Ryanair…expecting to be the new Britain’s number 1 airline

The news about Ryanair growth didn’t surprise me that much. Since I got to London, every time I want to travel I look at Ryanair’s Website because I know there is no other company that offers flight as cheap as them. Moreover, I always got good service with this company even if it isn’t as luxurious and comfortable as British airways or Air Canada.

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I then decided to find out more about this assumption. I read different articles about the company and about what was going on; some were about its growth, others about their strategy and some were referring to the comments that easyJet CEO made about Ryanair.

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Actually, the low cost carrier predicted that they could become UK’s dominant airline within months since British Airways is planning to reduce its number of flights for the winter season when Ryanair is forecasting to grow. Moreover, since the company profit expanded by 80 per cent in the first quarter of this year and since their passenger numbers are rising because of all their different promotions such as a flights for 1 pence, we can almost be sure that their prediction will be confirmed by winter.

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A good article describing Ryanair’s was in the Independent. First of all, I found the headline pretty original and intriguing A tale of two airlines: the good and the bad. The story was really positive for Ryanair. I couldn’t say it was bias, but the author showed that she was on the company’s side. The article was clear and easy to understand even if it was stating some numbers such as the group’s £350 millions profits which was actually distorted by a 42 percent fall in fuel costs after the sky-high oil price spike of 2008 and the fact that the average fares decline by 17 percent. The article used good quotes of Michael O’Leary, Ryanair’s chief executive saying that the will overtake BA in the UK market as well as Alitalia and more for 2010.

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The recession seems to have helped low-cost company and especially free times ones since everyone was depressed with the recession, they then decide to spend more on leisure activities to forget about all the money they lost. O’Leary confirms it «we love deep downturns and recessions. We will be trading very profitably when all around us are blowing their brains out.».

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According to other articles, Ryanair didn’t seem to have such a winning strategy to be able to gain its desire 66 millions of passengers by the end of the year even with their plan to decrease their fares by 20%. The article from the Financial Times was more pessimistic about the company. The author explained why Ryanair might have to rein in growth. O’Leary wanted to buy 200 jets for a low price since the industry of Boeing was in crisis with the recession, but they showed some reluctance, which I understand because it can’t always been the same people that are gaining from the others. Moreover, this story integrate an analyst point of view stating that the only reason Ryanair had success was because they were able to keep down maintenance costs with a young fleet which puts pressure for replacement. I think that he might be right, because it is hard to replace aircrafts and since the company is popular for its low-fare, it they start to stop their growth, Ryanair would be under less pressure to fill new seats, so there would be less need for eye-catching promotions and average fares could then rise. Thus, the company needs to find maybe a better strategy than giving money to its shareholders.

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Finally, the last article that made me smile is one from sky news. It highlighted the competition between Ryanair and easyJet. The article showed how easyJet was attacking Ryanair by criticising his rival’s growth strategy plans saying they will end in tears for his shareholders. This article made me feel that Mister O’Leary didn’t know anything about business, thus I could say the author was quite bias. This story didn’t say that much about what was going on, but I liked it since it showed the other side of the company. The quote that made me laugh from easyJet was that they were suggesting Ryanair to buy a piece of the Mojave Desert in California to stat an aviation museum. Even though the author showed the bad side, at the end he stated some facts about what was going on. I think the reason why it was more entertaining at the beginning was to interest the reader and encourage him to read through the article.

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I found my reading interesting because all the articles seemed to have a different angle relating the story. I learned more about the company and I found out that I was probably lucky that I went to Dublin for 2 pence. I hope Ryanair will get its deal with the Boeing because it gave the chance to everybody to travel around and discover new cultures, which has no price.

Sources:

Times Online

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6900107.ece

Sky News

http://news.sky.com/skynews/Home/Business/Ryanair-And-Easyjet-Bosses-In-Battle-To-Take-Crown-Of-Top-UK-Airline/Article/200911115431058

Financial Times

http://www.ft.com/cms/s/0/a60cdd5e-c818-11de-8ba8-00144feab49a.html

Independent

http://www.independent.co.uk/news/business/news/a-tale-of-two-airlines--the-good-1813698.html

Mail Online

http://www.dailymail.co.uk/money/article-1224784/Ryanair-soars-fres-rise.html#

Telegraph

http://www.telegraph.co.uk/finance/markets/questor/6487711/Turbulence-at-Ryanair-could-be-good-for-investors.html