RyanAir and Its Dominance in the European Low-Cost Airline Market - Literature review Example

RyanAir and Its Dominance in the European Low-Cost Airline Market 1: Introduction In considering the appropriate marketing strategy for RyanAir to continue to maintain its dominance in the European airline market, it is necessary in the literature review to review discourse on RyanAir strategy and how it has positioned itself within the market. It is submitted that a review of the way in which RyanAir has managed to position itself within the market is fundamental to formulating strategy recommendations for the airline going forward in order to maintain market position. Furthermore, in supporting the recommendations in this paper regarding the marketing model to adopt for long term sustainability of market position, it is necessary to review the literature regarding the wider backdrop of the contemporary tourism business model within which RyanAir operates. With regard to RyanAir’s ability to develop and sustain its position as leader in the European airline industry, the literature demonstrates that a central element of RyanAir’s success has been its ability to address a gap in consumer demand that wasn’t being supplied by pre-existing airlines operating in Europe. To this end, the literature indicates a factor in Ryanair’s success being the ability to continue to innovate in line with Schumpeter’s “creative destruction model” through being the first to enter a high demand niche market with low supply (Page, 2009. Indeed, leading economist Joseph Schumpeter incorporated the term “creative destruction” as a central element of the contemporary capitalist business model; arguing that innovation was the key to business success (Schumpeter, 1942). Schumpeter further argues that internal innovation within a business operational framework produces lower costs, which in turn permits companies to sell products at lower prices, which is referred to as dynamic efficiency (Utterback, J. 1996). This in turn highlights a key element of Schumpeter’s model that competition for innovation as opposed to competition for customers is the most important (Utterback, J. 1996). This is particularly evident in relation to the European airline industry particularly as a result of EU initiated deregulation, which intended to remove competition barrier thereby opening the market for exploitation by others. Moreover, the proliferation of different business models, work patterns has meant that the success of the working organisation is inherently dependent on greater participation and employee empowerment, through the concept of the “learning organisation” (Porter, 1996). Furthermore, Hamal and Prahalad argue that a central element of this is the shift in how companies compete with each other, with the underlying basis of competition moving towards “soft” factors such as reputation, service and market placement and positioning. This in turn reflects the evolution of the “knowledge-based economy” (Hamal and Prahalad, 1996). From the airline industry perspective, the fall in profits in the current economic downturn and global pressures has clearly created a need to manage costs and flexibility, which in turn creates the need to change the dynamic of the work organisation in order for Ryanair to sustain its position (Fageda et al, 2010). 2. Analysis of Issues Facing the European Airline Industry At the outset, the underlying issue facing the European airline industry is that the external pressures of falling profits and increased competition in the global marketplace has created an internal pressure regarding staffing needs and working arrangements (Page, 2009). As such, the obvious course of action for management has been to address internal employee relations and personnel management as evidenced by Ryanair. Furthermore, Ryanair’s market position appears to link in with the notion of the “high performance work organisation” due to the industry it operates in and market position (Page, 2009). Pfeffer argues that fundamental changes in business environment such as those facing the airline industry are the central catalyst for changes in the work organisation (Pfeffer, 1995). In particular, Pfeffer refers to market maturity in the markets, accompanied by increasing competition and fragmentation of customer demand and the market liberalisation, which in turn has reduced product market barriers as evidenced by the intense global competition faced particularly by British Airways (BA) in the face of Ryanair’s business growth fuelled by lower operational costs (Page, 2009). To this end, the globalisation of competition has highlighted the need of BA to find novel methods of maintaining brand position and internal management of costs, which in turn has been a significant aspect of Ryanair’s success in developing its position as market leader in the European Airline industry. Furthermore, if we compare Ryanair’s strategy to continue dominance in the European airlines industry supports the proposition in many studies, which indicate that “high performance work organisation is most likely to be used by large companies” (Reinert, H., & Reinert, E.S., 2006). Accordingly, as part of business strategy, Ryannair arguably need to preserve competitive intensity exposure (Porter, 1995). This is further supported if we consider the positioning of the airlines in context of the tourism industry as a whole and their relationship with