Ryanair (RA) was founded in 1985 as a small Irish-based competitor to Aer Lingus, the Irish national airline. In the beginning RA took on the same business models as that of their competitors but that particular strategy took RA absolutely nowhere. Then in 1990s, under the watchful eye of Michael O'Leary, RA transformed its prospects after it decided to recreate itself by imitating the Southwest Airlines (SWA) model in the British Isles, and then later extending it to Europe.
Competitive advantage based on a privileged market position usually tends to be in the favor of the first-mover by giving advantages in market-specific investments, skills and infrastructure aircraft, location-routes, landing rights, etc. in the case of the airlines, which follower companies will find more expensive to replicate. For example, as other airlines now rush to follow RA into the same competitive space within the European airline industry, the CEO of RA gives them little hope for success.
As Michael O'Leary sees it, there are huge barriers to entry now, and none of these new airlines is going to find a price point below RA.
PEST ANALYSIS AND FIVE FORCES FRAMEWORK
RA is seen as the biggest and most prosperous of Europe's low budget fare airlines targets in the first instance leisure travelers and the visiting friends and relatives segment of the market. Claiming itself as "lowest cost scheduled airline" means basing the airline's financial strategy on the average number of seats sold per flight, instead of on the revenue made per sold seat. Therefore every environmental issue which either affects basic costs of flights or affects the likeability of customers to book a flight is important for RA.
In the recent year there have been many events which affected the flaws in flight security...