Scientific Research Institute of

Behavioral Psychology (SRIBP)

CAN LOW COST AIRLINES BOOM IN

THE AVIATION INDUSTRY TO REACH

LONG HAUL DESTINATIONS

(The Case study of Ryanair)

RESEARCHERS: RIFFAT FAIZAN, HARRITH VIJAY,

& ADNAN UL HAQUE

August 2014

Word count: 7,001

Abstract

This research project is carried out to investigate the possibility and expansion chances

for the low cost airlines in the long haul destinations, under the case study of RYANAIR.

The researcher has used hypothetico-inductive-deductive model in order to explore the

growth and opportunities for the selected company by circulating survey questionnaire

and interviews with the staff and management.

The results showed that there are certain barriers for the low cost airlines to enter in

long hauls. Despite these barriers, there are chances of making high profit. The

perception of people is that low cost airlines are value for money with moderate quality.

However, low cost airlines are not considered as excellent one because it is usually the

preference for people who wants to travel for less price and quick trips.

Present study has certain limitations such as time constraint and small sample size

therefore the results cannot be generalized to all low cost airlines, apart from the

selected case study.

Sr. Table of Content Page No.Abstract 2

1 Chapter 1 : Introduction

1.1 Background and Context

1.2 Overview of Company

1.3 Aim

1.4 Objectives

1.5 Research questions

1.6 Significance

1.7 Review of chapters

5

2 Chapter 2: Literature Review

2.0 Introduction

2.1 Theories

2.2 LCC network routing system

2.3 LCC strategies, variables and operation

model characteristics

2.4 LCC model in long-haul airline operations

2.5 Summary

9

3 Chapter 3: Research Methodology

3.0 Introduction

3.1 Research Design

3.2 Research Philosophy & Approach

3.3 Sampling Technique

3.4 Population and Sample Set

3.5 Research Instrument

3.6 Data Collection Process

3.7 Primary Data

17

3.8 Secondary Data

3.9 Data Analysis

3.10 Validity

3.11 Ethics

4 Chapter 4: Finding Analysis

4.1 Introduction

4.2 Survey Questionnaire

4.3 Summary of Interviews

22

5 Chapter 5: Results and Discussions

5.1 Introduction

5.2 Discussing present findings with previous

researches

31

6 Chapter 6: Conclusion

6.1 Introduction:

6.2 Conclusion

6.3 Research Limitations

6.4 Future Implications

33

Bibliography 35

Appendix 1 (Interview Sample)

Appendix 2 (Survey Questionnaire Sample)

Appendix 3 (Company Credentials)

CHAPTER ONE: INTRODUCTION

1.1 Background and Context:

The study conducted by Button (2012) revealed that there are certain reasons behind

the failure of the short haul low cost airlines reluctance while entering into long haul

routes. In the recent times, Europe has suffered from major decline in its economy due

to recession in 2008 but tourism industry is one significant contributor to the GDP of

different countries in Europe. In times of crises, tourism sector has given significant

support to the economy; this is where aviation industry is linked as a subject of interest.

From the European Aviation Authorities (EAA) report was issued that confirms strong

revenue growth by airlines towards GDP (BBC, 2011). Based on the fact, it is significant

to find about the good performing airlines' future in the long haul that whether they can

boost and prosper in the long haul as it has done in short haul.

1.2 Company Overview:

As per official site of Ryanair (2012), it is Irish airline established in 1985 with a strong

low cost airline image. Within 12 years of its operations, it has expanded its operations

into other European countries with short haul. Today, it is regarded as leaders in the

lost cost airline, as in 2009 it was carrying more than 66 million passengers in entire

Europe (Ryanair, 2010). As per Button (2012) there is no doubt that company's

strategies and policies are effective and efficient in successful transformation of ongoing

operations. Despite being a leader in low cost airlines, it is not willing to experiment with

long haul on regular basis in other far continents.

Ryar Airlines is one of the pioneers of original low-cost operating model and were the

first to effectively implement the model as well. The low-cost model is distinguished their

selves through product specification and operating features. The product features

consisted of: (a) low, straightforward, and unobstructed fares; (b) high frequencies; (c)

flights operating on point-to-point factor; (d) no interlining; (e) effective use of travel

agents and call centers to encourage ticketless travel; (f) single-class, high seating

compactness ; (g) no seat assignments; and (h) lack of meals or free alcoholic drinks.

Some of the operating features consist of: (a) solitary aircraft style with greater

utilization, (b) secondary or uncongested airports provided with short aircraft turns, (c)

short sector length, and (d) competitive salary with the concept of profit sharing and

high productivity (Alamdari & Fagan, 2005). On the other hand, the Southwest’s

business strategy has develop over the past 40 years, indicating that the low-cost model

has proven to be effectively utilized by various airlines worldwide.

1.3 Aim:

The aim of present study is to investigate "can low cost airline boom into aviation

industry to reach long distance destinations".

1.4 Objectives:

The objectives of the present study are as following:

To critically investigate the models and theories related to low cost airlines in the

expansion of Ryanair's approach for advancing into long haul routes.

To carry out a survey in order to investigate the perceptions and expectation of

the passengers regarding Ryanair's opportunity for long haul routes.

To investigate the factors that causes a blockage in the transformation of short

haul routes into long haul routes.

To recommend operational and marketing strategies to Ryanair for further

improve on its present working efficiencies.

1.5 Research Questions:

Question 1: "What is the possibility of successful transformation from short haul to long haul for Ryanair"?

Question 2: "What are the main obstacles that hinder Ryanair from stepping into long

route destinations"?

1.6 Significance of research:

Since recession the approaches and strategies of the aviation business has changed to

large extent, therefore it is essential to carry out a research to gain the insight about

research problem in aviation industry in the constantly changing environment.

Furthermore, there is limited literature on this topic which increase the significance of

the research project as it will serve a strong foundation in shape of managerial

literature. In addition to that, all previous studies related to 'low cost airlines' are uni-

dimensional in nature. The entire previous studies related to low-cost business model

included only consumer's perspective whereas present study include a very significant

factor of interviewing with the management of the selected case study to explore their

perspective and approach in relation to research questions.