travel agencies in the digital arena. Moreover, the concept of tourism and tourist has fundamentally changed in the previous twenty years and moved away from the 19th Century singular leisure model to a multi-layered model encompassing numerous activities falling within the aegis of tourism (De Botton, 2003). The fundamental trigger for this has been the globalisation phenomenon and it is evident that the interrelationship between globalisation and its concomitant impact on the socio-cultural framework in turn impacts modes of travel and thereby the tourism industry (Rojeck & Urry, 1997). For example, Urry argued that the manner in which the travel and tourism operates is increasingly segmented and represents diverse consumer demands in terms of travel in terms of demand and cost. Urry posited that the manner in which the tourism industry now operates is directly correlated to the impacted of globalisation and has created the tourist gaze phenomenon” (Urry, 1990). This not only changes patterns of tourism via bespoke and cultural and urban tourism, it correlates to other social changes via globalisation and lifestyle changes; which must be taken into account by Ryanair as part of its services going forward (Urry, 1990; Fageda et al, 2010). Indeed, in 2001, Urry revisited his “tourist gaze” proposition to reinforce how the digital revolution had cemented the convergence towards increased globalisation (Urry, 2001). Furthermore, Urry commented that the innovation in technology meant that the world was increasingly mobile, which continued to reshape behavioural trends in tourism (2001). A fundamental element of the tourist gaze proposition is the point that the increased connectivity of culture and the exposure to different socio-cultural norms through the globalisation model has opened up individual desire for diverse cultural experiences, which in turn correlates to Armstrong et al’s arguments regarding the importance of societal marketing strategy in contemporary strategy management (Armstrong et al, 2009). As a result, the conventional leisure tourism model is arguably fragmented into various travel modes depending on individual preference. This is further supported by Wahab and Cooper, who refer to the trends in globalisation to tourism with discussions of whom the tourist is; their demands and the industry response, particularly in a multi channel climate and sustainable development (Wahab & Cooper, 2001). As such, Wahab & Cooper argue that the globalisation has fuelled increased competition between tourist destinations worldwide (Wahab & Cooper, 2001). Furthermore, Urry refers to the fact that technology and culture relationship has also impacted contemporary culture and resulted in the “time space compression” where people are closer together. Additionally, there is increased fluidity in contemporary culture. As a result, the culture of travel is not only through physical travel but also through virtual travel facilitated by technology and cultural consumption, which again supports the need for Ryanair to incorporate societal marketing strategy in line with the arguments of Armstrong et al (2009). Whilst not replacing tourism, it clearly raises some interesting points regarding culture (Urry, 2001). For example, Urry comments that as a result of globalisation in terms of tourism and travel habits: “This reflexivity is not simply a matter of individuals and their life possibilities but sets of systematic, regularised and evaluative procedures that enable each place to monitor, modify and maximise their location within the turbulent global order. Such procedures invent produce, market and circulate, especially through global TV and the internet, new or different or repackaged or niche-dependent places and their corresponding visual images. And the circulating of such images performs further the very idea of the globe”(Urry, 2001). This in turn correlates to Croucher’s discussion on globalisation, which refers to the fact that globalisation encompasses the political and cultural and social economic aspects of regional and local territories, which integrate and have become interconnected via the contemporary global methods of information exchange (Croucher, 2004). Indeed, Croucher posits that globalisation is fuelled by the interrelationship between various central trigger factors including economic, technological, socio-cultural, political and biological factors (Croucher, 2004: 10). However, Urry highlights the point that within the globalisation paradigm, the increased homogenisation of culture does not place everyone at an equal position within the global order and this is highlighted by the impact of global tourism and changes in cultural norms and the impact on host country, which in turn reinforces the capitalism model within which cultural tourism operates (Urry, 2001). Therefore as a result, the tourist gaze umbrella embodies wider facets of travel on grounds of socio-political order and its interrelationship between travel and the “liquid modernity” (Urry, 2001). As a result, the tourist gaze phenomenon within the liquid modernity model has enabled people to seek out destinations themselves leading to unusual tourist destinations based on different motivations other than pure leisure and relaxation (Urry, 2001). As such, this highlights the increasing control of the consumer in dictating marketing trends, which in turn points to a need for Ryanair to implement customer