PaOrganisational Behaviour Project Ryanair
Cillian O' Riordan C16433024 Josh Raymond C16376006 Raymond Rogers C16354673 Aoibhe O'Reilly C16410404
Section 1- Introduction
In thirty-two years Ryanair, has grown from a small regional airline with twenty-five employees to Europe's largest airline. Set up by the Ryan family in 1985 Ryanair provided a single service operating from Waterford to London Gatwick serving a modest 5000 passengers per annum. Ryanair's philosophy was simple, as an airline they wanted to target the larger airlines that dominated the Irish and U.K market. Ryanair believed that their low-cost fares flying from Dublin to London from £99 return would gain market share.
By the late 1980's Ryanair had increased its number of routes across Europe and now had a staff of 477 managing to transport an impressive 644,000 passengers per year. However, some poor business ventures such as a business class service and frequent flyer club had proved unsuccessful meaning that the company was still loss making.
Following three years of expansion and intensive price competition with competitors Ryanair had racked up 20 million in losses. Ryanair needed to act, so looked at South East Airlines as a business model for inspiration. Having seen the success of this low-cost airline Ryanair began a major restructuring of its business. Previous offerings such as free on board drinks and meals were no longer part of your on-board experience instead customers would be obliged to pay for them as extras. These cost savings enabled the company to provide even lower fares than previously.
In 1991 the Gulf war hampered Ryanair's operations, forcing the company to withdraw routes and make redundancies. However, the company made its first profit of £293000.
1995 marked an important year for the airline as they overtook both British Airlines and Aerlingus as the largest airline operating the Dublin to London route. Ryanair was beginning to win market acceptance with passenger numbers exceeding the 2 million mark.
The late nineties saw the company adding numerous routes to its operations across France, Italy, Norway and Sweden. Ryanair also became a public company with its share price increasing from £11.00 to £25.50 on its first day on the stock exchange. During this period the airline won many accolades including the title of “Airline of the Year” and the world's “Best Managed Airline”. Lower seat costs, fares and better reliability statistics saw the airline
crowned as which's' “Best Value Airline”. To celebrate their triumph Ryanair announced flights for £19.99 on their successful Dublin to London route.
The turn of the century marked the launch of Ryanir.com, which linked car hire, travel insurance and rail services together facilitating 50,000 bookings a week leading the company to become the most popular airline on the internet. By 2004 90% of all bookings were made online. Further periods of rapid growth and increased profits led the airline to acquire KLM's loss making Buzz airline. On its 20th birthday Ryanair was transporting nearly 35 million passengers and celebrated the occasion by offering fares of 99p.
In 2007 traffic growth of 20% empowered the airline to create a further 1400 jobs. At this time Ryanair's streamlined approach to business was clear as there were 10,000 passengers for every employee.
The last ten years has seen the company grow year on year with its 106.4 million customers (2015) and relatively small number of staff. The company's investment in the “Always Getting Better” program has seen the development of a new website, interiors and uniforms and this is clearly paying dividend as profits of 1.24 billion were earned in 2015.
Ryanair-Current company profile:
Ryanair is a low-cost Irish airline headquartered in Swords in Dublin. The company's current CEO is Michael O'Leary and its deputy CEO is Michael Hickey. According to the website, Ryanair is said to be not only Europe's favourite low-cost airline, but also its number one choice airline. Daily, it averages around 1,800 flights from 86 different bases, which connects over 200 various destinations in exactly 33 different countries with a fleet of over 360 Boeing 737 aircraft, with another 305 aircrafts on order. Ryanair has a team of around 11,500 highly skilled aviation workers.
In the year of 2016, Ryanair's total operating revenue was 6,536 million, with its profit after taxation being 1,242 million. Ryanair's largest operating base is at London-Stansted in the UK with 43 planes, followed by its base at Dublin airport. Normally, Ryanair prefers to fly to smaller airports outside major cities as it receives lower landing fees and further, a quicker turn-around time to reduce costs. For example, instead of flying to Dusseldorf, Ryanair will fly to Weeze airport, 70 km from the city.
