Impacts of Credit Crunch on Ryanair Research Proposal

Impacts of Credit Crunch on Ryanair - Research Proposal Example In February 2008 Reuters reported that global inflation was at historic levels (Reuters 12 02 2008) Ryanair, the first Low Cost Carrier in Europe, it was founded in 1985 (Ryanair.com History 2008). Ryanair began operations with a staff of twenty-five and a single 15-seat airplane flying connecting Waterford and London. In 1986 Ryanair got authorization to begin flying four flights a day on the Dublin-London route. Utilizing the opportunity, they broke the monopoly of British Airways and Aer Lingus with fares that were much lower. Ryanair's strategy (initially) was to offer simple, low-cost fairs and exemplary customer service. During the later part of the 80s Ryanair continued to compete vigorously with British Airways and Aer Lingus while adding additional routes and airplanes (Creaton 2004). In 1990 Ryanair suffered a 20 million loss and was forced to completely restructure. A new CEO - Michael O'Leary - was charged with making the airline profitable. O'Leary visited the USA to study the 'low fares/no frills' model being used by Southwest Airlines. O'Leary promptly determined th at the key to low fares was to implement quick turn-around times for aircraft, "no frills", and no business class, as well as operating a particular model of aircraft (Ryanair About Us n.d.). Regardless of the decline in overall airline traffic, Ryanair made a profit of 293,000 for the year and carried 651,000 passengers. In 2000, they announced the launch of 10 new European routes for the summer and the company launched their new online booking site and in just 3 months the site was taking over 50,000 bookings a week (Ryanair About Us n.d.). After the tragedy of 9/11, the whole air transportation industry suffered a drawback and airline companies had to modify their strategies in order to adapt to the new situation that led to an increase in oil prices and a downturn in traffic (Gloomy Ryanair 2008). Ryanair, instead of cancelling thousands of flights, adapted the opposite strategy (DG TREN - ANALYSIS OF THE EUROPEAN AIR 2001). The company took advantage of empty slots in the airports, which were until the date the biggest constraint in European airports. In 2008 Ryanair is the 3rd largest airline in Europe; it has 31 bases and carries 50.9 million passengers annually (Ryanair Annual Results 2008). The firm's whole story is built on ambitious growth targets.