After September 11th most Airlines lay off thousands of employees, cancelled connections and grounded planes. However the small Irish airline Ryanair is hiring pilots, service personnel and has just ordered 100 Boeing 737. How is this possible?

Another example: Ryanair provides its customers fares at 15 € on the flight Frankfurt - Hahn to London (Stansted). This is far below the Lufthansa price which is about 250 € on the flight Frankfurt to London (Heathrow). As you see you can save a lot of money if you go by Ryainair, but with Lufthansa you are paying a lot more for… what? What makes the differences? The answer is that Ryanair is using a competitive advantage which is most likely to be seen in the price, but it is also pervading the whole concept. Two examples is that Ryanair only uses electronic ticketing which reduces provisions and sales-staff costs and when Ryanair has a limited amount of destinations Lufthansa is representative in every European Airport, pays provisions to travel agencies and offer an expensive Miles & More program. Even if these examples alone save a lot of expenses, Ryanair have continued to find new ways to make things cheaper.

Only a seat

When you buy a seat on a flight by Ryanair, you will have only a seat and nothing more. If you would do the same with a bigger airline you would be able to choose business class, tax free shopping and various service facilities on board. Only the catering is an enormous cost which Ryanair doesn’t offer. Accordingly Ryanair uses regional airports thus reducing expenses by a total of 59% because regional airports have lower fees for standing and boarding than the bigger ones. Most established airlines however fly to the most central and most famous airports. And this, ladies and gentlemen, costs! The combination of the factors listed above creates a competitive advantage for Ryanair versus Lufthansa and other bigger carriers. Most of them write red numbers while Ryanair has increased its operating profit by 39%. But as always, it’s up to you. Are you willing to ignore the fact that you won’t be served breakfast or be able to buy a nice bottle of cognac? Or do you prefer to ignore all service for a cheaper ticket price? The competition goes on and in the meantime more low priced airlines is going to establish.