Ryanair has often been criticised for it no-frills aircraft, even in modern times, but more so its so-called appalling customer service. For example, the company has often come under heavy criticism for its maltreatment of disabled passengers. In 2002, the company refused to provide wheelchairs at Stansted airport for disabled passengers, which greatly angered disabled rights groups. However, in 2014, Ryanair stated it was introducing a new campaign to make itself a more family friendly airline, as CEO Michael O'Leary recognised that the company was consistently failing to meet the standards of modern customer service. Ryanair then launched a 24-hour Live Chat on their website so they could improve the quality of customer service provided by the company. Ryanair, being a member of ELFAA (European Low Fares Airline Association), has several competitors throughout Europe, such as airlines like MyTravelLite, Go, EasyJet, and Wizz air. The company's largest competitor, EasyJet, focuses on primary airports, targeting business class passengers, which is good news for Ryanair. However, Ryanair is known for its tenacity in fighting off other low cost airlines with cheaper flights and better deals for any company who attempts to compete with them as they have been accused by other companies that Ryanair significantly undercut them by reducing flight costs to the point they cannot compete in that market anymore, especially on its home turf in Ireland.
Human Resource Management:
According to fisher et al ‘Human resource management (HRM) involves all management decisions and practices that directly affect or influence the people, or human resources, who work for the organisation.' It is widely agreed that the operation of effective Human Resource Management in an organisation will result in greater job satisfaction and organisational performance.
Ryanair, ‘Europe's favourite airline' is seen as taking a no-frills approach in terms of its services and branding and this can also be seen in its operation of Human Resource management in the company. Political, Economic, Socio- Cultural, Technological, Legal, and Environmental factors are all very influential in the operation of human resource management within Ryanair. These factors have undergone great changes over the last decade and in turn have affected the airline industry.
Ryanair implements strategic Human Resource management and advocates a productivity based on incentives approach. The payment of cabin crew and pilots is based on the number of hours flown. however, in recent years some flexibility in regards to hours have been shown. In 2016 Ryanair implemented some pay rises for their higher-grade staff and grades called JCSS. This was done in order to boost productivity to fund recruitment for additional staff.
Recruitment is an important area of human resource management. Ryanair recruit's candidates by advertising vacancies. According to its website Ryanair can offer individuals ‘the best career opportunities and progression in the industry'. Ryanair recruits both internally and externally, but similarly to most companies they prefer to recruit internally as it is more cost effective. However external recruitment is often necessary in order to maximise talent in the organisation. The first stage of Ryanair's recruitment process usually involves an English test, and a personal interview. If candidates are successful in the interview they then take part in training which is paid for by the candidate and costs €3000. Once candidates complete training they are on a one year probation period in the company.
The training and development of individuals within an organisation is another important area of human resource management. According to Dalmac before candidates “can operate as a Crew Member [they] must complete and pass an intensive training course. Training courses are conducted by Ryanair approved
instructors. Courses are full-time, Monday-Friday, for a period of about 5-6 weeks. (Some evening and weekend training may be required.)'. Dalmac and Crewlink are two companies which provide training for future Ryanair employees. In the case of Crewlink once candidates are taken on for a training course and fees are paid there is no guarantee of a job within Ryanair. This has caused controversy for the company in the past.
Employee relations in an organisation can be representative of how well their human resource management is operated. Ryanair has been no stranger to controversy in terms of its employee relations. Ryanair refuses to recognise or negotiate with trade unions although its employees are permitted to join these unions. This has been a prime cause of conflict in the organisation over the last number of years. Ryanair has also been repeatedly criticised for providing poor working conditions for its employees for example employees are banned from charging their phones at work to reduce the company's electricity bill and to cut costs. There have also been several claims against the company for allegedly bullying pilots into contracts. Bad employee relations resulting from what some may see as poor HR management can lead to unmotivated workers and in turn decrease productivity
Management control within organisations is seen primarily as a process for motivating and inspiring people to perform organisational activities that will further the organisation's goals. Ryanair's goals are to provide low-cost fares to destinations across Europe. It is a highly competitive company that has grown and garnered success under the control and leadership of its chief executive officer Michael O'Leary.