relationship management as part of its marketing objectives to retain market position (Page, 2009). This is further supported if we consider the positioning of the airlines in context of the tourism industry as a whole and their relationship with travel agencies in the digital arena. For example, the evolution of the traditional business model from deregulation of the travel business in 1978 to online business evolved an integrated group of players in the tourism industry; namely, airlines, online reservations, search engines, systems, travel agents companies. As such, the success of each player was interdependent (Lubbock, M. and Krosch, L., 2000). However, the growth of the web has enabled sellers such as airlines to have direct access to the consumer online, effectively shifting the balance of the role of the travel agent as intermediary having primary contact with the consumer as indicated in figure 1 (Swarbrook, J. and Horner, S. 2007). For example, if we consider the market environment within which Ryanair operates, it is evident that the previous decade has seen a marked transformation in the tourism industry and despite the current economic downturn; overall the tourism industry is expected to continue growing over the next 20 years (Aramberri & Buttler, 2005). The continuing changes in consumer behaviour and composition of the tourist population requires the package holiday to continually adapt its business models and strategies in order to maintain sustainability and growth in the long term (Cooper, 2008). It is submitted that a key element of this is effective strategy management, which is imperative to the continued success of package holiday companies in the tourism industry as it continues to grow and diversify in accordance with consumer behavioural trends (Page, 2009). For example, Page comments that in the future: “New markets will emerge due to changing economic conditions, modified consumer behaviour and new technologies…. There will be greater emphasis on individual/self-determined holidays, and on education and active recreational pursuits” (2009, p3). 3: Market Environment Analysis & Ryanair It is submitted that a market environment analysis of the tourism industry is imperative to understanding the tourism industry and the consideration of growth and development goals going forward in the delivery of an effective multifaceted marketing model for long term sustainability of Ryanair’s market position. For example, globalisation has undermined the traditional travel agency distribution model, and Hamal and Prahalad argue that a central element of this is the shift in how companies compete with each other, with the underlying basis of competition moving towards “soft” factors such as reputation, service and market placement and positioning (1996). This in turn reflects the evolution of the “knowledge-based economy” (Hamal and Prahalad, 1996). A prime example is the merger of MyTravel and Thomas Cook. Therefore from a business model perspective, this enables Ryanair to exploit the consumer power to diversify services offered within the wider tourism business model. For example, the literature demonstrates that globalisation via proliferation of the Internet and e-commerce business model has played a vital role in reshaping marketing and distribution channels in the travel business, thereby reformulating the nature of supply and demand within the travel industry (Poon, A 1993). Within the conventional business model prior to the e-commerce boom, the role of the travel agency has been well defined as a key intermediary in acting on behalf of both buyers and sellers (Renshaw Bottomley, N. 1997). Moreover, whilst traditional figures demonstrate that business travel accounted for the higher share of the market, private travel is expected to continue to flourish (Swarbrook, J. and Horner, S. 2007). However, notwithstanding the growth of the private traveller market, consumer habits have continued to evolve outside the traditional marketing strategies of the high street travel agency. Indeed, a central underlying basis for the MyTravel and Thomas Cook merger was the declining popularity of the package holiday (Taylor, I. 2007) where it was asserted that competitor Thomson would be “counterbalancing the drop in pre-packaged sales by actively pushing its new strategy of uber-dynamic packaging” (Taylor, I. 2007). This is clearly a prime example of the practical impact of globalisation on the global marketplace. Moreover, the requirement for innovation in packaging holidays in the fragmented market further highlights the importance of effective strategy management. Furthermore, the Office of National Statistics indicated that package holidays accounted for 42.3per cent of overseas travel by UK residents in 2005, which is a marked difference from the 54 percent ten years ago (www.statistics.gov.uk). This in itself suggests that whilst Internet growth is undoubtedly an important contributing factor to the decline of the high street travel agent, the influence of evolving consumer habits as a result of globalisation cannot be ignored (Swarbrook, J. and Horner, S. 2007). In fact, it is imperative that agencies acknowledge the interdependence of these factors if the new e-commerce model is to be exploited with maximum commercial success to address declining profits in the industry. As such, the changing nature of travel habits and market shares has also impacted the previous