Ryanair - Always Improving

Updated: Aug 30, 2019

The Beginnings

Thomas Anthony "Tony" Ryan was born in Thurles, a small town in Tipperary County (Ireland). He has always worked in the aviation sector, starting as an Aer Lingus manager (Ireland's national carrier) where he stayed for 19 years, from 1956 to 1975. Then in 1975 with a 50.000 $ investment he set up, along with Aer Lingus, the “Guinness Peat Aviation” (GPA) a commercial aircraft sales and leasing company.

GPA grew to be the world's biggest aircraft lessor, worth $4 billion at its peak. However, this huge success suddenly failed in 1992 after stock offering went wrong, the value of GPA dramatically decreased. In a subsequent restructuring, completed in November 1993, GPA avoided default on its debts by selling some of its aircraft.


Later in 1998, GPA was sold, changing its name to AerFi Group plc. From this sale, Ryan made 55€ million, which gave him the funds to improve the new airline that he, his brother Christopher and Liam Lonergan founded in 1984 as Danren Enterprises.


The airline was thereafter renamed "Ryanair", in honor of Tony Ryan. In 1985, it inaugurated its first flight, a connection between Waterford and London Gatwick Airport with a 15-seat Embraer Bandeirante turboprop aircraft, giving rise to what is today the most successful European low-cost airline.

In 1992, under partial EU deregulation, airlines could begin new international intra-Europe flights, as long as one of the two governments gave approval. So the company added a second route, flying from Dublin to Luton. At first, the Irish government refused its approval to protect Aer Lingus, but later Britain, under Margaret Thatcher's government, approved the service allowing Ryanair, for the first time, to really compete with the Aer Lingus and British Airways duopoly.


O’Leary’s Breakthrough

Ryanair passenger numbers continued to increase, but the airline generally ran at a loss and was in need of restructuring. In 1987, Ryan hired Michael O'Leary as his personal financial and tax advisor and Denis O’Brien as his personal assistant.


After a few years, in 1991, O’Leary was charged with the task of making Ryanair profitable. He quickly decided that the keys to profitability were low fares, quick turn-around times for aircraft, "no frills", no business class, and operating a single model of aircraft.


O'Leary went to the U.S.A. to study Southwest Airlines' low-cost model and company strategy, convinced that Ryanair could make huge progress into the European air market, at that time dominated by national carriers. So, as a result of his study in the States, he scheduled flights into regional airports, which offered lower landing and handling charges than larger established international airports and in 1995, thanks to this new strategy, Ryanair celebrated its 10th birthday by carrying 2.25 million passengers.


Because of the huge incomes, in 1998 the airline placed a massive $2 billion order for 45 new Boeing 737-800 series aircraft and after a successful stock exchange listing at NASDAQ, the airline launched services to Sweden, Norway, France and Belgium.

In 2000 Ryanair launched its website, increasing the online booking and then cutting flight prices by selling directly to passengers and excluding the costs imposed by travel agencies. Within a year, the website was handling three-quarters of all bookings.


The enlargement of the European Union opened the way to more new routes for Ryanair. The rapid addition of new bases has enabled growth in passenger numbers making Ryanair one of the largest carriers on the European market.


In 2006, Ryanair launched a €1.48 billion bid to buy Aer Lingus. Ryanair CEO Michael O'Leary said the move was a "unique opportunity" to form an Irish airline that would carry over 50 million passengers a year. Nevertheless Aer Lingus rejected Ryanair's takeover bid.


On 3 October 2007 Tony Ryan died, aged 71, following a battle of 18 months with pancreatic cancer. O’Leary was the hand-picked successor, over time becoming the key man for the airline.


In 2008, Ryanair launched a second takeover bid of Aer Lingus. Ryanair stated that they would double the Aer Lingus short-haul fleet from 33 to 66 and create 1,000 new jobs. Despite this the Aer Lingus board rejected the offer and advised its shareholders to take no action. In 2009, Ryanair walked away from the Aer Lingus takeover bid after it was rejected by the Irish government. However, Ryanair retained a stake in Aer Lingus.

Ryanair's Revenue Strategy

Twenty percent of Ryanair's revenue is generated from goods sold or services offered during flights rather than ticket fares.


New Ryanair aircrafts have been delivered with non-reclining seats, no seat-back pockets, safety cards stuck on the back of the seats, and life jackets stowed overhead rather than under the seat. This allows the airline to save on aircraft costs and enables faster cleaning and security checks during the short turnaround times.


Other proposed measures to further reduce frills have included eliminating two toilets to add six more seats, redesigning the aircraft to allow standing passengers travelling in "vertical seats", charging passengers for using the toilet, charging extra for overweight passengers, and asking passengers to carry their checked-in luggage to the plane. It is likely that all of these proposals may not have been seriously considered, but instead may have been used as an inexpensive way to generate publicity.

