Based on the management knowledges especially the Human Resource Management knowledge, the business report tends to find management change needed in modern development of management. There choose Ryanair as an example in the airline field to analyse through the methods of literature review and SWOT and case study. Through historically studied Ryanair company, its strategy, culture,mission or vision, especially its HRM are needed to be learned carefully. The report below will discuss from its background. The main topics includes 4 parts including strategy analysis and HRM activities and influences brought by modern technology especially the information technology such as e-booking and at last concluded some changes or reforms needed against some challenge and management problems.
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Ryanair is the Europe’s leading low-cost airline. It was founded in the year 1985 by the Ryan family when a 15-seater aircraft was used for the first route and ran daily flights from Waterford to London Gatwick and delivered 5,000 passengers annually. There is 2 milestones while the first one was in 1986 when happened first fare war in Europe and the other was in 1995 when happened Gulf War January. The two wars brought opportunity for Ryanair’s development and Ryanair did caught the challenges. Today, “Ryanair operates over 230 Boeing 737-800 aircrafts on over 1,100 routes across Europe and Morocco from over 41 bases. The airline has been characterised by rapid expansion, a result of the deregulation of the air industry in Europe in 1997 and the success of its low cost business model. Ryanair is Europe’s largest low-cost carrier, the largest airline in Europe in terms of passenger numbers and the largest in the world in terms of international passenger numbers.”(http://www.answers.com/topic/ryanair) Though as Eleanor O’Higgins(Ryanair-the low fares airline,University College Dublin, Republic of Ireland. 2007:694-708) said that by the end of 1990 the company had flown through a great deal of turbulence,disposing of 5 chief executives and accumulating losses of IR£20m,its fight to survive in the early 1990s saw the airline successfully restyle itself to become Europe’s first low- fares, no-frills carrier and built on the model of Southwest Airline. Since then the highly successful Texas based operator, a new management team, began to conduct low cost strategy. Ryanair has developed to be Europe’s largest economic airline.
Strategy Analysis
Carefully learning the development history of Ryanair, we find the company conducted three main plans to promote its quick growth. The first one is its invest on aircrafts with technology development on aircraft engines. For example, it added first jet aircraft in 1987 and fleet 11 xBAC1-11 aircrafts in 1993 and bought first Boeing737 in 1994.The second one is to continually set up bases in Europe through developing routes from the first route “Waterford (southeast of Ireland) – London Gatwick” in 1985 to 220 routes and 95 destinations across 19 European countries in 2005. Leading to the increase of routes and bases, its passengers increased increased fast from 5000 passengers in 1985 to 58,565,663 passengers in 2008. It was in 2006 that Ryanair caught the opportunity that Moroccan Government made the policy of encouraging significant growth in tourism industry. Today, Ryanair reduced cost on services as possible as it can and formed Europe’s leading low fares airline which has become its competitive advantage(http://www.ryanair.com). Here SWOT was used as the main method to analyse Ryanair strategy carefully.
Strengths
Weaknesses
Low cost
Strong public images
Lots of routes and bases across Europe
Great market share in Europe with millions of passengers
Quick turnover
Sell tickets for standing room
Simple human resource structure
Book online
Point to point
Most second-hand Boeing aircrafts
Same type of an airplane
One person on two or three jobs
Less humanism services
Less managers
Opportunities
Threats
Expansion in Europe
Economic crisis brings low cost consume
Convenience on booking
Direct touch with Ryanair managers
Increase of oil’s price
Airs tickets scalp
Various humanism consume
Such as Iceland volcanic eruption brought by climate change
New entrants
Mergers or Alliances between competitors
Substitute transportation: cars or trains
Terrorism
Table1: Ryanair’s SWOT analysis
From the SWOT analysis, the corn competitive factor sometimes may be weakness cause the consumers’ needs are diversified with the change of modern life styles. However Ryanair has been the the very airline company capable of making money.
Mission or Vision
Based on what Ryanair boss Michael O’leary said, Ryanair’s Mission can be saw from its development history. As Ryanair is well known low cost air carrier, its mission is to be Europe’s low fares airline and the objective is to be Number 1 for customer service.(adapted based on http://www.ryanair.com)
Human Resource Management
In this part, case study is adopted as the main method to discuss Ryanair Human Resource Management activities.
1.Multi-station for one employee
In Ryanair company, almost every employee is on multi-station, which is a big specific of the company. Almost every person are waiting orders to change the role of a job when needed. The number of stations one employee occupies may be surprised. For example, one employ maybe on the job of ensure safety while on the job of luggage operation or even on the job of fireman. Sometimes, one employee may occupy 11 positions. Take this as another example, the flight crew not only finish run or repair aircrafts but also are responsible of cleaning and to replenish stock. Thus it is not needed or less needed to employ ground service employees in Ryanair.Of course, all these should be trained rigorously. While motivated by some encouragement measures, they would like to do several jobs or positions.
Ryanair Recruitment
(www.bfsaa.se scandinavian aviation academy)
Ryanair often offers opportunities to fly. The employees it needs should be professional and hard working who can fully complete the Ryanair Flight Operations team. Those pilots with very little fly experience will be arranged as a cadet. In order to select carefully, the recruitment process and the Multi Crew Coordination Course are designed as tools to identify and recognize the right person to be a member of the organization. However the candidates who are successfully chosen will be offered the opportunity to fly on the basis of following successful finishing “the B737-800 type rating course”(www.bfsaa.se scandinavian aviation academy). The difference is that the latter one was used for those pilots who currently do not have a MCC certificate or who need refresher training due to lack of flight time or who require initial jet orientation training. These trainings are considered the basis courses or require courses before to be a pilot.