monopoly of the travel agency as prime intermediary (Buhalis& Costa, 2005). This is further evidenced if we consider the traditional business distribution model between service provider and consumer in figure 1 below: Figure 1 The evolution of the traditional business model from deregulation of the travel business in 1978 to online business evolved an integrated group of players in the tourism industry; namely, airlines, online reservations, search engines, systems, travel agents companies. As such, the success of each player was interdependent (Lubbock, M. and Krosch, L., 2000). However, the growth of the web has enabled sellers such as Ryanair to have direct access to the consumer online, effectively shifting the balance of the role of the travel agent as intermediary having primary contact with the consumer as indicated in figure 1 (Swarbrook, J. and Horner, S. 2007). Conversely, prior to the e-commerce boom, travel agents were the key players in the distribution channel with access to the GDS and in which they can check availability of the inventory entries (Poon 1993). However, the online business model has fuelled a competitive market, taking high street travel agencies outside their monopolistic comfort zone (Buhalis & Costa 2005). Additionally, outside of the obvious reduction to high street trade, the shifting business models and emergence of a competitive market has resulted in pressure for travel agents to change their revenue models from charging commissions on service providers to charging customers for service (Buhalis & Costa, 2005). Indeed, prior to the e-commerce boom it was asserted that “Electronic Business will affect virtually every type of marketing expenditure. It will also affect every aspect of marketing itself from the creation of material to its distribution” (Cunningham & Froschl 1999 179); which in turn highlights the need for Ryanair to continue exploiting the multi channel distribution model to sustain market position in the European airline industry. Moreover, the private traveller market share is significantly increasing and the demands of the private traveller have shifted. Individuals prefer tailored holidays and consumer demands have developed outside the parameters of the narrow format of the package holidays (Page, 2009). Therefore the development and rapid growth of online agencies such as Ebooker, lastminute.com, Expedia, Orbitz and Travelocity have left the high street firms in their wake in offering flexibility denied by the high street travel agent ((Swarbrook & Horner, 2007). Moreover, the availability of alternative outlets for travel purchase online has rendered the monopoly of travel agents redundant, forcing travel agencies to alter their pre-existing business and marketing strategies. Moreover, it is submitted that the concept of organisational change is inherently intertwined with external threats and opportunities, which businesses must adapt to as part of strategic planning to continue long term growth. Senior and Fleming argue that the concept of organisational change has many faces, namely “convergent changes and transformational change that is organisation wide and characterised by radical shifts in strategy, mission values and associated changes of structures and systems” (In Thompson & Martin, 2005, p.41). This further highlights the point that organisational change is shaped by the interrelationship of complex background factors such as market conditions, consumer habits and nature of the industry (Thompson & Martin, 2005, p.41). Moreover, it is submitted that the globalisation phenomenon is a significant factor in shaping an organisation’s approach to change as part of business strategy in the contemporary business environment. If we consider this contextually with regard to Ryanair, Page comments that Ryanair’s market share and ability to adapt to the continuous changes in the market environment has enabled it to survive and exploit opportunities arising from the new markets and demands within the package holiday industry (Page, 2009). Additionally, from the UK perspective, a study by YouGov in online travel trends demonstrates that online bookers often come though family or friend referrals or online reviews then travel agents when seeking advice regarding travel (www.yougov.com). “However, the need for travel agents should not be underestimated as 46 per cent of online holidaying respondents still visit travel agents to collect destination brochures, which will impact online travel decisions” (www.yougov.com). To this end, airlines are expanding services available, thereby negating the importance of the intermediary travel agent. The Ryanair website has a “manage my booking” facility allowing passengers to make travel plans, email itineraries, thereby bypassing the role of the travel agent whether online or high street. As such, the travel agency monopoly has been quashed ((Swarbrook, J. and Horner, S. 2007). For example, it has been argued that “the expedia philosophy is about putting the customer in the control seat” (Taylor, I 2007). Moreover, Ryanair need to change their approach and exploit the manner in which online and offline consumer habits interweave and capitalise on this to drive offline consumer traffic to their online sites instead of competitor sites. As such, the e-commerce boom can potentially be utilised as tool to drive growth both online and offline. Moreover as highlighted above, it is submitted