Ryanair Ltd.

Company information

• Date founded: 1985
• Industry: Travel
• Corporate Headquarters: Dublin, Ireland
• Type: Public

Ryanair Ltd is a budget airline serving Europe. Its headquarters are in Dublin and its largest operational base is the London Stansted Airport. Ryanair is one of the largest European airlines and had the title of the largest European airline in 2022 by the number of passengers carried. It is also known as one of the busiest airlines in Europe by sheer number of passengers. Ryanair mostly uses Boeing 737 aircraft. It has rapidly expanded and serves over thirty-six counties in Africa, the Middle East, and Europe. In 2017, Ryanair became the first European airline to have carried over one billion people.

History

Ryanair was first established in 1985. It was originally founded as Danran Enterprises by Tony Ryan, Christopher Ryan, and Liam Lonergan. Operations began with a fifteen-seat Bandeirante plane and had a route from Waterford, Ireland, to London Gatwick Airport. In 1986, a second route—from Dublin, Ireland, to Luton Airport near London—was added in order to compete with airlines Aer Lingus and British Airways. Ryanair’s business expanded drastically with the addition of the second route; the airline went from 5,000 passengers in 1985 to 82,000 passengers in 1986.

Also in 1986, Ryanair took over the failing London European Airways at 85 percent and later provided a connecting flight to Amsterdam, Netherlands, and Brussels, Belgium. In 1987, the airline also expanded its flight network to more locations in the United Kingdom and Ireland. The Gulf War had a significant impact on air traffic, and Ryanair had to reduce its number of employees and saw a decrease in passengers. Despite these struggles, 1991 was the first year the airline saw a profit. Michael O’Leary was hired as chief executive officer (CEO) and decided that a streamlined model of low fares, no business class, and a single type of plane was the most cost-effective strategy. O’Leary modeled his business strategy on that of Southwest Airlines and rescheduled flights into the regional markets, which did not carry the cost of flying into international airports. In 1995, Ryanair reported that it had carried 2.26 million passengers.

Ryanair experienced successful flotation on the Dublin stock exchange and was able to launch routes to Stockholm, Sweden, and Oslo, Norway, from London, as well as routes to Paris, France, and Brussels, Belgium, from Dublin. After the success of these launches, the company was able to order new Boeing 737-800 planes.

In the early 2000s, Ryanair launched its website. The website allowed online booking and reduced prices because flights could be purchased directly by passengers and did not have to go through a travel agent. Within only a year, the website was taking care of over three-quarters of the company’s overall bookings. In 2001, Ryanair started a new base of operation at the Brussels Charleroi Airport, and 155 more Boeing 737-800s were ordered to be delivered over a period of eight years. Ryanair also acquired one of its competitors, Buzz, from KLM and took over its travel routes. Passenger traffic continued to grow, and in September 2006, Ryanair recorded that it had carried 42.5 million passengers. Also in 2006, however, Ryanair was criticized for poor training policies and aircraft hygiene by a documentary made for Britain’s Channel 4. Aer Lingus rejected Ryanair’s bid for a takeover in October 2006 for €1.48 billion; Ryanair then tried again in 2008, making a bid of €748 million, but Aer Lingus once again refused.

In the spring of 2010, the eruption of the Eyjafjallajokull volcano in Iceland created controversy for the company, as they initially refused to reimburse or care for passengers that had been stranded, despite EU regulations mandating that they do so. Italy’s civil aviation authority fined Ryanair for its refusal to comply with these regulations. That year, the company reported a loss of €10.3 million due to canceled flights and strikes.

In 2014, Ryanair moved its office to Airside Business Park in Swords, County Dublin, and agreed to purchase an additional 200 Boeing 737 MAX 8s. Two years later, Ryanair launched a corporate jet charter service, which let corporate groups hire individual jets. In 2017, Ryanair partnered with the Spanish airline Air Europa in order to offer long-haul flights to North, Central, and South America. The partnership was disbanded, however, in 2019, with Ryanair losing access to Air Europa's long-haul flight capabilities. The same year, Ryanair dispelled rumors that the company would be expanding with flights to the United States, despite the purchase of 135 extended-range Boeing jets. The company instead stated that they were working to extend its operations further into Africa, the Middle East, and Eastern Europe.

Like most airlines, Ryanair was greatly impacted by the COVID-19 epidemic that began in 2020. The airline was forced to cease operation for several months and cut thousands of jobs. Ryanair CEO Michael O’Leary was critical of Ireland’s COVID-19 protocols as well. Still, by 2022, Ryanair was once again in full operation, and it remained Europe’s biggest airline by number of passengers carrying 160 million passengers in 2022.