1.7 Overview of the dissertation:

This part of the dissertation explains the structure of the dissertation by giving idea to

the reader about upcoming next chapters. The structure of the present research project

is as following:

1.7.1 Literature Review: This chapter contains the models and theories related to low

cost business models. The work of previous studies is critically examined to reflect the

research variables of present study in their work. It serves as an important foundation to

generate data for the present study.

17.2 Research Methodology: This is third chapter of research project that justifies

researcher's approach in the present study to carry out investigation. This chapter

mainly discusses the research process, design, sampling size, research instrument,

research ethics, and limitations.

1.7.3 Data Findings: This chapter reflects the findings of the present study generated

from the primary sources by using research instrument. The results of survey

questionnaire and summary of interviews with the management are included in this

chapter.

1.7.4 Analysis and Discussions: The part of research project compare the present

findings with the available literature. The analysis and discussion is made to ensure that

whether the findings are consistent or differs with previous findings.

1.7.5 Conclusion: This is final chapter of research project that concludes the research

work. In this chapter, researcher summarizes the findings to ensure that all research

objectives are accomplished. Furthermore, this chapter also contains research

limitations, followed by future implications and consideration.

CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction:

This part of the dissertation contain theories and models related to research problem

and evaluate the previous findings. Literature reviewing is in actual an activity that

begins before actual research and continues until research aim has been attained

(Sekaran, 2010). Therefore, it is vital to review the work of the other researchers in

order to generate the data for present investigation.

2.1Theories:

The past research, Alamdari and Fagan (2005) suggested that over the period of time

industry has experienced disappearance of Southwest’s original model in search of

attaining a competitive advantage, However, the more an LCC stays connected with the

original model, the elevated operating margin can be accomplished. Francis,

Humphreys, Ison, and Aickien (2006) support the findings further.

The businesses that have attained few low cost characteristics of the ‘Southwest model’

tends to have higher tendency to fail. The authors do predict an ongoing success of the

low cost concept of ‘Southwest model’ however the airline industry’s turbulence is

complicated that often restricts the effective forecasting for individual low cost airlines.

(p. 93)

The original low-cost model pursues a cost leadership strategy where an airline is set to

establish low cost operating producer in the industry through the sell of standard no-frills

product. The great emphasis by such companies is on the reaping scale or advantage

of absolute cost from various and all sources (Alamdari & Fagan, 2005). Majority of the

LCCs at present has focused on using a differentiation strategy through which an airline

ensures to accomplish a unique standard and sustain diverse range of dimension that is

perceived valuable by buyers in broader prospect. The in exchange of the uniqueness

the premium price is attained as a reward.

“Regardless of the deviating from the original model, LCCs have yet not accomplished

a price premium as a reward for extra service offerings they provided” (Alamdari &

Fagan, 2005, p. Of 380).Worldwide LCCs, Europe’s Ryanair operating system includes

majority of the operating and product features that are similar to the original model

along with the greater operating margin (Alamdari & Fagan, 2005).

An comprehensive understanding of Ryanair’s operating and product’s characteristics

assist to demonstrate how adherence to the low cost model is a significant facto.

“Ryanair in fact is an authentic ‘low cost and no frill’ LCC, with a firmly operating on

point-to-point system, overall economic configuration with no seat portion at check-in,

with no selected cargo facility, no in-flight ‘frills’ and certainly no frequent flyer program”

(Alamdari & Fagan, 2005, p. 383). Furthermore, Ryanair provides internet and call

center ticket sales, eliminating the need travel agent distribution mode.

Additionally, Ryanair pursues the original model in its all entirety which is relevant to the

operational features. “Fleet unity provides airline with greater flexibility for effective

deployment of crews, normalizing the ground equipment requirement, leads to minimal

maintenance costs, and minimizing the training requirements and costs” (Alamdari &

Fagan, 2005, p. 383). Extensive utilization of aircraft with 25 minute average turns with

diminutive stage lengths, as well as servicing uncongested secondary airports, all

assist to enhance the Ryanair’s productivity (Alamdari & Fagan, 2005).

Research performed by O’Connell and Williams (2005) measure the passengers’

selection criteria between the full service airline and low cost carriers. On average, the

fares of LCCs were 40 to 60% inferior to full service providing competitors. Ryanair’s

fares were extensively low stimulating the markets, which is often unthinkable for the

other carriers. As per O’Connell and Williams’s findings, The presented evidence affirms

that basic differences in passengers’ perceptions towards incumbent and low cost

airlines is that they often select low cost carriers chiefly because of the lower fares they

offer, whereas passenger selects full service airlines due to the additional services

provided (2005, p. 271) Their study further confirmed that the brand reputation has been

established by the low fare airlines where 65% of passengers do not consider alternate

carrier when booking travel (O’Connell & Williams, 2005).

Particularly, “In exchange for higher fares travelers are often willing to connect through

secondary airports and consider no frills. The counteractive strategy for retaining

customers is offering a wide and complex range of airline products.” O’Connell &

Williams, 2005, p. 271)

Ancillary revenue, In present years, ancillary revenues has been playing a fundamental

role in the airline’s profit. As per Amadeus Review of Ancillary Revenue Results, airlines

generated $22.6 billion alone in year 2011 which has been a increase of a 66%

increase from 2009 (Lovitt, n.d.).

Budget and Low-cost carriers were acknowledged as “ancillary revenue champs” using

ancillary fees to generate 20% of revenues (Fallert, 2012). Ancillary revenues are

produced through unbundling pricing and establishing three types of fees: (a) “a la carte

items”, (b) through partnership providing commission-based items (c) frequent travel

programs (Fallert, 2012). As per Fallert (2012), There are various reasons an airline

considers unbundled pricing: (a) internet and fare search engines significantly enhances

the pricing transparency and the ticket’s face value has become the driving factors

towards customer purchasing behavior, (b) The oil and jet fuel prices stays elevated

impacting the airline profitability, (c) airlines endorse the concept of that unbundling

demonstrates the advantage for the client as they are only charges for the services

they choose, and (d) ancillary fees symbolize a greater revenue potential with

unexpected margins.

