Report on the purchasing at Ryanair

Thèmes abordés

Ryanair, Lansdowne Rugby Club, 7 million passengers, purchasing

Résumé du document

In 1985, Ryanair was established with a share capital of £1 and 25 employees, using a 15-seater Bandeirante aircraft. One year later, Ryanair added two new BAE748 aircraft to its fleet, and carried 82,000 passengers during 1986. In 1987, three BAC1-11 aircraft on wet lease from TAROM join the fleet, enabling Ryanair to have 15 scheduled routes in its network and carry no less than 322,000 passengers, almost 4 times as many as in 1986.

By 1990, Ryanair dropped its Business Class product and closed the Frequent Flyer Club, but re-launched as Europe's first low fares airline, offering lowest fares in every market and moving to a single aircraft fleet type and scrapping free drinks and on board meals. At the same time, Ryanair managed to push its lowest fares even lower, from £99 to just £59. In 1991 and 1992 Ryanair struggled, but 1993 saw more than one million passengers carried in a year for the first time. Then in 1995, Ryanair celebrates its 10th birthday with a big party in Lansdowne Rugby Club, and its fleet reaches 11 aircraft, now all of them being Boeing 737s. In the following 5 years, Ryanair continues its growth, reaching 1,262 employees and over 7 million passengers carried in a year at the end of 2000.

Extraits

[...] The model of purchasing process is as follows: Structure of the network: Purchasing portfolio Matrix In terms of airport selection, the Ryanair Company owns many airlines; it can choose whatever airline it prefers. In this situation, the airport is relative less power to negotiate with the Ryanair Company. The chart shows the position (red dot) of the airport purchasing. FUEL The main supplier of the Ryanair is Jet Kerosense Company, Kerosene is widely used to power jet-engined aircraft (jet fuel) and for some rockets. [...]

[...] Ultra low costs, high ancillaries: The carrier's non-fuel expenses fell from last financial year, reflecting its unswerving focus on cost control. Another reduction in non-fuel unit costs is targeted in FY2009/2010. Extra revenues grew by 23% to EUR598 million, helping Ryanair achieve its target of 20% of revenues last year) one year ahead of schedule. There is still considerable scope for growth in ancillary items and the carrier will do well to continue its focus in this area as underlying fares plummet in the months ahead. [...]

[...] ➢ Moving to a mono-aircraft fleet would generate important economies of scale. ➢ The opportunity to get on time deliveries would allow the company to have a steady growth ➢ The widespread use of the Boeing 737-800 meant cheaper procurement and a large pool of pilots to choose from. The model of the purchasing process: The structure of the Network: The exchanges on the market and the purchasing process should be viewed as an integrating process. The interaction between marketing and purchasing determines the purchasing process. [...]

[...] COMPETITORS Ryanair has a number of low-cost competitors such as: EasyJet, Monarch Airlines, bmibaby, Air Berlin, Germanwings, Transavia, Jet2, SkyEurope, Vueling, Wizz Air, Flybe, Thomsonfly, TUIfly, and so on. In 2004, approximately 60 new low-cost airlines were formed. Ryanair launched strong counterattacks, including substantially reduced prices. EasyJet and Ryanair borrowed their business model from United States carrier Southwest Airlines. Both airlines have adapted this model for the European market through further cost-cutting measures such as not selling connecting flights or providing complimentary snacks on board. [...]

[...] That implies repeated purchasing and detached marketing. Purchasing Portfolio Matrix: As to the number of aircrafts' suppliers is limited .The Ryanair company has no multiple choices. Therefore, the aircraft company is relatively much stronger. The positioning of is plotted as the chart above. With Ryanair we have a demand-driven Purchasing process (see the number of aircrafts for the purchasing strategy in the following chart) through: AIRPORT Ryanair attempts to control airport access and service fees by focusing on airports that offer competitive cost terms. [...]