Impact

Ryanair has proven itself to be a successful, low-cost airline, but that does not mean the company has not run into its share of controversy. In the company’s early years, employees were discouraged from unionizing because they had shares in the company, and it was mentioned that they would have a significant say in how Ryanair was operated. As the company gained success, however, employees were no longer given shares, and a union was still never established. Critics accused the company of being antiunion, an allegation that the company denied for many years, saying that there was nothing stopping employees from unionizing (despite evidence to the contrary). Eventually, the Ryanair Pilot Group (RPG) was established in 2012 to represent pilots, though it did not find much success and was openly derided by Michael O’Leary. Contracts were considered difficult; they included expensive training and often required employees to open bank accounts in Gibraltar in order to receive paychecks. In 2014, Ryanair was ordered to pay €8.3 million in penalties for violating French labor laws by giving their French employees Irish contracts to save money on taxes and other expenses. Ryanair was also accused of not complying with Danish work regulations at its base in Copenhagen. The company pulled out of Denmark instead of adapting to Danish laws.

Ryanair has also been under fire for its optional extra charges. Because the fares are so low, Ryanair often charges additional fees for services that include paying with a credit card, using airport check-in facilities, and checking luggage. Passengers have been required to print out their boarding passes at home, or they will be charged a substantial fee for a reprinted boarding pass.

Ryanair’s customer service has also been criticized, though, since 2014, it has tried to rebrand itself as a more family-friendly airline. The company has also been criticized for false advertising and fuel incidents.

In 2016, the airline actively campaigned against the Brexit referendum (in which the United Kingdom voted on whether or not to leave the European Union) through pro-Europe advertisements and slogans on their planes. The company was under investigation for running an advertisement that offered discount flights to customers that would vote to remain. That same year, Ryanair took an uncharacteristic move toward upmarketing by starting a corporate jet service, with planes available for rent by the hour that will offer fine dining and reclining leather seats.

Ryanair finally agreed to recognize pilot unions for the first time in late 2017, a move widely seen as a response to a growing backlash against the company's labor practices. Analysts expected the move to have a significant impact on the airline, forcing it to behave more like older, traditional airlines and perhaps to lose some of its ultra-low-cost advantages. Despite the agreement, talks between the company and unions quickly fell apart, and Ryanair faced its first-ever strike by pilots in Germany later in December 2017. Several flights were delayed, and union leadership declared the operation a success in that it showed it was possible to pressure Ryanair's management in the fight for better working conditions. Controversy continued to follow Ryanair into the 2020s. In 2022, the airline faced backlash when it required passengers from South Africa to the United Kingdom to take a language test to prove the authenticity of their passports.

Bibliography

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“Europe's Top 20 Airline Groups by Passengers 2022: Ryanair Extends its Lead.” CAPA - Centre for Aviation, 23 March 2023, centreforaviation.com/analysis/reports/europes-top-20-airline-groups-by-passengers-2022-ryanair-extends-its-lead-642197. Accessed 4 May 2023.

"History of Ryanair." Ryanair. Ryanair, 2015. Web. 30 Aug. 2016.

O’Sullivan, Michelle, and Patrick Gunnigle. "Non-Union Employee Representation, Union Avoidance, and the Managerial Agenda." Economic and Industrial Democracy 33(2012): 163–83. Print.

Riegel, Ralph. "Ryanair Rules Out US Flights Despite Buying 135 New Long-Range Jets." Independent [Ireland], 17 Sept. 2018, www.independent.ie/business/irish/ryanair-rules-out-us-flights-despite-buying-135-new-longrange-jets-37322484.html. Accessed 10 Apr. 2019.

“Ryanair Imposes Afrikaans Language Test on South African Passengers.” NPR, 7 June 2022, www.npr.org/2022/06/07/1103441895/ryanair-requires-afrikaans-language-test-on-south-african-passengers. Accessed 4 May 2023.

Topham, Gwyn. "Ryanair Faces €8.3M Penalty for Breaching French Labour Laws." Guardian. Guardian News and Media, 28 Oct. 2014. Web. 30 Aug. 2016.

Tsang, Amie. "Ryanair, Europe's Cut-Price Behemoth, Agrees to Recognize Pilot Unions for the First Time." The New York Times, 15 Dec. 2017, www.nytimes.com/2017/12/15/business/ryanair-pilot-unions.html. Accessed 3 Jan. 2018.

Tsang, Amie. "Ryanair Hit With Its First Pilot Strike, in Germany." The New York Times, 22 Dec. 2017, www.nytimes.com/2017/12/22/business/ryanair-pilot-strike.html. Accessed 3 Jan. 2018.

Vannahme, Adrian. "Ryanair Ends Partnership with Air Europa." Airline Geeks, 24 Feb. 2019, airlinegeeks.com/2019/02/24/ryanair-ends-partnership-with-air-europa/. Accessed 10 Apr. 2019.