A Logical Step Towards the Ryanair Companys Growth - Case Study Example

Method of Enquiry Introduction to the problem Many low fare airline companies have came into existence with a purpose of providing the service of basic flying. One of the low cost fare airline companies is Ryanair which is an Irish airline company offering a low fare for travelling from destinations within Ireland, Continental Europe, Morocco, and United Kingdom (Roman, 2008). The company recorded its first improved business performance after five years of continuous efforts (Wichita State University. 2009). Recently the company has abolished its check in desks service and initiated charging £5 on every passenger as mandatory online check in fee. The decision has been taken as an initiative to compete with its rival organizations involved in providing low cost airline service. According to the company’s personnel this decision is considered as “a logical step” towards the company’s growth (Anonymous, 2009). All of the companies in aviation industry have adopted strategic approaches to sustain in the highly competitive business environment (Milmo, 2009). A market research could be conducted in order to know their customers’ reaction on the decision of abolishing check in desks and charging extra £5 online as the check in fee by the company. The passengers availing airline services are mainly classified into categories of economy class and business class on the basis of the services offered and the fares charges by the companies. But with increasing competition level companies instead of grouping them into classes are engaged in identifying customers’ need and specifically fulfilling those needs (Teichert, 2007). Review of literature There are many research works done in order to have knowledge of customers’ needs and their level of satisfaction from the services of airline companies. Research indicates that prior to the low cost airline companies entered the market aviation industry was considered as luxurious services but as the low cost airline companies entered into the market the airline services became reachable also for common people. Another major contribution has been made by the globalization process which has resulted into more passengers availing airline facility. The low coast airline mostly affected the big airlines companies resulting into huge losses which led to formation of mergers and acquisitions as a measure of survival in the aviation industry. Airline companies also introduced many schemes and offers to attract more passengers (FRBSF Economic Letter, 2002). Offers and schemes introduced by airline companies are intended to attract customers of various groups each having their own sets of expectations and requirements from the companies. The offers and schemes are designed on the basis of customers’ nature and some other factors such as the socio-culture environment, demographic and economic factors of the location. Identification of such factors supports the companies in developing their schemes and offers to attract more number of passengers (Teichert, 2007). A report presented by the American Customer Satisfaction Index indicated that most of the customers of US rated very low on the scale of satisfaction level from the services in comparison to the amount paid by them. So it indicated the airline companies that their level of customer satisfaction is declining in US (ACSI, 2009). Customers have grievances in context of online services offered by Aviation companies through their websites. Customers mainly complained of complicated access to the websites of the companies with very less amount of information available. They also reported about the slow functioning of the company’s website for online ticket booking. Though after experiencing the service of budgeted airlines customers were satisfied initially but later on they realized confusion in differentiating them from high fare airline companies. The reason behind such confusion was related to the hidden costs which the budgeted airline companies charged to their customers and low level of transparency in their fare charge which bring the overall amount almost equal to that of any high fare airline companies (Zoglin, 2009). Certain questions are also raised on the flexibility of their service with a better customer service facility (Asiaone, 2009). The company was also questioned for misleading advertisement for its promotion among people (Anonymous, n.d.). According the new fare policy of the company every passenger will be required to pay extra £5 as online check in fee which will increase the total fare paid by the customers and in case if anyone fails to pay the online fee will be required to pay £40 on the spot from where the passenger will board the flight. The company has also placed conditions on the number of baggage carried by the passengers and extra amount will be charged if the number of baggage exceeds the number mentioned by the company (Millward, 2009). Restricting the number of baggage has also impacted the retail companies having their business on the airport terminal since due to restricted number of baggage passengers refrain from buying products as they would increase their luggage amount (Moodie, 2009). Though it seems to be useful in increasing the company’s revenue but could have a negative impact on the business of the company (Massey, 2009). Research design The prime object of the research work is to identify the customer groups and their expectations from the company’s service and also the impact of the company’s decision on its business performance. From the requirements’ point of view of the research work a survey interview technique will be required to identify the customer groups and their types of expectations. Further the collected responses will be critically analyzed to obtain the observations. The outcome of the survey will be useful in generating the information required by the company on customers’ types, their requirements, and their responses on the company’s decision of charging extra £5 as check in fee every time one avails the company’s airline service. The interviews will be based on the questionnaire developed considering the various aspects of customers’ needs and expectations from a budgeted airline company. The questionnaire will target mainly the customers who avail the services of low cost airline services. The questions will address most of the points which will support the research work in generating the findings as per the requirement of the airline company. The nature of the questions present in the questionnaire is of objective types which help in getting more specific and precise response of the customers. The questions included in the questionnaire have been framed considering the issue which has been addressed under the research work. As the responses will be received they will be analyzed critically Practical and ethical issues Proper measure will be taken to remove the biasness from the research work so that more specific and accurate conclusion can be drawn from the observations. Proper support from