In the recent years, there has been an increase in LCC concept has been supported by

the high stress within the aviation industry and airlines market produced due to the

sudden fluctuations of economic conditions (Aldamari and Fagan, 2005). The LCC

model makes reference to the low-cost scheduling airlines or no frill sector. The main

customer criteria of LCC is its leisure and business passengers (Williams, 2002).The

liberalization and deregulation has significantly assisted LCCs to attain market share

and generate profit. Customer’s of LCCs are given greater accessibility to travel with

the low price offering (Gillen and Ashish, 2004). During the past years, LCCs has

expanded approximately at 25% per annum with the region of EU. In addition the

carrying nearly10% of short-haul EU flights, which is the fundamental part of their main

business. By 2010 LCCs were expected to increase and carry over 33% short-haul

flights in the market, what demonstrated a significant opportunity for airports to enhance

their revenues by providing service to LCCs (Graham, et al 2003). Figures 1 and 2

illustrate how effective and successful low-cost model have been in the short-haul

airline industry. At present, some LCCs are operating in long-haul markets, such as

Austraila’ JetStar servicing Far East. As per Forsyth (2007) it is possible to LCCs

probably will appear in the long-haul market in future.

2.2 LCC network routing system:

The fundamental strategic approach is to provide short-haul point-to-point services

(Gillen and Ashish, 2004). LCCs has place focus on their traffic flows approximating a

careful number of major nodes (Reynolds-Feighan, 2001). These nodes establish the

LCCs point-to-point routing network system.

The most of LCCs palce focus on point-to-point flights however some LCCs such as

AirBerlin utilize HS network system. Usually LCCs does not place emphasis on traffic

connection, even though they exist in it, but passenger must accomplish it by

themselves (Gillen and Ashish, 2004). As growth enhances, few LCC’s network

consisting of point-to-point comes under quasi hub-and-spoke system, with one way

fare only (Aldamari and Fagan, 2005). This contributes to expand LCCs networks

expansion and augment their destination number through making independent flights

(point-to-point) to a hub (Aldamari and Fagan, 2005). Several LCCs can provide

connections in combination with the original one-way fare in order to be effective in

serving various origin/destination points that is not connectable through point-to-point

system.

2.3 LCC strategies, variables and operation model characteristics:

The main attribute of LCC business model is its cost reduction costs and fares largely

(Hunter, 2006). The main operation strategies of aircraft in order to be low-cost carrier

are: reduce turnaround times, augmented flying hours, effective exploitation of aircraft

utilization and increasing the number of aircraft seats to maximum availability.

Ryanair is one of the highly profitable LCC carriers in EU region and it is the bordering

model to the innovative Southwest model: there is no evident provider of services in

terms of food, jet ways, refunds, frequent flyer programs, print tickets, travel agents and

connections. Duty free and food items are sold on board (however EasyJet does not sell

any duty free items on baord). The tickets are sold in direct manner through internet or

call centers. Some the adapted strategists of LCC to enhance their revenues are:

utilization of the seatback trays for advertisement, aircraft exterior and head rests.

There is also an offering of travel insurance, travel reservation and car rentals.

The application of operation strategy apply by few airlines such as Raynair and

EasyJet is outsourcing everything excluding their airline pilots, cabin crew, head office

function staff, reservation agents, and in some instances the maintenance staff. The

strategy enables airlines to expand aggressively while sustaining advantage in

negotiation with airports and documenting long term contracts. Whereas, other LCCs,

such as Southwest, do not outsource their operation and look for common labour

awareness, loyalty and excellence in quality service (Gillen and Ashish, 2004).

Low-cost airlines utilize general aircraft type for their flight operations such as a unified

fleet B737. At the present, several airlines have shifted their operation strategy , for

instance, EasyJet operates a second fleet A319s instead of B737 due to the attractive

price and enhance the operation costs.

LCC Characteristics: LCC Model Strategies

General strategy Size Operation costs reduction and cost

leadership

Operational mode: Southwest, EasyJet and Ryanair are some

of the big airline but generally LCC airlines

are smaller than FSC airlines, offering

Point to point, no connection, short-haul

(400 to 600 nautical miles). Consistent

aircraft type (Boeing 737) greater seat

compactness and high capability

utilization with short turnaround time

Market: Contemptible air travelers market sector,

choice of flight with greater booking time.

Minimum flight change flexibility to change

flights, No food and drinks during flights,

usually use secondary airports, Several

carrier outsource ground service

Inventory Management: E-Ticket or ticketless travel, elimination of

agency. Using internet booking or direct

Table 1: LCC Characteristics and Model Strategies

Usually, LCC flies from secondary/regional airport to another secondary/regional

airports, however in the present day few LCCs serve main airports (hubs) for instance,

Amsterdam Schiphol to service their business passenger (Gillen and Ashish, 2004). To

establish and distinguish theirselves various LCCs such as WestJet has added light

snacks, a small assortment of beverage and seat selection at check-in. Whereas

Ryanair sells in-flight services for additional cost (Guillen and Morrison, 2003). In fact

each and every LCC has established their individual cost leadership, differentiation and

focus strategies to draw more passengers and enhance their growth.

There are various variables that impact the LCC model such as number of flights,

various destinations connections, frequency and greater number of routes based if they

are not big enough they may not be able to have augmented network to compete with

its other market LCCs or FSCs competitors (Dobruszkes, 2006).

2.4 LCC model in long-haul airline operations:

The Association of European Airlines (AEA) has established a long-haul flight that

operates more than 6 hours or more, in contrast its medium-haul (Graham, et al 2007).

It has been established that LCC model is less attuned with long-haul flights. Shorter

routes offer significant opportunities to accomplish and become cost advantage. In a

long duration or long haul operation , the flight and passenger’s requirement of

minimum quality in service provide can diminish the possibilities to minimize operation

costs for long-haul carriers utilizing LCC strategies. Moreover, in various short-haul

strategies, for instance, seat pitch size present challenge in effective application in a

long-haul operation. FSCs tend to have minimum seat mile costs in long-haul

operations comparing to LCCs in a short-haul operation. Therefore they are effective in

offering competitive long-haul fares. During the eight hours flights catering service is

required, in-flight entertainment becomes important, the number of toilets has to be sign

cant to accommodate passengers along with the greater number of baggage to be

Lastly, hubs are fundamental for long-haul flights (Humphreys et al, 2007). Whereas

FSC already are implementing and utilizing the e-ticketing and e-marketing.

