In our discussion of strategy, we discussed some tactics of of how to implement a low-cost strategy in the airline industry. Several groups had ideas, yet we didn’t have time to discuss how one company would be able to implement them, while others would not (in order to gain competitive advantage). Ryanair is a good example of an airline that is pursuing a low-cost strategy.  They seem to have quite a coherent strategy. They land in less-traveled airports, they have advertising inside the planes (keeps ticket prices lower), they focus on shorter regional flights, they even announced recently that they would start charging to use the in-flight bathrooms (see Ryanair toilets).
But what resources are required for them to pull off tactics like this? I think that it takes some resources that most airlines do not have. Part of it is culture and organizational identity. When I look at this photo, I think that charging for using the toilet would not be as big of a deal as if I were charged by another airline. The company identity seems to be coherent (which we discussed in class), with additional low-cost tactics. They might not work, but I think that they are more likely with Ryanair because they have a coherent identity and strategy. For example, it would make more sense to have to pay for bathroom visits on shorter flights than on longer flights. Since Ryanair focuses on shorter flights, they have an advantage in implementing something like this.

2 Responses to “A coherent low-cost strategy”

1. nachiket says:

   February 27, 2009 at 2:46 pm

   Hans,

   That is a very interesting thought. Here is the link to the article on an Indian low cost airline and how they reduced costs. This was the activity on strategic coherence we did in class.
   http://www.business-standard.com/india/news/fine-strokes/00/06/348472/
2. mulle167 says:

   March 1, 2009 at 4:51 am

   Ryanair is very interesting. Initially, I thought it would be very strange to sell advertising on an airplane, but now that I think about it, why not? You could never ask for a more captive audience.

   I feel that the airline industry in general is a commodity business that thinks like a luxury business. Why does there have to be so many people involved in the process?

   I was surprised to read this on Wikipedia,
   “Ryanair is the third largest airline in Europe in terms of passenger numbers[4] and the world’s largest in terms of international passenger numbers[5]”

   I think that if this is that successful in Europe, it is inevitable that this type of airline will make it to the states, if there isn’t one already. See the ideas post for my idea of a low cost airline.

   Joe