company is expected under which it will provide name and contact details of its potential customers without violating the security policy of the company. Agreements will be required to be signed by the company and the research team on maintaining the confidentiality of the customers’ information and its protection from illegal practices and unauthorized data tampering. Proper safety measures are also required to be taken by the company and the research team members from leakage of the research information to other airline companies which could use them for their benefit or could negatively affect the business of Ryanair. Plan and timetable of activities The entire work could be divided into number of steps which are to be completed in order of their existence in the plan. Following are the various tasks which are required to be completed and the time allotted for each step as per the schedule of the research work – Analysis of various aspects which influences customers’ satisfaction level from company’s perspective – one (1) week Developing questionnaire to address the customer group and their problems due to increase in the fare charge of the company – two (2) weeks Collecting responses from the customers based on the questionnaire with the help of survey interview – two (2) weeks Analyzing the responses collected from the interview process to find the observations – one (1) week Generating the findings and result of the research work and its documentation after error proofing and minor corrections – one (1) week References Roman, M. 2008. Ryanair Holdings. Business Missouri. [Online]. Available at: http://business.missouri.edu/IFMProgram/Files/Reports/Summer%202008/Ryanair%20(7-15-08).doc [Accessed on November 26, 2009]. Wichita State University. April 06, 2009. [Online]. Available at: http://www.wichita.edu/thisis/wsunews/news/?nid=620 [Accessed on November 26, 2009]. Teichert. T. October 18, 2007. Abstract. Customer segmentation revisited: The case of the airline industry. Science Direct. FRBSF Economic Letter. January 18, 2002. Competition and Regulation in the Airline Industry. [Online]. Available at: http://www.u.arizona.edu/~gowrisan/pdf_papers/airline_competition.pdf [Accessed on November 26, 2009]. The American Satisfaction Index (ACSI). 2009. Scores By Industry. [Online]. Available at: http://www.theacsi.org/index.php?option=com_content&task=view&id=147&Itemid=155&i=Airlines [Accessed on November 26, 2009]. Zoglin, R. September 3, 2009. The Airlines Customer-Complaint Lines: No Answer. Time. [Online]. Available at: http://www.time.com/time/business/article/0,8599,1920121,00.html [Accessed on November 26, 2009]. Asiaone. 2009. Budget-airline customers need to do homework. Singapore Press Holdings Ltd. [Online]. Available at: http://www.asiaone.com/Travel/News/Story/A1Story20090520-142629.html [Accessed on November 26, 2009]. Massey, R. October 01, 2009. Ryanair scraps check-in desks forcing passengers to pay £5 to check in online. [Online]. Available at: http://www.dailymail.co.uk/news/article-1217234/Ryanair-scraps-airport-check-desks-favour-web-check-service.html Accessed on November 26, 2009]. Millward, D. September 04, 2009. Ryanair increases luggage charges by 50 per cent. [Online]. Available at: http://www.telegraph.co.uk/travel/travelnews/6139621/Ryanair-increases-luggage-charges-by-50-per-cent.html [Accessed on November 26, 2009]. Moodie, M. September 02, 2009. Media pressure builds on Ryanair as low-cost carrier snaps back at duty free criticism. [Online]. Available at: http://www.moodiereport.com/document.php?c_id=1178&doc_id=19773 [Accessed on November 26, 2009]. Milmo, D. September 30, 2009. Ryanair scraps airport check-in desks. [Online] Available at: http://www.guardian.co.uk/business/2009/sep/30/ryanair-scraps-airport-check-in [Accessed on November 26, 2009] Anonymous. February 21, 2009. Ryanair to abolish check-in desks. [Online] Available at: http://sain.sunsite.utk.edu/cgi-bin/textonly/0124/news.bbc.co.uk/2/hi/business/7903656.stm [Accessed on November 26, 2009] Anonymous. n.d. Criticism of Ryanair. [Online] Available at: http://wikibin.org/articles/criticism-of-ryanair-3.html [Accessed on November 26, 2009] Appendix As a part of the research work interviews of the customers are required to be done to assess their level of satisfaction and response on the company’s decision to charge extra amount for availing their airline service. The interviews will be based on the developed questionnaire for the assessment of customers’ behavior towards the service of the company. Questions included under the questionnaire are closed ended which are easy to answer by the respondents within the time frame of the interview. 1. What is the average number of journeys made using the airline service by you a. 2-3 times/month b. 4-5 times/month c. More than 5 times/month d. Depends on the requirement 2. Does low cost airline services benefits you in context of saving your travelling costs annually a. Yes b. No c. Not always d. Depends upon the frequency of trips 3. Does the economic airline services provides the value of your money through their service and performance standards a. Yes b. No c. Partially d. Varies with the brands 4. Do you think there is a variation between the pricing of low cost airline and general airline services a. Yes b. No c. Very minor difference d. Sometimes increases more than the cost of general airline services 5. Do you think the additional services offered by the low cost airline companies are necessary rather than offering the basic flying facility a. Yes b. No c. It is required to meet the value for the money d. Cannot say 6. What is your opinion on charging extra money for additional amount of luggage a. Should be removed b. Should be implemented for huge amount of luggage but substantial luggage should not considered. c. Should be modified to make customer comfortable d. Should be modified as per the requirement of security and safety needs. 7. Are you comfortable with the additional charge for extra luggage a. No b. Yes c. Partially comfortable d. This is an unfair mean of earning extra cash from the customers 8. Are you satisfied with the level of transparency maintained by low cost airlines in context of hidden costs a. No b. Yes c. Partially d. Yes but more clarity is needed 9. Are you satisfied with the online booking service of the low cost airline companies a. Yes b. No c. Partially d. Never used such facility 10. Do you believe that the websites of such companies requires to be more efficient and reliable a. Yes b. To some extent c. Always d. Cannot say If the interviewee permits the researcher to have extra discussion on the issue certain open ended questions have also been prepared which are required to be answered verbally. 1. What are the basic requirements for any low cost airline company to satisfy its customer? 2. What are the extra facilities which are expected from such companies’ along with the basic service of flying? 3. What information is required to be produced from the companies to its customers to avoid the issue of hidden costs? Read More