LCCs avoid to carry cargo however they diminish the waiting times i.e. turn around,

Whereas FSC carry large cargo in their long-haul flights to enhance the revenues. LCC

models operate with secondary airports, whereas long-haul flights find secondary

airports challenging in terms of operations due to the lack of capacity to effectively

provide runaway and terminal service for large aircraft, Therefore the need for investing

in new infrastructure would arise costing in hiring extra crew.

Low-cost long-haul business often take place in highly leisure markets due to the

minimal demand for high frequency. Also, with the impenetrable point-to-point markets

in terms of modest market share to function one flight per day (Humphreys et al, 2007).

New airlines are implementing new and fresh low-cost long-haul strategies such as

Mytravel (extra payment for for food and entertainment), Wardair (high-quality but high

density seats), Britannia (29in seat pitch) and Emirates (full service at low fare)

(Graham et al, 2007).

The main concerns for a long-haul low-cost model is the increase in distance which

increases its operating cost while decreasing the unit costs. This is an aspect that

manipulate the cost such as : fuel burn, maintenance cost, passenger services cost,

crew cost, over-flight, security necessities, airport amenities and turn-around times,

route compactness and distribution disputes. In order to emerge successfully the long-

haul and low-cost airline must ensure its discover the advantages in these stated factors

and explore markets where lower fares can be lucrative. Some effectual characteristics

of these models are: well-built local catchment areas, prosperous leisure and VIP traffic,

recurring and economic balance, availability of peak-time slots and seven to twelve hour

length (Wensveen, 2007).

Opportunities may emerge and can be established for long-haul in combination with

solid short haul network (Hind, 2007). Long-haul low-cost carriers must emphasis on the

establishing niche markets with the likelihood of connecting with other markets

(Wenseveen, 2007).

New and advance aircraft technology such as A380 and B747-800 can significantly

diminish the unit costs undercutting the cost of seat mile. Small aircraft with high-

density outline and long-haul point-to-point operation capability such as B787 and A350

could be utilized to as a unified fleet.

2.5 Summary:

From the above literature, we have developed the concepts related to LCC strategies

and business models. By now, we understand that what are the important elements and

factors that are hindering the low cost airlines to expand in long distance destinations.

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction:

The present chapter explores and evaluates various important aspects of the present

research and discovers the on hand analysis. The chapter initiate with the design

elaboration pursued with the philosophical aspect and approach originated to conduct

the present research. Furthermore, the research method, research style, tools and

sample size, research reliability and validity as well as pilot study is elaborated in a

comprehensive manner and thus the explanation is concluded with the ethical

consideration in the ending session.

3.1 Research Design:

The cross sectional design has been selected for the detailed exploration of the

research problems on hand. The selection of the cross sectional study is primary due to

the time subject. The research time being a extensive constrain, thus the longitudinal

research was not considered furthermore the approach would have required extensive

time. As per Saunders et al, (2009) research onion assist researchers to decide on the

suitable research method founded on the research philosophy. The research onion

structure is utilized in the present research to give details on the research philosophy

and ensure the selected method that is productive.

3.2 Research Philosophy & Approach:

The study analysis subjective nature along with the in-depth research trend

demonstrates the philosophy as ‘positive’. The philosophy assist the researcher to

establish a correlation between the on hand variables in comprehensive and detailed

manner with the in depth analysis on a present research’s subjective nature. The

approach comprises of both, qualitative and quantitative method; this method enables

the coherent incline of the research understanding of diverse range factors that exist

within the aviation industry. Thus, hypothetic-Inductive-deductive model is utilized to

ensure the attained data information from diverse range of sources are all collaborating

with the specific notion.

Qualitative approach mechanism works with detailed interviews, enabling to use

minimum time to collect the information through detail analysis, the effective technique

is fundamental for such determination (Sekaran, 2002). The qualitative research method

utilizes various tools such as well-structured questionnaire comprising of close-ended

questions. A step make certain that applied tools are implemented in an adequate

applied in an suitable manner with customized and appropriate mix that meets the

present research requirements.

3.3 Sampling Technique:

The present research sampling technique is fundamental as it allows the researcher to

consider between the two most essential sampling types, (a) probability and (b) non

probability sampling. Through vigilant analysis, the present research has selected non-

probability sampling method for its capability to be performed in a minimal time. In

addition, the researcher has utilized "Convenience based sampling" technique in the

present research. The elevated advantage is the generalization factor of the technique

that provides greater convenience for the research process to be initiated within the

outsized socio economic environment which relates with the generalized outcome.

Though, the “stratified sampling technique" use would have provided sufficient results

for instance , in British Airways case due to its wider range of workforce working it

worldwide the chances of outcome generalization would have been significantly

reduced. Thus, the extensive and higher demand of the generalization requirement led

to the use of convenience sampling in the present research.

One of the research instrument used was the interviews with the management. The

technique demonstrated to be beneficial in intricate on the management prospective

and ongoing operational activities. The present research has used “Value survey model"

research questionnaire. The research instrument, questionnaire was distributed by the

researcher personally among research participants to eliminate the risk of respondent

manipulation and inaccurate results.

3.4 Population and sample set:

At the research commencement, 220 respondents were considered by the research due

to the optimal population size however, 120 participants were selected for sampling

size. This was due to the difference in timeframe and huge distance leading to the

further reduction of sampling size to 100. Hence, out of 120, 100 respondents were

considered as sample set. The selected sample set was than further segmented in

three parts; Main Head quarter, St. James's-Piccadilly and Heathrow International-

London correspondingly.

3.5 Research Instrument:

The personally designed "survey questionnaire" is one of the most essential research

tool. The survey questionnaire is segmented into two parts correspondingly that is, A

and B. The initial part, part A, comprises of the demographic portrayal relevant to the

respondents background information. The segment includes five questions however the

second part , part B has fifteen questions stated on it that assist research to affirm the

association that takes place between the activities of operational management activities

and five indicator’s of performance and their effectiveness in accomplishing competitive

edge in the marketplace.