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Practically, a valid Joint Avaiation Requirement Frozen ATPL(www.bfsaa.se scandinavian aviation academy) was useful when qualify as a cadet applicant. In order to obtain such certification, some information can be searched on the CAA website. As is said, joining the Ryanair MCC program at Oxford Aviation Academy in Stockholm is acknowledged the prefer way to enter the Ryanair Approved Type Qualificaion Program. The performance during such courses will be recorded and evaluated. Then the successful candidates will be offered an interview and simulated an assessment (www.bfsaa.se scandinavian aviation academy) .
Line Management Model
(Ni Haiyun,December 2009.www.Centra for Asia Pacific Aviation )
In order to serve for its low-cost strategy, Ryanair adopted line management model. Trough this management model, cost of the salary on the level of managers and cost of delivering information or news. The line management model can be explained that there are only 8 managers in the centre of the company. Besides, even though the company expand its size, it will only increase the number of aircrafts, pilots, fly crews and engineers instead of managers. Ryanair announced that “if you want to call the CEO Mr. Michael O’leary, your telephone will be put through in 5 minutes.”which rightly shows the quick speed of delivering information or news. Especially when there happened great event in the company, the information can be quickly delivered and known by the level of managers. In modern competitive and divers environment, this is a valuable tactics for saving lots of fees on information dealings and heightening the efficiency on dealing problems.
Motivation
In Ryanair company, you will see many kinds of measures to encourage or heighten employees’ initiative and enthusiasm. For example,if the air-hostesses of Ryanair company sell commodities in airs when flying, they will take a percentage of 10% of the earnings, which is two-win between the employees and the company itself. What’s more, every fly crew own performance bonus and many general employees own stocks of the company. All these measures are conducted to realize low-cost as well as high profit. Obviously,the role played by these measures promotes employees to sell as many goods as they can just as the fact.
Training and coaching
6.Organizational culture
Influence of the Information Technology
http://www.ebusiness-watch.org
case study: ICT-deployment at the low-cost carrier Ryanair, Ireland(ä¿¡æ¯æŠ€æœ¯çš„影哼‰
The Future
1. Threats or Problems
(Eleanor O’Higgins.2007.Ryanair-the low-fares airline.University College Dublin,Republic of Ireland.694-706.)
1.1 Staff costs and productivity
In fiscal 2006, Ryanair’s employee count rose by more than 700 to 3,500 people, comprising over 25 different nationalities. The new intake was almost entirely accounted for by flight and cabin crew to service the airline’s expansion. Ryanair claimed in its 2006 Annual Report that its average pay, including commissions to cabin crew for on-board sales, was £49,612, a higher figure than any other major European airline. Also, by tailoring rosters, the carrier maximised productivity and time off for crew members, complying with EU regulations which impose a ceiling on pilot flying hours to prevent dangerous fatigue. The airline adhered to the general rule of a maximum of 900 hours flying time per annum, averaging 18 hours per week.
1.2Risks and Challenges
Ryanair faced various challenges as it entered the second half of fiscal 2007. The airline itself predicted that its extra capacity building would create uncertainty about the success of new routes and locations and other difficulties. These were extra marketing and discounted fare costs incurred in launching new routes, as well as overcapacity leading to price cutting by rivals.
1.3 Fuel prices
Ryanair was especially vulnerable to rising fuel prices from 2005. Its low-fares policy limited its ability to pass on increased fares. Coupled with a guarantee that it would not impose any fuel surcharges on its customers, this placed extra pressure on the carrier to find cost savings in other spheres of its operations. Its fuel costs represented 35 percent of operating costs in 2006, compared with 27 percent the year before. Since jet fuel cost fluctuations are subject to unpredictable and volatile world events. Ryanair could neither predict nor control these costs, and was dependent on hedging, based on educated guessing. Moreover, the fact that jet fuel prices are denominated in US dollars compounds the risk by introducing exchange rate exposure, also requiring hedging. Ryanair had not hedged early, so it was paying $70 per barrel of oil up to October 2006, and $73 to $74 up to March 2007 while better hedged competitors such as Lufthansa, Air France-KLM and Iberia had the bulk of their fuel needs hedged at an average of $50 to $60 a barrel until the end of calendar year 2006. Meanwhile, the price of oil stood at about $55 a barrel in late January 2007.
1.4 Terrorism and Secutity
1.5 Environmental Concerns
2. Future Plan
The tragedy at Dublin airport continues where the Dublin Airport Authority(DAA) monopoly recently obtained planning approval for a second terminal at a cost of £750 million, 4.5 times more than the £170 million cost it announced just 11 months earlier in September 2005. Only a government owned monopoly would seek a cost increase of over 4 fold-with no increase in passenger capacity…DAA has recently proposed an outrageous 60 percent increase in charges at Dublin Airport to recoup the inflated cost of this facility which Ryanair passengers will never use. Ryanair will continue to oppose this waste and has appealed the planning decision.
Recomendation and Conclusion
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