Undertake A Marketing Audit For An Airline Or Hotel - Case Study Example

RYAN AIR Name Institution Lecturer Course Date Company Overview Ryan Air is an Irish airline that has low cost services and is based in Dublin Ireland. The airline has its operation in the Dublin airport and Stansted airport. The Ryan Air Company began its operation in 1985 and had passengers between Waterford airport and London Gatwick. According to Allaz, & Skilbeck (2005), during its initial operation, the company has about 5000 passengers. By the year 1989, the company had a total number of 365 employees with a total number of passengers of about 6000. Despite its growths, the cost of the airline grew drastically resulting in losses of about 20million pounds in four years. In 1991, the management of Ryan Air was changed which resulted in a major overhaul of the business organisation. The new management was able to adopt the southwest airline operation framework which was based on low cost services. In addition, the company was able to reduce the number of routes from 9 to five. According to Boesch (2007), by the year 1997, the company had increased its routes up to 21 and was operating in Ireland and the United Kingdom. As a result of the low cost services, the business organisation recorded tremendous growth over the years. Currently, the Ryan airline is the biggest budget airline in the world with a total number of 5290 employees. Between the year 185 and 2011, the number of Ryan air passengers have grown from 5000 to 150000. This makes the first European cheap airline which has been able to maintain low cost services (Boesch, 2007). Financial Audit of Ryan Air Company In order to understand the financial audit and the marketing audit, it is crucial to understand the ways in which a company is able to expand its operations. Hence, the profitability, and returns of shares in the business organisation is crucial. In addition, understand the revenues, costs and other metrics is also important. Profitability and Share Returns Although the Ryan air company offers low costs services, the business organisation is among the most profitable organisations in Ireland and the world at large. The company was affected by the global financial c rises in 2008b/ 2009n but was able to rebound back. In 2012, the company was able to realise a profits of 747 million US dollars a total revenues of 5855 million USD. This means that the business organisation was able to post net profits of about 13 percent. This was almost twice the profits that was realised by some of its competitors such as EasyJet (Ryanair, 2012). Costs and Revenues The business organisation has been able to maintain its costs as well as increase its revenue over a long time. This has enabled the company to expand its operations from Ireland to the United Kingdom. The rental expenses of the business organisation have remained relatively small as the business organisation is able to finance most of its planes. In the year 2012, the rental expenses of the company reduced by 6 per cent. This enabled the company to channel its finances to other activities of the company. In addition, the business organisation has a way of depositing some of its air crafts when they are still having economic values. For example, its depreciation is valued after 23 years; the air crafts still have a good economic life. The revenues of the business organisation are from passengers. There was an increase of passenger related revenue in 2012. In addition, other non-flight related revenues such as internet use and other in-flight services increased in the same year by over 77 per cent (Ryanair, 2012). Competitive Analysis According to Morris (2008), the main challenges that have faced the United Kingdom airline industry is the emergence of low cost fuels and low cost airlines in the market. However, the low cost carriers in the United Kingdom have lower market shares hence cannot actively compete with those that have large capital bases. Despite the effects of the global financial crisis, the European airlines were able to records and increase in flights. However, the cost of jet fuels is still a challenge. The emergence of new airlines in the European market has also resulted in internal rivalry in the country. Although no airline has a biggest market share in the United Kingdom market, there is little rivalry that exists in the sub-industry. Despite this Ryan air has been able to be among those airlines that dominate the low cost carriers. There is also the issue of new entrances and those that exists the airline industry. For airlines that are starting their businesses, the challenge is facing the competition from the well-established business organisation. In addition, there has been the issue of limited airport slots fort the business airline that in entering the airline industry. Moreover, there are government regulations that control the airline industry. Despite these challenges, the low cost carrier in the United Kingdom has been able to have a tremendous upward growth for quite some time (Morris, 2008). SWOT Analysis In order to compete well in the market, a business organisation needs to assess and determine its areas of weakness and strengths. A SWOT analysis establishes the strength, weaknesses, opportunities and threats that are available for a business organisation. These are referred as the internal environmental factors that affect the business organisation. The Ryan air’s strengths are in the fact that the business organisation was the first airline to offers low cost services in the aviation industry in the European market. This means that it enjoyed monopoly in offering the services. With a starting staff of only 153 