Furthermore, the close ended questions are kept a part of the questionnaire to keep the

research respondents connected with the topic and eliminate chances of deviating from

the sole of the present subject. Another important and fundamental significant reason

for utilizing the close-ended questionnaire is to explore the relationship between the

variables of the present research. The derived results are ranked through the matrix

degree base questionnaire, where preliminary starts options to choose from. The

present researcher applies the same rules as the research conducted by Christie, Won,

Stoeberl & Baumhart, (2003) used. This is all prepared to make certain the relationship

between independent variable and their impact on the dependent variable is considered

within the present environment this further assist to properly evaluate the moderate

variable

3.6 Data Collection Process:

The researcher of the present research gets involves personally in attainment of data to

ensure that the entire process is conducted without overlooking important aspects. The

present research age bracket was 18-55, as majority of the travelers are among the

same age group. Once the target audience was decided for the present research

analysis the attainment of the data from primary and secondary sources became

following important step in the process.

3.7 Primary Data:

The two fundamental procedures for data collection are the secondary and primary

research methods. The primary sources are the first hand data source that is reached

by the researcher to attain data information. The data from primary source is considered

more valuable as it comes directly from the contact and as less chances of

manipulation. Furthermore, the research confidence level stay elevated due to the

authenticity of the research. According to Kumar (2009) observation, survey

questionnaire, and direct interviews are some of the primary methods of collecting data

that is significantly reliable due the researcher’s direct contact with the research

respondents however the cost of such method is extensive. The present research

analysis consists of technique such as face to face in depth interviews and telephonic

interviews with the selected respondents to attain information in a direct manner. In

addition, another source for primary data collection is survey questionnaire, which is

utilized in the present research.

3.8 Secondary Data:

Secondary data is termed as second hand data where there is no directly involvement

of the researcher and the information is attained through information that in available

from before such as books, newspapers, journals, articles, etc. However this method is

least expensive the accuracy cannot be affirmed. The researcher has utilized both

primary as well as secondary data source to gather relevant information and data and

have adequate material to answer the research question.

The researcher uses the secondary sources to collect the information whereas the

primary source is used to reach the conclusion in the presence of essential information.

Thus, both sources, primary and secondary are utilized in present research.

3.9 Data Analysis:

Since, the present research is a mixed research, it use a combination of both primary

and secondary data sources to develop a qualitative-quantitative research approach.

Interviews gives the research a qualitative aspect whereas results attained from

questionnaire expressed numerically provides quantitative details. According to

Saliowsky (2005), in order to establish a relationship between both dependent and

independent variables, thus frequency method is considered an important tool. This

helps to explain the research purpose in detailed.

3.10 Validity:

To arrive at an authentic conclusion validly is considered a vital factor. The check is

initiated at every stage of the research to ensure results are accomplished successfully.

The researcher remains present during the distribution of the questionnaire with proper

application of the statistical tools to gather, analyse and prepare the outcome.

3.11 Ethics:

One of the most crucial aspects of any research is ethics, which cannot be

compromised. Throughout the process notion has been applied by the research. In

addition the respondents are informed in an appropriately manner on the research

process with the assurance that the attained responses will be confidential and only for

the research purpose. Moreover, the participants' names are also kept confidential to

have their privacy. The information in the appendix is only for the record keeping In

addition, the views and opinions of the participants related to their jobs are would not

be exploited.

CHAPTER FOUR: DATA FINDINGS AND ANALYSIS:

4.1 Introduction:

This chapter contains the findings generated from the survey questionnaire and

interviews with the management, crewmembers, and travel agents related to research

investigation. The findings of the survey is presented through tables and pictorial charts

in order to explain it in more transparent manner. Researcher has used simple

percentage calculation as statistical technique to have high generalizability.

4.2 Survey Questionnaire:

Q 4.2.1 Do you think Ryanair is low cost airlines?

95%

2% 3%

Ryanair is low cost airline

YesNot SureNo

In response to first question of survey, majority of the respondents agreed that Ryanair

is a low cost airline (95%). Results showed that 3% were not sure whereas 2% feel that

it is not a low cost airline.

Q 4.2.2 Do you think Ryanair is suitable for only business travel and short hauls?

80%

10% 10%

Ryanair is only suitable for business travel and short hauls

YesNot SureNo

The findings of the present survey questionnaire revealed that 80% participants

consider Ryanair is more suitable for short hauls and business travel whereas 10%

remained unsure while 10% replied in negative.

Q 4.2.3 In which class do travelers usually sit on long-haul routes?

10%15%

75%

Preference of class to travel in long haul

First ClassBusiness ClassEconomy Class

The survey disclosed that for long route majority of respondents prefer economy class.

As evident from the findings, 75% have chosen economy class, 15% opted for business

class whereas 10% elected first class as their preference for long-haul routes.

Q 4.2.4 Are you a long-haul typical traveler?

40%

60%

I belong to traveling haul

Long haulShort haul

The survey revealed that the ratio is 40-60. Findings showed that there are 40% long-

haul travelers and 60% short-haul travelers.

Q 4.2.5 How many long-haul trips per year being a typical traveler you make?

4%

52%32%

12%

Travel during a year

Not sure 1-3 times4-6 times> 6

Large number of respondents said that they travel 1-3 times a year, which is 52% of the

sample size. From sample size, 32% remained unsure as they feel that it depends on

their business activities. Furthermore, 12% stated that 4-6 times they make whereas

only 4% make more than six trips per year.

Q 4.2.6 Do you think that Ryanair has a bright future prospect in long-haul?

25%

65%

10%

Ryanair bright future prospect in long haul

Not sure YesNo

From the responses, researcher has gathered from the respondents, it is clear that

majority of the sample size (65%) view that in long haul flights Ryanair, has bright

future. They can prosper in the business. Interesting 25% were not sure about this

aspect whereas 10% responded in negative.

Q 4.2.7 Rate following as your travel value?