Criticism

Although it usually does not serve the primary airport of major European cities, Ryanair has been criticized for placing the names of famous cities on distant secondary airports that were not built for tourist traffic and lacked transit links to the main city. For example "Paris Beauvais" 85 km outside Paris, "Milan Bergamo" 45 km from Milan and "Frankfurt Hahn" 102 km outside Frankfurt.


This is not the only “strange behavior” displayed by the airline. In a Dutch investigative documentary, four anonymous Ryanair pilots claimed they are being pressured to carry as little fuel as possible on board to cut costs. Ryanair and its CEO denied the allegations and sued the Dutch journalists. The court decided that the Dutch had provided sufficient evidence and Ryanair were ordered to pay the legal costs of the case.

Nicki Lauda and Michael O'Leary.

The Recent Years

In 2009, O'Leary, as Ryanair's chief executive, stated that they were planning to close all check-in desks by the start of 2010 allowing passengers to leave their luggage at a bag drop, doing everything else online. This became a reality in October 2009.


In June 2011, Ryanair and COMAC signed an agreement to co-operate on the development of the C-919, a Boeing 737 competitor.


For over a decade, Ryanair had only operated with its Irish Air Operator's Certificate and solely under the Ryanair brand. However, starting in 2018 the airline began introducing additional brands and operating on multiple certificates in different countries.


In 2017, Ryanair announced that it would launch an independent Polish subsidiary in 2018, operating charter flights from Poland to Mediterranean destinations. So, it was born Ryanair Sun. Also in 2018, Ryanair displayed its interest to buy Laudamotion, later renamed "Lauda". After increasing its share to 75 percent, Ryanair fully acquired the Austrian airline in December of the same year.


On 9 June 2019, Ryanair announced together with the Government of Malta, that they will be setting up a local subsidiary airline called Malta Air which will consist of an initial fleet of 10 aircraft.

Ryanair Statistics.

Statistics and The Environment

Ryanair recently unveiled its first ever Environmental Policy, in which committed to eliminate all non-recyclable plastics over the next five years, becoming plastic free by 2023. Continuing this environmental trend, on 8 August 2019, Ryanair released its monthly CO2 emissions statistics, which showed an average of 67g of CO2 per passenger/km, with a total of 14.8 million passengers carried and 18.832 km travelled.


During the last year Ryanair carried 139 million passengers, increasing the numbers compared to the previous year with 130 million passengers. The number of employees also increased from 14,500 to 16,900 according to Ryanair data displayed on the official website.


Also they announced new bases in London Southend, Marseille and Bordeaux and began new flights to several new countries including Ukraine, Bosnia & Herzegovina, Jordan and Turkey.


Currently Ryanair operates a fleet of over 450 Boeing 737-800 series aircraft, with orders of up to 210 new Boeing 737 aircraft, this includes 135 new Boeing 737 MAX 200s, and options for 75 more MAX 200s, which will enable Ryanair to grow its fleet to 585 by 2024, further lowering its fares and grow traffic to 200 million passengers in 2024. The average age of the Ryanair fleet is approximately 6.5 years, and is set to get younger with the latest aircraft order.


As its website says, Ryanair is “always getting better” dedicating itself in the next five years to improve its operations, expanding its fleet and destinations. Currently Ryanair connects 39 countries with 83 bases in Europe and North Africa, operating more than 2400 daily flights.

A Ryanair 737 MAX.

Present and Future Plans

Following the 2019 grounding of all 737 MAX aircraft, Ryanair initially reaffirmed its confidence in the aircraft and indicated that it would be ready to place a new order once it had returned to service.


In July, it warned that some of its bases would be subject to short-term closures in 2020, due to the shortfall in MAX deliveries. Recently, Ryanair stated that the bases of Faro, Tenerife, Las Palmas and Girona will be closed in 2020, expecting to lose 1,4 million passengers.


O'Leary expressed concerns and frustration with the certification delays and revealed that, in parallel with Boeing, he was also talking to Airbus which was offering very aggressive pricing.

Conclusion

Although this giant has risen from several complicated situations before, only time can truly tell how Ryanair will come out of the MAX crisis and whether or not it will remain viable in the ever more crowded European Market.


What do you believe will happen with Ryanair? Do you think we'll see this Boeing Only customer start to fly COMAC and Airbus aircraft? Or will Boeing rectify its mistake and make sure that Ryanair remains a loyal customer?


Sources

Follow us on:

  • Instagram
  • Twitter
  • YouTube

Popular articles:

Boeing 777X Completes Maiden Flight

Boeing’s newest and most ambitious project of revamping the already popular 777 family has taken to the skies and successfully completed its first ever flight, on January 25, 2020.