Ryanair, headquartered in Dublin, Ireland, was the first of the European budget airlines, being modelled on the US carrier Southwest Airlines, and has enjoyed tremendous success under its current CEO, Michael O’Leary. It has kept to the short haul sector of the European market since its deregulation in 1997, with limited routes to North Africa, and with its low cost business model has created a sector for other competitors to enter.  In October 2006, as part of a strategic review, Ryanair launched a bid for Aer Lingus, another Irish airline. However, industry regulation kept them from succeeding, although they retained their share until Aer Lingus was taken over by IAG in 2015.

Whilst the sector has become more competitive, Ryanair has continued to generate profits, more recently through a more focussed approach to customer service and extending into the business traveller sector.  However, a strategy of market penetration has its limits, and Ryanair may need to secure new revenue streams for the future.

Using the associated case study, you are invited to assess whether their strategy in the short haul sector is sustainable, and where future growth may come from.

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