The above table summarizes the responses received from the sample size to rate the

following options as per their travel value and interestingly, the highest number of

respondents (95%) opted for safety and reliability. Second thing that participants take in

consideration is ticket price as 84% rate it as very important. Seat comfort is third in the

category with 47%, followed by direct route (42%). In the 'not important' criterion,

Business class availability tops the table with 42%, followed by frequent flyer

programme. Furthermore, any respondent does not consider aircraft type as very

important criterion and access to lounge is not very important factor that is considered

by people in travel value.

Q 4.2.8 Rate the factors that you take in account when you are buying an airline

ticket.

Reliability and Safety is the biggest factor that majority of respondents take in account

when they opt to buy tickets (55%). It is also evident that time schedule and price of the

ticket 15% each. Moreover, 8% opted for airport location, 6% selected quality and

services whereas only 1% considered the option of traveling with national flag airline.

Q 4.2.9 What is your overall perception of low cost airlines?

60%

25%

10% 5%

Overall perception regarding low cost airlines

Good value for moneyAn average airlinePoor AirlineExcellent ServicesNot Sure

55%

15%

15%

8%6%

1%

Considerating factor while buying tickets

Reliability and SafetyTime SchedulePriceAirport LocationQuality of Services National Flag Airline

The results showed that 60% of the sample perceived low cost airlines as 'good value

for money', 25% considers it as an average airline whereas 10% view it as poor airlines.

We noticed that 5% were not sure while not a single respondent perceive low cost

airline as an excellent airlines.

Q 4.2.10 Would you consider traveling with low cost airline (Ryanair) on long-haul

routes?

38%

30%

30%

2%

If Ryanair started long haul services I would travel with them

LikelyNot sureUnlikelyNo comments

This question was asked in order to explore the taste, likeness and preference of

travelers for Ryanair in long-haul routes. Interestingly, results revealed that 38% opted

for 'likely' option, which means that they would like to try it. Moreover, results showed

that 30% of respondents opted for 'unlikely', which reflects that there are high chances

that people would not like to experiment traveling with Ryanair (low cost) airline on long

routes. We also noticed that 30% respondents were unsure about traveling with

Ryanair. This also indicates that there are likely chances that people would not travel

with Ryanair until it changes its total image and pattern. Only 2% decided to not answer

it.

Q 4.2.11 If traveling by Ryanair on long haul routes, which class would you prefer

in future.

5% 19%

76%

If Ryanair starts long haul flights I would prefer

First ClassBusiness ClassEconomy Class

It is evident that 76% of respondents prefer to travel by economy class in long-haul

routes by Ryaniair. Moreover, 19% stated that they would prefer business class

whereas only 5% opted for first class. This indicates that for long-haul flights, Ryanair

has a scope as they offer economy class traveling.

4.3 Summary of Interviews:

From the interviews with the management, it is learnt that the company has a strong

presence in the European market for short haul. Interestingly it is evident from

interviews and the fact that though it is low cost airline but it has never been involved in

any crashes. The company maintains a strong reputation for providing cost-effective

services by not only ensuring that the prices are low but also flies passenger to their

destination in quicker and timely manner. The time taken by BA for same route is 1 hour

whereas it takes only 30 minutes for Ryanair to reach same destination. This reflects

the ability of the airline to provide timely services. Furthermore, management indicated

that it is focusing on its operations at present and may expand its operations to long

haul but currently there are no such intentions.

The travel agents said that they feel Ryanair has opportunity and they should expand

their business by investing in high jets and long-haul routes. However, crew member

said that it will increase the cost for the company as they would have to spend more in

maintenance and crew also which is very unlikely for time being. When it was said to

the management and others that present study survey reveals that 76% people would

love to travel with Ryanair in the economy class, the response was from management

that it is nice but corporate decisions are made on the environmental analysis. It was

evident that even if there is bring opportunity but at present this airline is not willing to

think on investing in the long haul routes.

CHAPTER FIVE: ANALYSIS AND DISCUSSIONS

5.1 Introduction:

This chapter analyzes and discusses the finding of the present investigation in the light

of available literature. The findings are compared with the previous empirical researches

in order to gain the insight of research variables.

5.2 Discussing present findings with previous researches:

From the findings, it is evident that though on the basis of competitive advantage low

cost airlines have performed exceptionally well in the short haul but all those attributes

cannot be transferred to long-haul operations. Some of the attributes are discussed

here:

Low cost airlines do have the potential to perform well in long haul but it is very unlikely

that they can achieve some competitiveness in long haul because in short run there are

limited seat, no need for food by passengers, and number of toilets are limited but in

long haul these all are basic need. The idea to attain competitiveness and upper edge in

the aviation market for low cost airlines is only possible in the short routes. The present

findings are consistent with the findings of Alamdari and Fagan (2005) in this regard.

The reason Ryaniair is not willing to expand in the long haul is that operating margin will

be elevated. This too is similar to the past research of Alamdari and Fagan (2005).

Our findings showed that people prefer flights based on price and fare that is similar to

the work of O' Connell and William (2005). In this study, economy class is preference for

majority of respondents and past researches indicated that consumer prefers to travel

with economy class. Furthermore, the reason of Ryanair's high profit is due to its low

cost models. The findings in this regard are consistent with the study of Fallet (2012).

However, in present study we found that passenger consider their safety and reliability

as an important factor to travel with airline. The findings are unlike the work of Gillen

and Ashish (2004) that discard safety as passenger's prime preference. The focus of

their study mainly remained on looks and excellence in quality whereas in present study

it is not the case because safety and reliability is prime importance for the customers.

After safety, comes price and fares, as people in shorter haul do not look out for quality

features.

Interestingly we found that with low cost airlines, people perceived the airline with value

for money and thus they opt for that specific airline. In the literature, we found that

Guillen and Morison (2003) argued that Ryanair is a low cost airline that does offer

additional services on extra charge basis. People who are interested in additional

services opt for it whereas as those who does not require let it go. Similar results are

found by this investigation.

CHAPTER SIX: CONCLUSION

6.1 Introduction:

This chapter concludes the findings of the present study to ensure that research

objectives are accomplished. Conclusion is followed by limitations of present study and

future recommendations.

