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Ryanair is an airline based in Ireland. It is Europe's largest low-cost carrier, operating 209 low-fare routes to 94 destinations across 17 European countries. Over the years it has evolved into the world's most profitable airline [1] (http://www.ryanair.com/press/2004/jan/gen-en-280104.html), running at remarkable margins by relentlessly driving costs down. Ryanair has been characterised by rapid and continuing expansion, enabled by the deregulation of the air industry in Europe in 1997. It operates a fleet of 74 Boeing 737s, and currently has firm orders for an additional 155 Boeing 737-800 airplanes by 2010 [2] (http://www.ryanair.com/press/2004/mar/gen-en-180304.html).
Ryanair is one of Europe's most controversial companies, praised and criticised in equal measure [3] (http://www.rte.ie/comments/ryanair.html). Its supporters praise its commitment to exceptionally low fares, its radical management, its populism, and its willingness to challenge what Ryanair calls the 'establishment' within the airline industry. Critics, meanwhile, have attacked its labor union policies [4] (http://www.eiro.eurofound.eu.int/2003/12/inbrief/eu0312204n.html), and have charged that it practises deceptive advertising [5] (http://news.bbc.co.uk/1/hi/business/3088311.stm).
History
Early Years
Ryanair was founded in 1985 by Irish businessman Dr.Tony Ryan. The airline began with a 15 seater, turbo propeller-engine plane flying between Waterford and London Gatwick with the aim of breaking the duopoly on London-Ireland flights at that time held by British Airways and Aer Lingus. In 1986 the company added a second route - flying Dublin-London Luton in competition to the BA/Aer Lingus duopoly for the first time. With two routes and two planes, they carried 82,000 passengers that year.
Passenger numbers continued to increase, but the airline generally ran at a loss, and by 1991 was in need of restructuring. Michael O'Leary was charged with the task of making the airline profitable. Dr Ryan encouraged him to visit the USA to study the 'low fares/no frills' model being used by Southwest Airlines. O'Leary quickly learnt that the key to low fares was a quick turn-around time, no frills and no business class.
O'Leary returned convinced that a no-frills airline could make huge inroads into the national carrier-dominated European air market. In 1995, thanks to the adoption of a no-frills model, Ryanair celebrated its 10th birthday by carrying 2.25 million passengers. It had become the largest carrier on all its routes.
Deregulation & Flotation
After EU deregulation of the air industry in Europe in 1997, Ryanair was ready to take on the continent. After a highly successful flotation of Ryanair on the Dublin Stock Exchange and the NASDAQ Stock exchanges, the airline launched services to Stockholm, Oslo, Paris and Brussels. Flush with new capital, the airline placed a massive $2bn order for 45 new Boeing 737-800 series aircraft in 1998. The airline was voted Airline of the Year by the Irish Transport Users Committee and voted Best Managed National Airline by International Aviation Week magazine.
Ever keen to drive costs down, the airline launched its website in 2000, with the aim of cutting flight prices by selling direct to passengers and excluding the costs imposed by travel agents. Within a year the website was handling three quarters of all bookings, and now accounts for 95% of the total.
Continental Europe
Ryanair launched a new hub of operation in Brussels Charleroi in 2001. Later that year, the airline ordered 150 new Boeing 737-800 series aircraft from Boeing at what was believed to be a substantial discount, to be delivered over eight years from 2002 to 2010. In 2002 Ryanair launched 26 new routes and established a base in Frankfurt-Hahn Airport, its European expansion firmly on track. In 2003, Ryanair announced the order of a further 100 new Boeing 737-800 series aircraft from Boeing, and in February a third continental base was opened at Milan-Bergamo in Italy.
In April Ryanair acquired its ailing competitor Buzz from KLM, at a knock-down price. Expansion continued apace with the launch of a base at Stockholm (Skavsta), Sweden. By the end of 2003, the airline flew 127 routes, of which 60 had opened in the previous 12 months. The airline launched two more bases in the first half of 2004, at Rome (Ciampino) and Barcelona (Girona), increasing the total to 11 hubs.
Recent History
During 2004, Michael O'Leary warned of a 'bloodbath' during the winter from which only two or three low-cost airlines would emerge, the expectation being that these would be Ryanair and Easyjet. A modest loss of 3.3 million Euros in the second quarter of 2004 was the airline's first recorded loss for 15 years, indicating turbulent times in the low fares market. However, the enlargement of the European Union in 2004 is expected to lead to more new routes as Ryanair and other budget airlines tap the markets of the EU accession countries. Since the accession countries joined the EU on 1 May 2004, Ryanair has opened new routes to three of the ten new EU member states.
Growth and Expansion
Ryanair has grown massively since its creation in 1985, from a small airline flying the short hop to London from Ireland. The driver of the growth has been Ryanair's flamboyant CEO, Michael O'Leary. After taking the rapidly growing airline public in 1997 he used the money raised to expand the airline into a pan-European carrier. Revenues have risen from €231m in 1998 to some €843m in 2003, and net profits have increased from €48m to €239m over the same period. In an industry where the survival rate is 1 in 10 and where even the giants such as American Airlines and Delta struggle to keep in the black, Ryanair's success has confounded many industry analysts.
Ryanair's passenger numbers have grown by up to 25% every year for the best part of the last decade. Carrying under 0.7m annually in its early years, passenger figures grew to 21.4m in 2003. The rapid addition of new routes and new hubs has enabled this growth in passenger numbers, and Ryanair is now among the largest carriers on European routes. In August 2004, the airline carried 20% more passengers within Europe than British Airways did.