that directly correlated to globalisation and the proliferation of the internet business model is the effects of customer relationship management systems. Laing et al’s study gives the example of parallel channels in the tourist industry, for example one consumer type will call a travel agent for deals, search on the internet and then order online or through a travel agent (Laing et al, 2002). Alternatively, the Laing et al refer to a second consumer type which demonstrates a different holiday planning process undertaken by another consumer, who enjoys going to the travel agent and using other channels such as catalogues. Laing et al further argue that the central to this is the efficacy of information delivery across the various channels (Laing et al. 2003). To this end, it is submitted that effective CRM is vital to retail strategy in gaining new customers through online and offline marketing communication activities, promotion and direct email incentives (Trapp, 2007). It is further submitted that this backdrop correlates to Wheelan & Hunger’s (2008) discussion of the role of the strategic management model versus the strategic decision making process. Essentially the strategic management model focuses on strategic intent and long term goals in contrast to the strategic decision making model, which is rooted in implementation of decisions. These central differences in the two models as extrapolated by Wheelan and Hunger are further supported the commentary of Prahalad and Doz (1987) that “intent is used to describe long term goals and aims, rather than detailed plans” (in Rugman, 2009, p.518). Moreover Lynch (2003) highlights how “the mission of an organisation outlines the broad directions that it should and will follow and briefly summarises the reasoning and values that lie behind it (In Ackerman & Brown, 2005 p.189). Moreover, as highlighted above, it is submitted that directly correlated to the proliferation of the internet business model is the effects of customer relationship management systems (CRM). It has distinctly altered the way that companies view strategy, with a distinct shift from product focused strategy to customer relationship management, which is: “underpinned by information systems convergence and the development of supporting software, which in turn promises to significantly improve the implementation of Relationship Marketing principles” (Ryals & Knox, 2001). CRM essentially stems from relationship marketing and early works of Berry (1983) and Reichheld (1996), which indicated that a 5% growth in customer retention rates culminated in a mean customer lifetime value figure ranging between 35% to 95%, with knock on effects on profit margins (Ryals & Knox, 2001). There are many definitions of CRM but in broad terms, CRM is defined as an all embracing approach which integrates sales, customer service, marketing, field support and other functions that touch customers (Christopher et al, 1991). Moreover, Galbreath posits that effective with effective CRM activities “an enterprise performs to identify, select, acquire, develop, and retain increasingly loyal and profitable customers”(Galbreath, 1998 at p.14). A prime example is Ryannair, which was one of the first big companies to position itself as offering low cost flights to Europe with online booking facilities and advance booking discounts. CRM therefore embodies the simultaneous operation of distribution channel members, including online and offline customers and “is a combination of business process and technology that seeks to understand a company’s customers from the perspective of who they are, what they do, and what they’re like” (Couldwell, 1998). In terms of practical applicability of CRM to retail strategy, it is submitted that retail businesses (particularly in the multi-channel marketplace) are more successful if they focus on obtaining and retaining shares in the customer marketplace rather than a share of the actual product base, particularly in light of the numerous outlets (Page, 2009). To this end, it is submitted that effective CRM is vital to retail strategy in gaining new customers through online and offline marketing communication activities, promotion and direct email incentives (Trapp, 2007). If we further consider this in terms of effective customer relationship management “at the core, CRM is an integration of technologies and business processes used to satisfy the needs of a customer during any given interaction. More specifically, CRM involves acquisition, analysis and use of knowledge about customers in order to sell more goods or services and to do it more efficiently (Bose, 2002). Moreover, the “customer” includes a wide definition including vendors, channel partners, or virtually any group requiring information. This is further evidenced by reference to Ryanair’s proliferation as an airline. For example, Mayer highlights how Ryanair Holdings plc “operates the first of all founded low cost scheduled passenger airlines in Europe. Starting in 1985 Ryanair followed the example of Southwest Airlines, introduced the low cost concept in Europe” (Mayer, 2008). As such, Ryannair has become a market leader in the low cost airline market by continuing to maintain low operating costs. Additionally, in its 2007 Business Report, Ryanair asserted its objective to establish itself as “Europe’s leading low fares scheduled passenger airline through continued improvements and expanded