6.2 Conclusion:

Through primary investigation, we have accomplished our research objectives. The

prime objective of this study was to critically investigate models and theories of the low

cost airlines in relation to the case study when shorter haul airline wants to expand into

long haul flights. Through survey, we found that though there is a potential to expand

but it is very unlikely that low cost airline consider the option as there is a major chance

of losing competitiveness factor in longer hauls. The main reason that people prefer to

travel with low cost airline is that it is cost effective to them but if low cost airline invest

into long haul flights, it has to increase its expenditures. Furthermore, there is a likely

possibility that it will lose its core competencies such as 'competitiveness, low price, etc

if it goes for long haul operations.

Moreover, our objective to investigate the perception and expectation of the passenger,

we learnt that respondents feel that Ryanair can expand but they would ideally only

travel if economy classes are available. Furthermore, there is perception about Ryanair

but in long haul, still there is not high majority that feel Ryanair can succeed. In addition

to that, we found that people have a perception that low cost airlines are good value for

money but they do not consider low cost airline as an excellent deal flights. Thus, there

is very slight possibility that if low cost airline even enter into long haul, it will not be able

to compete with existing long-haul giants.

We also recommend that Ryanair should work on its existing marketing and operations

strategies in order to maintain its strong presence in the aviation industry. Most of its

ticketing is online which makes it easily accessible to internet world but those who are

lacking this facility are not attracted. Thus, it needs to ensure that small stalls should be

available in central areas. Furthermore, there should be a package offers to attract

tourist on holidays. Ryanair should install 4 pistons engine which will make its flights

consume less fuel and the operations will become more effective and efficient.

6.3 Research Limitations:

This research has certain limitations therefore the findings are only limited to the

present case study. Researcher had limited time to commence research therefore this

investigation could not be carried out on broader platform. Apart from time constrain,

there is sampling technique that is 'convenience sampling'. Researcher opted for this

technique so that there is more generalizability but stratified sampling would have been

more accurate to investigate it. Researcher could have used longitudinal research

design based on the observation but there was limited time, which made researcher to

opt for cross-sectional study. Furthermore, in-depth interviews with the expert would

have brought high accuracy to findings as cross-examining would have been done but

shortage of time restricted for only interviews with management.

6.4 Future implications:

The future researcher should consider comparative study by including two low cost case

studies and compare it with long-haul giants in macro domain. This will give in-depth

analysis. Furthermore, future researchers should consider observation technique to

explore the research variables. In addition to that, sampling size should be expanded

and probability-sampling technique should be used. Interviews with the experts should

be included in the future investigations. Moreover, future researchers should also

include longitudinal research design so that there is concrete analysis in different

timeframe.

BIBLIOGRAPHY:

Aldamari, F., Fagan, S. (2005), Impact of the Adherence to the original low-cost

model on the profitability of the low-cost airline, in: Transport Reviews, Vol 25,

pp. 377-392.

Barret, S. (2004), How do the demands for airport services differ between full-

service carriers and low-cost carriers?, in: Journal of Air Transport Management,

Vol 10, pp. 33-39.

Barros, A., Somasundaraswaran, A. and Wirasinghe, S. (2007), Evaluation of

level of services for transfer passenger at airports, in: Journal of Air Transport

Management, Vol 13, pp. 293-298.

BBC (2010). Ryanair Swings back into Profit. Available at:

http://www.bbc.co.uk/news/10201057. Last accessed: 20-08-2014.

Brueckner, J. and Pels, E. (2005), European airline mergers, alliance

consolidation, and consumer welfare, in: Journal of Air Transportation

Management, Vol 11, pp. 27-41.

Brace, I., 2008 Questionnaire Design: How to Plan, Structure and Write Survey

Material for Effective Market Research, 2nd Edition, London, Kogan Page.

Business Week (2011). Low-cost carriers are taking the pain. Available at:

www.businessweek.com. Last accessed: 20-08-2014.

Burghouwt, G. and De Wit, J. (2005), Temporal configuration of European airline

networks, in: Journal of Air Transport Management, Vol 11, pp. 185-198.

Calder S., 2003 No Frills: The truth Behind The Low-Cost Revolution In The

Skies, 2nd Edition, London, Routledge Virgin Books Ltd.

Civil Aviation Authority, 2006. No frills carriers: Revolution or evolution?

Constant, K. (2013). Ryanair Low-cost Strategy Model. Available at:

http://www.slideshare.net/kevinconstant96/ppt-ryanair2. Last accessed: 20-08-

2014.

DailyMail.Co.Uk, (2008). Ryanair boss reveals plan launch low cost long haul

venture years. Available at: www.dailymail.co.uk. Last accessed: 20-08-2014.

Dennis, N. (2007), End of the free lunch? The responses of traditional European

airlines to the low-cost carrier threat, in: Journal of Air Transport Management,

Vol 13, pp. 311 321.

Dobruszkes, F. (2006), And analysis of European low-cost airlines and their

networks, in: Journal of Air Transport Geography, Vol 14, pp. 249-264.

Doganis, R. (2002), Flying off course. The economics of international airlines,

Printed by Routledge, London England and New York United States.

Doganis, R., 2006 The Airline Business, 2nd Edition, London, Routledge.

Doganis, R., 2002 Flying Off Course, 3rd Edition, London, Routledge.

Forsyth, P. (2007), The impacts of emerging aviation trends on airport

infrastructure, in: Journal of Air Transport Management Vol 13, pp. 45-52.

Franke, M. (2007), Innovation: The winning formula to regain profitability in

aviation?, in: Journal of Air Transport Management, Vol 13, pp. 23-30.

Graham, F., Humphreys, I. and Ison, S. (2004), Airports’ perspectives on the

growth of low-cost airlines and the remodelling of the airport–airline relationship,

in: Tourism Management Vol 25, pp. 507-514.

Graham, F., Fidato, A. and Humphreys, I. (2003), Airport–airline interaction: the

impact of low-cost carriers on two European airports, in: Journal of Air Transport

Management, Vol 9, pp. 206-273.

Guillen, D. and Ashish, L. (2004), Competitive advantage of low-cost carriers:

some implications for airports, in: Journal of Air Transport Management, Vol 10,

pp. 41-50

Guillen, G. and Morrison, W. (2003), Bundling integration and the delivered price

of air travel: are low cost carriers full service competitors?, in: Journal of Air

Transport Management Vol 9, pp. 15-23.

