Both airlines create value for the shareholders in the following ways. Both airlines also have similar performance indicators in the aviation sector. They have caught the fancy of those people (in the low-to-middle income bracket) who have found air travel through these low fare airlines as an alternative to other modes of travel road and railways. This will reduce the fare burden on customers by avoiding travel agents. Ryanair Corporate Strategy Vs. easyJet: Competitive Strategy Analysis (Compare & Contrast Essay). EasyJet This puts pressure on the low cost strategies adopted by Ryanair and EasyJet. EASYJET Equity ratio for EasyJet has marginally increased in 2012 compared to the A low working capital means, less amount of non-current liabilities are utilized to finance the current assets. However, because it could not protect this strategic approach from duplication by other airline companies, it lost a significant market share to other companies, such as Easyjet. This understanding shows where the corporate strategies of both companies converge. The success of these two airlines is primarily owing to innovative approach to business as against the age old practices and conventions of their older full fare rivals. easyJet https://www.easyjet.com. The commitment and dedication towards work that stimulates the employees of EasyJet kept its workforce going and provide uninterrupted world class service. Massive flight cancellations led to Euro 50 million loss for Ryanair. External factors like increasing oil price can severely impact fare structure since the fare is already low. Ryanair also emphasizes on providing the most efficient customer service compared to other rival airlines. Both the airlines use frequent-flyer program which is an added advantage over any new entrants. Not sure if you can write a paper on Managing Corporate Reputation the Case of Ryanair by yourself? In Europe, major airline companies, such as Flybe, Wizz Air and Aer Lingus, dominate this space (Dobruszkes 2006). A business enterprise before its establishment needs to study the forces that will impact its profitability, and a tool for such assessment is Porters 5 forces analysis, which includes bargaining power of customers, bargaining power of suppliers, threat of new entrants, threat of substitutes and competitive rivalry. Comparatively, Ryanair flies to Beauvais-Till Airport, which is almost one hour away from the city (Ryans 2009). As such EasyJet has the advantage of providing low fare which will be difficult for new entrants to offer, and also EasyJet has a goodwill attached to its name which is something a new entrant will take years to replicate. Customer satisfaction is another element that this company keeps track of by measuring it online or by passenger surveys. In this case, both EasyJet and Ryanair have a witnessed a declining trend in the ratio from 2010 to 2012. However, EasyJet does not compete with high fare airlines whose customers are mostly business or elite passengers who prefer added comforts and services during flight. In actual numbers the costs remained constant at GBP 103 m, also due to the new policy of You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. Through this strategy, Ryanair became less concerned about existing competition because it was operating in a unique market segment that other airlines had not used before (Ryans 2009). EasyJet is in a better financial position than Ryanair. Furthermore, like Ryanair, Easyjet also bases its corporate strategy on Southwests business model. EasyJet - statistics & facts | Statista 81%, 7. easyJet Evidence of this fact emerges in Paris as a common destination for both airlines. This is the biggest market share in the European low-cost airline sector. It operates almost 1,000 short-to-medium-haul routes in and around the continent. Within this space, Ryanair and Easyjet are the two biggest low-cost airlines in the region (Elderman 2014; Dowling 2010). The same for EasyJet has been 37%, 38% and 42%. The dominant market share enjoyed by Ryanair also mirrors its high customer traffic because, compared to Easyjet, the company carries 4.5 million passengers, annually, while its rival carries 3,000,000 passengers annually (Dowling 2010). It has destinations in many principal cities across Europe. Labor Costs: Ryanair has the lowest labor costs in the industry (6 per passenger vs 9 and 17 for competitors EasyJet and AirBerlin [5]). The two firms have witnessed a decline in gross margin. In order to abide by governments regulations of carbon emissions, Ryanair operates flights that consume less fuel and makes low noise level. easyJet PLC has a consensus rating of Hold with an average target price of 12.42. In tandem, the net worth of the company too has registered healthy growth from GBP 1500 million to GBP 1794 million between 2010 and 2012. Here too it is noteworthy that the base i. e. the total revenue of Ryanair has also grown by 21% during 2011 and by 47% during 2012 over 2010 base year. All rights reserved. From 67 operational bases, Ryanair makes more than 1,600 flights daily. Finally, EasyJet must convince people that it is the safest mode of air travel at lowest cost. 249264. Therefore, the company decided to use secondary airports, where their customers would get efficient services. However in the measure of Return on Assets, EasyJet consistently outperforms Ryanair over the study period of three years (2010, 2011 and 2012).
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