 1980's there existed heavy restrictions on competition in this industry imposed by
individual countries trying to protect their national airlines. A liberalised bilateral agreement in the 1980's between Ireland and the UK was a huge stepping stone for the deregulation of the industry. Also during the 1980's the E.U. set about deregulating the industry and an array of liberalisation measures followed that were to be applied throughout its territories. The result of the E.U. implementations has been that since 1997 any E.U. airline can operate anywhere within the E.U. without restriction.
More recently the E.U. is trying to forge a bilateral agreement with the US to replace the
individual agreements tat have been already made between some individual states and the US. Also, an area that has received much publicity lately is the Subject of State Aid. The E.U. has the power to control any aid given to a business if it encourages discrimination or is contrary to competition unless the aid has been sanctioned by the E.U. In such cases where aid has been given the E.U. can order repayment of the amount given. The latest decision by the European Commission regarding the case at Charleroi meant that Ryanair must payback some of the aid granted by both the Walloon Region and BSCA. This part of the aid was regarded as State Aid1 which is no longer allowed under E.U. competition law. It concluded however that some of the aid given was legitimate and did not have to be repaid as it was compatible with the private market investor principle. This decision has farther reaching implications than the repayment of aid however. The Commission hopes that the decision will ensure "full competition between carriers out of regional airports"2 and "that the advantages granted at a particular airport are not discriminatory and benefit from a greater transparency"3. Competition and Antitrust Law also plays a significant role in determining the boundaries of the industry. "It is a general principle of EU competition law that no agreement may be concluded between two or more separate economic undertakings that prevents, restricts or distorts competition in the common market or any part of the common market. Such an arrangement may nevertheless be exempted by the European Commission, on either an individual or category basis. The second general principle of EU competition law is that any business or businesses having a dominant position in the common market or any substantial part of the common market may not abuse such a dominant position. Ryanair is subject to the application of the general rules of EU competition law as well as specific rules on competition in the airline sector"4.
Since Ryanair is an Irish Carrier by nationality it is also subject to the rules and regulations of the Irish government. The three primary regulators for the airline industry in Ireland are the Department of Transport, the Irish Aviation Authority and the Joint Aviation Authority.
1 Within the meaning of Article 87(1) of the EC Treaty
2 Public CCE Decision Ryanair; Brussels, 3 February 2004, pg 1
3 Public CCE Decision Ryanair; Brussels, 3 February 2004, pg 2
4 Principally, Council Regulation (EEC) 3975/87, as amended.
2. Competition
• Flag Carriers
• Independent Airlines
• Franchises
• Charter
• Other Modes of Transport
Since the introduction of all the previously mentioned liberalisation measures and competition policies, competition in the airline industry exploded, especially in the last ten years. Also, with more of these measures on the horizon it is likely that competition will continue to grow as new entrants seek to take advantage. However, even though there have been an abundance of new entrants many have not lasted. This is mainly due to the reactions of the existing players who ousted many of them with sustained price competition and other such measures. Also the slot system in operation in many major airports meant that new players couldn't get a strong foothold from the beginning. In order to take a look at the competition in this industry it is necessary to divide the players into
four main categories. These four categories can be described as follows: flag carriers, independent airlines, franchises of major airlines and charter operators. "The flag carriers, which fly inter-continental routes as well as those within Western Europe, include both those that have traditionally been heavily dependent on aid from their respective governments (including Air France Group ("Air France"), Alitalia S.p.A. ("Alitalia"), Aer Lingus, and Iberia, S.A.) and "commercial" flag carriers such as British Airways, KLM, Scandinavian Airline System ("SAS") and Lufthansa AG ("Lufthansa") that have operated with no or little state aid in recent years. The
independent carriers include low-fares carriers, such as Ryanair and easyJet Plc ("EasyJet"), and carriers providing "frills" services more comparable to those of the flag carriers but at slightly lower fares than the flag carriers, such as British Midland Airways Ltd. ("British Midland").
Certain small carriers, including Virgin Express, have become franchises of major airlines, sharing some ticketing and other distribution systems with the flag carriers.(the flag carriers often use these smaller independent airlines as franchises to compete with the low cost carriers because their cost base doesn't allow them to compete effectively on short-haul routes) Charter flight operators are significantly more established and more competitive in Europe than in the United States, with many charter operations being owned by major travel groups or commercial airlines."
3. External Forces
• SARS
• Gulf War II
• Oil Prices
• Economic Downturns
The airline industry has always been susceptible to changes around it and the last few years have thrown many obstacles in its path. From the outbreak of Foot and Mouth in the UK to the SARS epidemic in Asia, from the terrorist attacks of 9/11 to the War in Iraq, all of which caused a global economic downturn, the industry has had a torrid few years and most of the major airlines have been running at a loss. Income elasticity of demand for air transport is high meaning a small decrease in GDP will cause a disproportionately larger decline in flying. Also with stricter ruling on state aid the major airlines have well and truly suffered leaving huge gaps of opportunity for the smaller low-cost airlines.