employees, the company had all the opportunities in the market t and was able to expand easily. The Ryan air is also the biggest budget airline in the United Kingdom that operates in the United Kingdom, Ireland and other parts of Europe. Currently the business organisation has more than 200 planes that operate in different routes in Europe. Apart from its success, the business organisation has made losses of over one million euros this loss was insignificant when compared to the number of low costs airplanes operating in the region. Strengths Among the strengths of the Ryan air company is that it enjoys low costs of operations. The company is able to provide different flights from one point to another and not from one central hub. This reduces the costs of operations for the business organisation. In addition, the Ryan air operates its business in smaller airports that require small amount of money to operate. Since the business organisation operates in short haul flights it is able to finance the low costs passenger services. Impressive fleet The Ryan air has a biggest fleet career for low costs carrier. Most of its air planes are Boeing which is able to carry around 200 passengers. In addition, the Ryan air uses the same type of aircrafts in all its operations hence lowering the costs of operation and the costs of spare parts. Moreover, the Ryan air does not need to buy special spare parts for other type of aircrafts as they use same aircrafts for different operations. Routes Network The Ryan air has a huge network of routes within which it can operate. The Ryan airline has over 1000 airline routes in the European region and Ireland. It also has routes which act as holiday destinations such as morocco. Weaknesses Although the business organisation has been experience growth, the profit margin is still low. In addition, the profits have been decreasing due to high fuel prices that face the airline. In addition, Ryan airline has faced a lot of criticism from different organisation and rivalry groups. For example, the Ryan airline has been criticised for the fact that they offer low cost planes but charge everything else in the aircraft. Opportunities Since most customers are faced with financial challenges the Ryan airline stand a better chance of capitalising as many people look forward to save. This was evident during the global financial crisis when the airline made enough profits despite the crisis. Threats The Ryan air has been threatened by price wars from other low costs carriers and other well established airlines in Europe and other parts of the world. In addition, the increasing oil prices have been a major challenge for the Ryan airline. From the internal analysis and the financial and competitive audit, it is clear that the most basic findings are that the company has been enjoying good profits despite the low costs of its services. This has enabled the business organisation to expand its operations and focus on customer services at low prices. In addition, the company has enjoyed as the biggest low cost carrier service provide in euripi. This means that the business organisation was able to command a big share of the airline industry in budget airlines. This means that the business organisation was able to enjoy good completion in terms of market share (Boesch, 2007) Conclusions and Recommendations The Ryan Air Company began its operation in 1985 and had passengers between Waterford airport and London Gatwick. During its initial operation, the company has about 5000 passengers. By the year 1989, the company had a total number of 365 employees with a total number of passengers of about 6000. Ryan air has been able to survive well and maintain an upward growth since it was established in 1985. The success of this airline is due to the ability of the business airline to command a good market share in the industry. In addition, the industry has been conducive for the company to make profits. Although the Ryan air company offers low costs services, the business organization is among the most profitable organizations in Ireland and the world at large. This reduces the costs of operations for the business organization. In addition, the Ryan air operates its business in smaller airports that require small amount of money to operate. Although the company has been faced with a number of challenges, it has managed to emerge as the biggest low cost career in Europe and in most parts of the world. The company enjoys the streets such as low costs of operations as it uses the same aircrafts for different operations. This enables the company to minimize it costs of operations. Intensive competition from new extracts and the effects of the global financial crisis are among the major challenges that the Ryan air has faced. In addition, the increasing fuel prices have decreased the profit margin for the company. However, the increases travel to the European cou8ntyrues, demand for low costs careers and low supplier power has enabled the business organization to expand its operations in the United Kingdom. . References Allaz C. & Skilbeck J 2005. The History of Air Cargo and Airmail from the 18th Century. Christopher Foyle Publishing; First English language edition. Boesch F 2007. The Ryan Air Model - Success and Impact on the European Aviation Market. GRIN Verlag Morris P 2008. Macro-economic trends in the aviation industry. Australasian Air Finance Conference SYD. Available at http://www.ascendworldwide.com/userfiles/Australasian_AirFinance_Conference.pdf. Accessed on 28th April 2014. Ryanair 2012. Ryanair Annual Reports. Available at http://www.ryanair.com/doc/investor/2009/Annual_report_2009_web.pdf. Accessed on 28th April 2014. Read More