The global recession affected the entire world economy, as well as the aircraft industry. But low-cost travel does not follow economic trends. Ryanair is planning to buy 50 new planes. Moreover, Michael O’Leary aims to increase passenger numbers from 75 to 85 million over the next two years. This means that discount airlines, including Ryanair, do well during recession. paragraph 14,p. 13) Consumers play an important role in the airline industry. Because of the recession “only low-cost airlines have posted much of a profit or done expansion on routes”. (paragraph 15,p. 14).
Low prices alone do not fully explain their success, flight availability is more important for consumers. A frequent traveler says: “For a lot of us, the shift toward the low-cost carriers is not about price”. (paragraph 15,p. 14) The shift in consumer behavior in the last decade brought benefits to the low-cost airline companies.
The macro environment has a big impact on the future development of Ryanair, but not necessarily in a negative way. Although the current economic situation is not a favorable environment for the aircraft industry, due to the increase in fuel prices, the low-cost companies do well. Comac, the technological ambition for China will bring the benefit of cutting costs for Ryanair and the shift in consumer behavior towards the low-cost companies will increase the number of their customers. The environment is favorable for Ryanair, a booming business, with new flights landing at new airports.
The Business plan on Can long haul low cost airlines be successful
A key question is whether the very successful, largely short-haul LCC business model can work over long-haul sectors? This paper compares the cost and other advantages of LCCs and evaluates how far they might be applied to long-haul sectors. It is estimated that cost advantages might be much lower than the 50-60% on shorthauls. Other factors such as the adoption by network airlines of some LCC ...