Hind, P. (2007), Developing the long haul low-cost model, in: www.airneth.com

Holloway, S., 2005 Straight and Level: Practical Airline Economics, 2nd Edition,

Hampshire, Ashgate.

Humphreys, I., Graham F., Dennis, N., Ison, S. (2007), The transferability of the

lowcost model to long-haul airline operations, in: Tourism management, Vol 28,

pp. 391- 398.

Hunter, L. (2006), Low-Cost Airlines: Business model and Employment

Relations, in: European Management Journal Vol 24, pp. 315-321.

IHS Global Insight, 2009 European Low-Cost Airlines See Growth Potential as

Major Carriers Cut Capacity.

Kotler, P., Armstrong, G., 2003 Principles of Marketing, 10th Edition, Prentice

Hall Nutek.

Morell, S. Morell, P. (2005), Airlines within airlines: An analyst of US network

airline responses to Low Cost carriers, in: Journal of Air Transportation

Management, Vol 11, pp. 303-312.

Neufville, R. and Odoni, A., (2003) Airport Systems Planning, Design and

Management, Printed by McGraw Hill, New York.

Papatheodorou, A. and Lei, Z. (2006), Leisure travel in Europe and airline

business models: A study of regional airports in Great Britain, in: Journal of Air

Transport Management, Vol 12, pp. 47-52.

Radnoti, G. (2001), Profit Strategies for Air Transportation, Aviation Week Books,

Printed by McGraw Hill, United States.

Reynolds-Feighan, A. (2001), Traffic distribution in low-cost and full-service

carrier networks in the US air transportation market, in: Journal of Air

Transportation Management, Vol 7, pp. 265-275.

Roseingrave, L. (2010). Ryanair to end Dublin flights to Cork & Kerry. Available

at: http://www.highbeam.com/doc/1P2-29452720.html. Last accessed: 20-08-

2014.

RDI (2008). Ryanair - The Low Fare Airline. Available at:

http://www.aviationreg.ie/_fileupload/Image/6_Response_to_CN5_2008_RYANAI

R.pdf. Last accessed: 20-08-2014.

Ryanair, (2012). About Us- Ryanair History: Available at:

https://www.ryanair.com/en/about. Last accessed: 6th Jan 2014.

Ryanair, (2010). The World's Favorite Airlines- Annual Report: Available at:

http://www.ryanair.com/doc/investor/2010/Annual_report_2010_web.pdf. Last

accessed: 20-08-2014.

Ryanair, (2011). The World's Favorite Airlines- Annual Report: Available at:

http://www.ryanair.com/doc/investor/2011/Annual_Report_2011_Final.pdf. Last

accessed: 20-08-2014.

Saunders, M., Lewis, P., Thornhill, A., 2009 Research Methods for Business

Students, 5th Edition, Essex, Pearson Education Limited.

Shaw, S., 2004 Airline Marketing and Management, 5th Edition, Hampshire,

Ashgate.

Tretheway, M. (2004), Distortions of airline revenues: why the network airline

business model is broken, in: Journal of Air Transportation Management, Vol 10,

pp. 3-14.

Wensveen, J. (2007), Opportunities for the long-haul low-cost model, in:

www.airneth.com. Last accessed: 20-08-2014.

Williams, G. (2002), Airline Competition: Deregulations Mixed Legacy, Printed by

Ashgate, England, United Kingdom.

APPENDIX

INTERVIEW QUESTIONS:

Q1: How long have you been associated with Ryanair?

Q2: What are core competencies of Ryanair?

Q3: How do you see Ryanair's presence in the EU market, considering it as low cost

airline?

Q4: What is the image of Ryanair in the eyes of consumers?

Q5: Give any example of its effective operations management?

Q6: If you think there is chance for growth, what would you suggest for Ryanair?

Q7: If in one word you have to define "Ryanair's operations, what it would be?

Q8: Do you think Ryanair has the potential to invest in long-haul destinations?

Q9: What makes Ryanair 'order qualifier' and 'order winner'?

Q10: How to see Ryanair's performance in next 5 years.

Q11: Why Ryanair is not investing in long-haul, despite good performance?

Q12: In future can we expect any such step for long-haul expansion?

APPENDIX

SURVEY QUESTIONNAIRE

PART A: DEMOGRAPHIC DESCRIPTION:

Gender

Male

Female

Age:

18-24

25-31

32-38

39-45

46 or above

Income

Below 10,000 per

year

10,001-15,000

15,001-20,000

20,001-25,000

Above 25,000

PART B:

Question 1: Do you think Ryanair is low cost airlines?

Yes

Not Sure

No

Question 2: Do you think Ryanair is suitable for only business travel and short hauls?

Yes

Not SureNo

Question 3: In which class do travelers usually sit on long-haul routes?

First Class

Business Class

Economy Class

Question 4: Are you a long-haul typical traveler?

Long haul

Short haul

Question 5: How many long-haul trips per year being a typical traveler you make?

Not sure

1-3 times

4-6 times

> 6

Question 6: Do you think that Ryanair has a bright future prospect in long-haul?

Not sure

Yes

No

Question 7: Rate following as your travel value?

Factors Scale of Importance

Not important Neutral Important Very important I don’t know

Ticket priceDirect routeTimetableAirport

Access to loungesAircraft typeEfficiency and ease of flight boardingBusiness class availabilitySeat reservation optionSeat comfortonboard aircraftMeals and beverages served onboardIn-flight entertainmentSelection of newspapers and magazinesSafety and reliabilityFrequent flyer programmePast experience with airlineProximity to business activity

Question 8: Rate the factors that you take in account when you are buying an airline

ticket.

Reliability and SafetyTime SchedulePriceAirport LocationQuality of Services National Flag Airline

Question 9: What is your overall perception of low cost airlines?

Good value for moneyAn average airlinePoor AirlineExcellent ServicesNot Sure

Question 10: Would you consider traveling with low cost airline (Ryanair) on long-haul

routes?

LikelyNot sureUnlikelyNo comments

Question 11: If traveling by Ryanair on long haul routes, which class would you prefer in

future.

First ClassBusiness ClassEconomy Class