offerings of its low fare service”(Ryanair, 2007, Strategy pp.1-4). In terms of the analysis of the internal environment, Mayer highlights how: “Ryanair, with its 35 Mio passengers in 2006, is the market leader in the intra-European airline market – close packed with Easyjet and followed by Air Berlin” (Mayer, 2008) . Mayer further argues that the central reason for this is the fact that Ryanair operates within a tight and compact organisational structure and with a clear strategy. To this end, an underlying of the airline is the big financial reserves it has retained, which is estimated on 2 billion Euros (International Herald Tribune, 2006). As such, it is commented that these savings and the airline’s profitability enable it to survive in a crisis or complete in price flights: “This economical advantage result from its learning curve in aggressively optimising production costs” (Mayer, 2008). Indeed, Ryanair has retained its low costs because of outsourcing services to specialised operators and enable aggressive competitive behaviour towards suppliers such as ground handling and airports. In terms of the customer environment, the main target customer base is private purpose travellers within Europe. As such, this market is inherently price sensitive with a lower income bracket along with other preferences (Mayer, 2008). In implementing a targeted CRM strategy, it is arguable that the Ryanair success story is testament to the proposition that “flying has developed to be a daily commodity like going by bus” (Mayer, 2008). On the other side of the spectrum, it is posited that individuals are happy to save business travel costs by using Ryanair for short haul flights, thereby highlighting the need to address the continuous changes in consumer behaviour, particularly in the current economic climate. Indeed, Mayer comments that “an increasing part of the customers purchase their flight tickets either on the airline’s website on their own rather than they authorise the travel agency to book for them” (Mayer, 2008). If we consider the external business environment factors, it is evident that “people become more price-conscious in their consumption, which increases competition in the market, whereof Ryanair as a cost effective operator profits from. Furthermore, Ryanair uses the internet as new technological advancement to reduce its distribution costs” (Mayer, 2008). This is particularly evidenced by the online booking system and cutting out of the travel agent intermediary. Moreover, the heavy online presence enables Ryanair to keep its operational costs low. Moreover, whilst Mayer makes the point that EU liberalisation of the airline industry has provided a fertile environment for commercial exploitation; the particular success of Ryanair is its low operating cost, understanding of CRM and ability to sustain low cost flights over competitors. As an example, Figure 1 provides a detailed SWOT analysis of Ryanair’s business strategy operations. Figure 1 Strengths Brand name Strong Revenue Growth Business Strategy High seat density Fast turn around Small headquarters Benefits from low airport charges Low distribution costs (90% bookings via Internet) Weaknesses Fuel costs Some secondary airports too far away Decline in operating margin Weakening employee relations Poor service Poor press Opportunities Growing demand for low cost airlines Expected market adjustment Launch of new routes Fleet expansion Opportunities by EU enlargement Low cost flights on long haul as a new market Threats Fluctuating oil prices Dependence on economic cycle Fierce competition, market consolidation Threats to security EU regulations on denied boarding compensation Involvement of airlines in EU emission trading system Source Datamonitor 2007: pp21-25. It is submitted that essentially Ryanair has been able to maintain consistency in production cost efficiency, which in turn has sustained leading market position. Conversely, the central weakness appears to be the location of some of the secondary airports, which are arguably balanced out by the low landing fees and low cost of the flight, which inherently avoids competition with its rivals (Mayer, 2008). Moreover, Ryanair’s objectives further highlight the various profit opportunities from the market: “however, the airline is always threatened by the rise in fuel prices and the general dependence of the airline industry on the economic cycle, but keeping its good cost structure and pursuing an elaborate fuel risk management could limit the threats in competition” (Mayer, 2008, 5). The central marketing goals of Ryanair are to attack the big network carriers such as British airways and become the largest airline in Europe (Ryanair, 2007). As such customer profiling and effective CRM is essential (Swarbrook & Horner, 2007). To this end, Ryannair positions itself amongst the price conscious punter and Mayer comments how the “awareness of different passenger types requires marketing campaigns that cover all categories of potential customers” (Mayer, 2008:6). Additionally, price flexibility has proved vital and will continue to do so in the difficulties of the current markets. Moreover, in terms of the product, the “idea of Ryanair is to keep the product as simple as possible. Its passengers travel ticketless in one class without any seat reservation. It does not offer free in flight service with drinks or meals….. Ryanair represents the pure low cost airline concept