Criticisms
Ryanair has been heavily criticised for many of its practices in the past. In a number of incidents it has responded stubbornly to relatively trivial matters, often to make a point about the constant need to avoid adding 'frills' to its service.
Critics have accused Ryanair of poor treatment of customers whose flights have been cancelled [6] (http://www.airlinequality.com/Forum/ryan.htm). The airline refuses to provide accommodation or meal vouchers when flights are cancelled or delayed.
Ryanair is often accused of flying to airports which, while cheap, are too far away from the cities they say they are serving. For example, the airline used to advertise a service to "Copenhagen", Denmark which actually flew to Malmö, in Sweden. This service is now advertised as Malmö. Legal actions forced name changes on routes previously referred to as "Düsseldorf (Niederrhein)" and "St. Etienne (Lyons)", but in other cases court actions have upheld the designated name of the route - this was the case for Frankfurt Hahn, some 70 miles from central Frankfurt.
 Ryanair Boeing 737-200 taking off Also criticised are what are seen as vitriolic attacks on opponents, notably former Irish Minister for Transport Mary O'Rourke (1997-2002), who was personally ridiculed in a series of controversial newspaper advertisements when she refused to break up the state monopoly which then ran Irish airports, Aer Rianta (now largely restructured). (The break-up of Aer Rianta remains a high profile demand for Michael O'Leary. It is due to be implemented during 2005 under the State Airports Act 2004).
Ryanair famously does not employ an advertising agency, instead producing all its advertising material in-house. As Michael O'Leary often insists, the airline goes to extremes to make a point. This results in Ryanair's advertising occasionally being considered offensive [7] (http://www.brandchannel.com/features_effect.asp?pf_id=49) [8] (http://news.bbc.co.uk/1/hi/business/3456423.stm).
The airline has been criticised for the age of its elderly Boeing 737-200 aircraft, which were bought second hand from Lufthansa and Britannia Airways. These aircraft are now over 22 years old and some industry observers believe that Ryanair has pushed them beyond their useable service life. Ryanair argues that the planes are well maintained, but has already scrapped a number of them for technical reasons. The airline announced in October 2004 that the remaining -200s will be disposed of by November of the following year.
Ryanair receives subsidies from some European airports, a situation which has been investigated by the European Commission. The EC believes that subsidies from state-owned airports are a breach of European Union competition rules. In February 2004 the European Commission ruled that Charleroi airport gave Ryanair illegal subsidies and ordered the airline to repay roughly 4 million euros of subsidies. Walloon authorities who offered the subsidies were considering appealing against the ruling because of the roughly €45 million that the airline route brings to the area every year.
An investigation into a fire onboard Ryanair Flight 296 between Dublin Airport and London Stansted Airport saw the airline critised for failures in the training of staff to cope with emergency situations, such as the opening of emergency doors. Also critised was Ryanair's training staff in Eastern European countries, making staff pay for their own training, and also charging staff for uniforms and airport security badges.
The airline has come under heavy criticism in the past for its poor treatment of disabled passengers. In 2002 it refused to provide wheelchairs for disabled passengers at Stansted Airport, hugely angering disabled rights groups. [9] (http://www.drc-gb.org/newsroom/newsdetails.asp?print=true&id=773§ion=1), although the airline argued that this provision was the responsibility of the airport authority. Ryanair state that 87 of the 93 airports they fly to provide wheelchairs to those requiring them. A court ruling in 2004 judged that the responsibility should be shared by the airline and the airport owners [10] (http://news.bbc.co.uk/1/hi/business/4112791.stm).
In 2002 Ryanair reneged on a promise of free flights given as a prize to the airline's one millionth passenger, Jane O'Keeffe. She received the prize in 1988, but the airline refused to carry her free of charge on a flight in 2002. The woman eventually went to court and won an award of £43,098. [11] (http://www.rte.ie/news/2002/0228/ryanair.html) [12] (http://www.ananova.com/business/story/sm_611142.html)
Competitors
Among Ryanair's main low-cost competitors are easyJet, Air Berlin, Germanwings and Transavia. In 2004 approximately 60 new low-cost airlines were formed. Despite traditionally being a full-service airline, Aer Lingus began to adopt a low-fares strategy in 2002, leading to much more intense competition with Ryanair on Irish routes – Ryanair's most profitable.
Ryanair's network, as of November 2004 In September 2004, Ryanair's biggest competitor, easyJet, announced routes to the Republic of Ireland for the first time – until then easyJet had never competed directly with Ryanair on its homeground. easyJet does fly from Aldergrove in Northern Ireland, but Ryanair does not operate there. The last low-cost airline to compete directly with Ryanair on the UK/Ireland routes was Go Fly – which had to pull out due to mounting losses.
Routes
See: Ryanair destinations
Ryanair currently serves 95 airports in 92 destinations (It serves 3 London and 2 Stockholm airports). Its main hub is London Stansted airport, althought Ryanair has several other significant bases throughout Europe such as Dublin (DUB), Prestwick (PIK), Rome (CIA), Milan (BGY) and Frankfurt am Main (HHN).
Of all Ryanair's routes, the Dublin-London route remains both the busiest and the most profitable. This is largely due to the number of Irish people who live in the UK – and increasingly the number of Irish who use the route to make connecting flights to other places in Europe.
See Also
References
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