Ryanair Holdings Plc - Travel and

Tourism - Ireland

Euromonitor International : Local Company Profile

March 2010
Ryanair Holdings Plc - Travel And Tourism Ireland

List of Contents and Tables

Strategic Direction .................................................................................................................................................. 1

Key Facts ................................................................................................................................................................. 1

Summary 1 Ryanair Holdings Plc: Key Facts....................................................................................... 1
Summary 2 Ryanair Holdings Plc: Operational Indicators ................................................................... 1

Company Background............................................................................................................................................ 1

Competitive Positioning.......................................................................................................................................... 2
Summary 3 Ryanair Holdings Plc: Competitive Position 2009 ............................................................ 2

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Ryanair Holdings Plc - Travel And Tourism Ireland

RYANAIR HOLDINGS PLC

STRATEGIC DIRECTION
• Ryanair Holdings Plc is a low-cost airline, pursuing a strategy of rigorous cost cutting. Nominal low fares
are supplemented by a growing number of extra charges. One key aspect of the company’s low-cost
strategy is that it flies mainly to smaller airports, where it can dictate conditions to a significant extent and
which are often heavily subsidised.

KEY FACTS
Summary 1 Ryanair Holdings Plc: Key Facts
Full name of company: Ryanair Holdings Plc
Address: Dublin Airport, Co Dublin, Ireland
Tel: +353 (1) 812 1212
Fax: +353 (1) 812 1676
www: www.ryanair.com
Activities: Air transportation
Source: Euromonitor International from company reports, trade press

Summary 2 Ryanair Holdings Plc: Operational Indicators

2006 2007 2008
Net sales EUR2,237 million EUR2,714 million EUR2,942 million
Net profit EUR401 million EUR481 million EUR105 million
Number of employees 4,500 5,262 6,369
Source: Trade press, company research
Note: Financial year ends March

COMPANY BACKGROUND
• Ryanair Holdings Plc is a public limited company set up in 1985 by the Ryan family, since when it has
become Europe’s largest low-cost airline. At the end of 2009, it had 37 bases and was offering more than
950 low-fare routes to 26 countries, connecting 150 destinations. The company operates a fleet of 210 new
Boeing 737-800 aircraft.
• Ryanair Holdings Plc has firm orders for another 112 new aircraft in place, which it will receive between
2010-2012. For 2010, this amounts to approximately four new aircraft each month. This fact alone all but
forces the company to generate significant passenger growth over the forecast period, regardless of the
challenging economic environment.
• At the end of 2009 it was announced that Ryanair Holdings Plc had broken off negotiations with Boeing
concerning the delivery of a further 200 aircraft from 2013 onwards. Sources at Ryanair Holdings attributed
this to the fact that the terms and conditions being offered by Boeing were less favourable than in previous
contracts.
• Trade sources noted as interesting the fact that a large client such as Ryanair Holdings Plc would not be
offered the most favourable conditions. This appeared to be in line with the fact that it was becoming more
difficult for the company to secure the same favourable conditions at certain airports as it has been used to
in the past. As a result, Ryanair Holdings has reduced capacities at some airports, including London
Stansted, Dublin and Shannon, while it has completely withdrawn from Basel Airport. Other airports that

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Ryanair Holdings Plc - Travel And Tourism Ireland

were threatened with similar measures eventually complied with Ryanair Holdings’s demands. At the same
time, the company has expanded its network to include the Canary Islands, located further beyond its usual
comfort zone of short-haul flights, a development which was partly attributed to generous subsidies offered
by the Canary Islands in a bid to promote tourism there. Pressure to expand has also forced Ryanair
Holdings to fly to larger cities such as Madrid.
• Ryanair Holdings Plc made an initial takeover bid for Aer Lingus Group Plc during 2006, but this was
rejected by the European Commission on competitive grounds. The company made a second bid in
December 2008, which was rejected by the board of Aer Lingus Group in June the following year, and
subsequently also by all Aer Lingus Group shareholders. However, further bids from Ryanair Holdings may
be possible in the future.

COMPETITIVE POSITIONING
• Ryanair Holdings Plc’s competitive position is based solely on low nominal ticket prices, which are
however supplemented by a substantial number of additional charges. Furthermore, new ancillary fees were
introduced during 2009, while more such charges were discussed for the future. Examples include a EUR40
check-in charge, while at the beginning of the year the company was in the headlines over its plans to
charge for the use of toilets. Overall, Ryanair Holdings’s ancillary charges grew by 23% in 2009, reaching
EUR598 million and increasing their share of total company revenue from 18% the previous year to over
20%. Thus, while average ticket prices were down by -8%, revenue per passenger was only down by -6%.
• Another integral aspect of the company’s strategy is the choice of destinations. Ryanair Holdings Plc tends
to use little-known airports, such as former military bases, for which it is often the main if not the only
airline. Encouraged by local politicians eager to see Ryanair Holdings’s presence as a boon to economic
growth in their region, this policy enables the company to secure conditions that it would never obtain at
larger airports. On purely economic grounds most of these airports would be loss-making operations despite
the passenger volumes that Ryanair Holdings brings, but these losses are compensated for by subsidies from
the public purse. This consideration has led to accusations that Ryanair Holdings’s entire business model
stands and falls on subsidies.
• The third pillar of Ryanair Holdings Plc’s business model and competitive positioning is that the company
is entirely internet-based. This is part of its no-frills strategy since the internet is the most cost-effective
form of distribution.
• Another aspect of the company’s strategy is to target those passengers who would normally use alternative
means of transportation or not go on holiday at all. Therefore, its competitors are not only well-established
air carriers but also coaches, cruise operators, ferries and rail transportation services.
• During the first half of the 2009-2010 financial year Ryanair Holdings Plc achieved growth in passenger
numbers of 15%, although revenues were down by -2%, implying a pronounced decline in average fares.
The company predicted a further drop in ticket prices for the second half of the financial year. However, in
January 2010 the Chief Executive Officer of Ryanair Holdings Michael O’Leary indicated that fares could
go up during the company’s next financial year, which would mark a reversal to four consecutive years of
declining fares.
• Responding to the EUR10 tourist tax imposed within Ireland and what it claims to be excessive charges by
Dublin Airport Authority Plc, sources at Ryanair Holdings Plc said that all of the airline’s growth is
generated abroad, while tourism in Ireland was declining.

Summary 3 Ryanair Holdings Plc: Competitive Position 2009

Product type Value share Rank
Air transportation 28.8% 2
Source: Trade press ,company research, trade interviews, Euromonitor International estimates

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