Ryanair is an Irish airline founded on 28 November 1984, but it did not begin operations until 8 July 1985. Ryanair was established by the Ryan family, with a share capital of just ?1, ​​and a staff of twenty- five people. The first flights were on a 15-seater aircraft, operating daily from Waterford to London Gatwick. Ryanair was Europe's first low-cost airline. Their company slogans are “Low prices made simple” and “Always improving”. In one year, Ryanair managed to transport 5,000 people. The airline went public in 1997 and the money raised was used to expand the airline. Say no to plagiarism. Get a tailor-made essay on 'Why violent video games should not be banned'?Get the original essay In 2009, Ryanair purchased 30% of Aer Lingus' shares after a lengthy takeover bid. It wanted to buy the whole of Aer Lingus, but the competition commissioner pointed out that the combined airline would have had a virtual monopoly in Dublin, with no competition on 22 of the 35 routes. “Ryanair has offered its customers more competition and more choice, but it cannot now take away that choice. » Today, Ryanair, headquartered at Dublin Airport, has grown from a small airline flying the short Waterford to London route into Europe's largest carrier. Ryanair carries more than 130 million passengers from 200 destinations in 34 countries on a fleet of 400 Boeing 737s, with an additional 260 Boeing 737s on order. Ryanair plans to cut fares and increase traffic to more than 200 million. Ryanair has a team of more than 13,000 employees and an industry-leading safety record. As of March 31, 2017, Ryanair achieved 6.6 billion euros in turnover and 1.5 billion euros in profits. At first, Ryanair followed a traditional business model, but it quickly began to lose money. Michael O'Leary (now CEO of Ryanair) was sent to the United States to study the business model of Southwest Airlines. The business model was developed by Ryanair to use revenue from on-board purchases, internet games, car rentals (Hertz), phone cards, bus and train tickets (Stansted express) and airline reservations. hotel to replace ticket revenue from airline seats. About 16% of their profits come from upselling. Savings have also been made by negotiating discounts with airports to reduce landing fees. Ryanair offers its passengers low-cost, no-frills air travel to European destinations. The company has lower costs and these lower costs are passed on to its passengers in the form of low fares. Branded airlines like Emirates say passengers are willing to pay more for a better level of service. Ryanair has a reputation as an airline that thrives on controversy. Managing Director Michael O'Leary knows the importance of being controversial and realizes that even if you are controversial it will give you free publicity which in any business situation has value. Some of his quotes are so controversial that he had a book written about him, called Plane Speaking: The Wit and Wisdom of Michael O'Leary by Paul Kilduff and which was published by Aurum Press in 2010. In recent months, Ryanair has made headlines regarding union recognition. Ryanair reversed its long-standing policy of not recognizing unions, as the airline faced the threat of actionwidespread protest across Europe as the busy Christmas period approaches. The Market Structure of the Low-Cost Airline Industry The word “oligopoly” is derived from the Greek words meaning “few sellers.” Oligopoly describes a market made up of a relatively small number of large players when viewed from a global perspective. The products they produce are not exactly the same but similar enough to create competition in the market. There are several examples of markets that have the characteristics of oligopolies, notably the fast food industry where a few major players compete for the market. stocks such as McDonald's, Burger King and KFC or the music industry dominated by Sony , Universal and Warner. In the airline industry, Ryanair's main competitors (low-cost airlines) are Aer Lingus, Easy Jet, WOW and Norwegian Airlines. Another defining characteristic of an oligopoly is that the success of the company is often largely dependent on the actions of its main competitors, i.e. Porter's Five Forces. Porter's work had a greater influence on business strategy than any other theory in the last half of the 20th century. Porter's Five Forces framework classifies and analyzes the most important forces affecting the intensity of competition in an industry and its level of profitability. Porter's five forces are (i) threat of substitutes, (ii) threat of new entrants, (iii) bargaining power of buyers, (iv) bargaining power of suppliers, (v) rivalry between existing competitors. Porter's five forces had the following impact on Ryanair's strategy: - Threat of substitutes The threat of substitutes is low because in Europe there are a number of other systems such as trains, buses and cars which can be used for traveling short distances. routes. However, train tickets are not cheap. They also take a lot more time. Ryanair addresses this problem by offering a comparison of its fares and rail fares on a number of routes on its website, thereby encouraging people to use its services on non-air means of transport (Dubovskiy, 2012). . This reflects a low substitution threat for Ryanair. The Threat of New Entrants Although one of the primary functions of government is to preserve market competition to ensure economic health, they can also, directly or indirectly, create barriers to entry into the industry through laws, regulations, policies, and procedures. Such obstacles can prove to be a deterrent for any new entrant wishing to enter the market. This threat of new entrants is low in the aviation sector as it is a costly sector for new entrants to enter. The barriers to entry are high. Buying or even leasing planes is expensive. It is expensive for new airlines to get slots at desired airports and difficult, especially for new airlines, spare parts inventory is not economical, etc. In order to create awareness, huge marketing costs would have to be incurred. The personnel required for an airline, such as pilots and stewards, are not cheap and it is not easy to find qualified personnel. Developing the low operational costs developed by airlines like Ryanair requires experience and economies of scale (Bagdanskas, 2016). Only then can low-cost flights be profitable. The threat of new entrants is therefore not high for, 2017)., 2016)