Ryanair: success before love

Abstract

Purpose

This paper aims to show why public acclaim is not always a guarantee for healthy profits. A low-cost forerunner, Laker Airlines, also discovered this same fact to its fatal cost. A company needs to understand its true value proposition and ensure that customers are willing to pay for it. Ryanair was adored by the public when it began its low-cost flights from Dublin to London in 1986. That love nearly drove it to bankruptcy. Today, despite its poor image, it is one of the most successful and profitable companies in the industry.

Design/methodology/approach

The article analysis of the changing fortunes of Ryanair from its launch to its near bankruptcy in 1991 and then its revival of fortunes. It draws a parallel with Laker Airlines and the low-cost transatlantic Skytrain. Adulated by the public, the company folded in 1982. It is supplemented with research the airline industry and low-cost business models.

Findings

The article shows why companies should not fall into the trap of believing that a good public image will be the necessary condition for maintaining a sustainable competitive advantage. They need to fully understand the value proposition and what a customer is willing to buy.

Citation

Thomas, M. (2015), "Ryanair: success before love", Strategic Direction, Vol. 31 No. 8, pp. 1-3. https://doi.org/10.1108/SD-02-2015-0034