The last, but by no mean the least, keynote in the EurOMA2011 was the one that keep me in the conference closing ceremony.
I must confess that I wasn’t jotting down his speech that much thanks to his outstanding charisma.
However, what I could take away from his keynote were two things, how to turn your business around and how to turn the attention of the audience especially in such a large scale.
The former was so obvious. As we have learnt that Ryan is a Low Cost Airline (LCA) or No-Frills Airline but they are not the pioneer. They was first launched as a Full-service airline in Ireland and almost gone down due to a fierce competition in the aviation industry that offer them the £20M in red. However, they took the LCA business model from the South West Airlines and successfully adapted in Europe. Then Ryan Air got a profit of £125,000 for the first time.
Though it looks too simple, the way they had transformed from to an LCA, it was to do with the decision making & decision maker literally. Here are what Ryan is all about.
- Cost reduction in every possible area by changing habits of all staffs. This will affect all decision makings e.g., airport selection, process design and routing strategy.
- Operations champions: reduce turnaround time, maximise the use of the cabin/ seats.
- Price competitive esp. with their main rival, EasyJet. Revenue pricing is one of the key.
Apart from the tough LCA sector offered by EasyJet, there are several external threats in the aviation industries that RyanAir is facing which are;
- Fuel price
- Tax esp. Air Passenger Duty (APD aka. green tax)
- Terrorism
In the very last part of his keynote, he strongly critique the APD introduced in the Brown’s administration as the major threat of the aviation industry. He further compared to the similar tax employed in the other countries and other sectors that he claimed that have more CO2 emission.
What can Thai LCA can learn from RyanAir probably is the implementation of the business model. LCA is not just a brand, operations strategy of the LCA firms need to be strictly implemented and never loose the focus on cost reduction. As Kell Ryan mentioned in the beginning of his keynote.
” If you want to fly, Come to RyanAir. If you want to dine, just go to the others”
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Pairach Piboonrungroj, PhD 