with no frills at all and narrow seating onboard – simply passenger transportation from A to B as point to point air service on short-haul routes (Mayer, 2008). Indeed, arguably of most importance to Ryanair’s competitive position in the European airline industry is the fact that it appears to have mastered the underlying issue of price the key element of its branding and brand value. Indeed, the “price is more important to the customer than the product itself” (Mayer, 2008). Within this key aspect of the brand, Ryanair exploits the commercial value of the brand by offering differential pricing schemes off peak and advance booking savings. Additionally, in terms of market placing, in 2006 it is estimated that approximately 98% of tickets were sold online over the Internet booking system (Van Broekhoven, 2006)., Additionally, in terms of the marketing mix, Ryanair has “recognised that an innovative communication mix is a key factor for cause for generating demand it is essential to create an awareness of its service (Shaw, 2004). To this end, the bulk of Ryannair’s marketing budget is applied in a sales pull strategy to raise awareness of their price through advertising, public relations and direct marketing (Flouris et al, 2006). Moreover, in terms of its internal employment training programme, it offers a continuing professional development program, where employees see their learning as a lifelong process of training and development (Cummings et al, 2003). This in turn helps remove traditional boundaries between job categories through autonomous working (Karash, 1991). Interestingly, this shift in the working organisation model ties in with the “learning organisation”. The learning organisation is an evolving notion which has become increasingly incorporated into the modern company and multinational philosophy. In its simplest form, Richard Karash propounds the ideology underlying the learning organisation: “A learning organisation is one which people at all levels, individuals and collectively are continually increasing their capacity to produce results they really care about” (Karash, R. 1995). The ideological underlying principle behind the learning organisation is that it produces a flexible workforce with a shared vision, which in turn ensures internal stability within an organisation. Mike Wills defines the learning organisation as a “group of people who work together” (Wills, M. 1998). He further defines it as a: “Company, corporation, firm, enterprise or institution, or part thereof, whether incorporated or not, public or private, that has its own functions and administration. For organisations with more than one operating unit, a single operating unity may be defined as an organisation” (1998). Pedler, Burgoyne and Boydell define the learning organisation as “an organisation that facilitates the learning of all its members and continuously transforms itself to achieve superior competitive performance” (1991). The concept traces its origins to the early writings on management trends in the 1930s and Schumpeter’s creative destruction theory (Pedler, Burgoyne & Boydell, 1991). This was further developed by neo-human writers such as Chris Argyris with his proposition of the “double-loop learning”, which reacted to the studies of corporate excellence undertaken by Peters and Waterman, identifying organisational behavioural trends (Argyris, C 1999). Within the contemporary business framework, personnel management theory highlights the importance of efficient employee relations and collective employee morale in achieving specific goals (Argyris, C 1999). As such, Pedler argues that the learning organisation theory is central to this (Pedler, M & Aspinwall, K., 1998). It is arguably this internal cohesion combined with the marketing strategy, which has contributed to Ryanair’s consistent positioning in the airline industry. Indeed, Mayer suggests that: “Ryanair is aware of the importance and necessity of implementing and executing the developed marketing plan in a proper way. The most effective approach is to implement the new marketing strategy is to allow our target market, which indeed is a broad mass, to get to know about the competitive advantage.” ((Mayer, 2008:9). However, whilst implementing a corporate management change, Schneider and Bowen posit that it was “not an expression of mutual trust and reciprocal emotional obligations between company employees and its management. Rather, it was an alternative control mechanism and should be understood as such” (Schneider & Bowen, 1995). Indeed, after privatisation in 1987, Marshall expressed the desire to become the “world’s favourite airline” and Hamel and Prahalad refer to this as “a strategic intent”, which facilitated the rapid increase in British Airways’ customer rating (1996). To this end, Pascale comments that BA’s service ranks among the best and that it is “one of the most profitable airlines in the world” and that “Marshall began leading British Airways down that road by going to those who dealt closely with customers and asking them what needed to happen” (Pascale, 2000). However, the exploitation of the market by industry players such as Ryanair has made inroads into the market, particularly heightened by Ryanair’s intention to enter the long haul flight market. To this end addressing customer needs is fundamental to modern business growth (Pascale, 2000). 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