An important feature of management control is planning. Through effective planning an organisation can achieve its objectives and targets. O'Leary planned and restructured Ryanair in the early 1980's and laid out new objectives for the company. He introduced the idea of low cost fares to destinations across Europe. In order to do this, he utilised regional airports across Europe and cost cutting in every aspect of the airline.
There a number of other elements of control that Ryanair utilises in its management such as establishing standards of performance, monitoring actual performance and rectifying problems that arise within the company.
An example of Ryanair establishing standards of performance is with the company's measurement of punctuality. According to Ryanair's official website, punctuality is measured by industry standards ‘whereby any flight that arrives on or within 15 minutes of its scheduled arrival time is deemed to be ‘on time'. This aspect of control and monitoring of standards has been very successful for Ryanair and one of its strongest selling points.
Although control can be necessary for the effective management of an organisation it can often have negative connotations, and this can be seen especially in Ryanair. Ryanair's management closely supervises its staff, for example the banning of charging mobile phones at work by management to cut costs.
Ryanair is a large global business in a very competitive environment. Companies used to concentrate on limited aspects of an organization and tended to focus studying the business in isolation from its environment. Ryanair takes the contingency approach when structuring the business due to the fact it is in such a technologically advanced, fast paced, competitive environment. In order for Ryanair to stay competitive and successful it has to keep up to date with technology and the outside environment.
Due to their environment being so fast pace and ever changing it is evident that Ryanair obtains an organic mixed system as most modern businesses adapt to the wants and needs of their consumers and competitors. Although the need to be an organic system, it is important that Ryanair obtains a formal structure due to its sheer size as a global company. This is evident in Ryanair's structure as the Ryanair organizational structure features a 12 person board. According to the organizational chart the structure of the company is departmentalized with project teams from all areas of the structure. This creates a Matrix Structure. The matrix structure of the company clearly shows the chain of command and the span of control amongst the hierarchy creating a more formal structure allowing the employees a clearer view of who and where to respond to when involved in such a large global company such as Ryanair.
Although a matrix structure can sometimes be tough for employees to managae their workload it seems to have proved successful for the company making them the second largest low cost airline in Europe.
A companies culture is the personality of the company which is made up of all the individuals within the organization. Ryanair has recently had a huge change in culture as we talk about in one of the articles. When Ryanair launched in the 1980's it was set to be a no frills budget conscious airline. This was emphasised by Michael O'Leary himself “
People say the customer is always right, but you
know what - they\'re not. Sometimes they are wrong and they need to be told
so.” The company had an abrupt culture with a take or leave it approach to
However, Ryanair have changed their approach to customer service and this is
evident on their “Always getting better” section on their corporate website.
“The continued drive to improve our customer experience has been reflected in
the record passenger numbers and load factors we have had over the past 2
years, and we are pleased to launch Year 3 of our “Always Getting Better”
program.” This statement is in protest with what Michael O' Leary's take it or
leave it approach, highlighting the true movement in their approach to customer
This new approach has the commitment of its employees driving the business to
success. A company with clear values, beliefs and vision allows for employees
to embrace the organization. According to O'Reilly “organizational
commitment is typically conceived of as an individual's psychological bond to
the organization, including a sense of job involvement, loyalty, and a belief in
the values of the organization.” Employee commitment is much stronger
amongst the organization due to the fact the change in the approach to customer
Section 2 – Media Review
Wheelchair user denied boarding to a Ryanair flight
Niamh Herbert is a first-year student at Trinity College, who had booked a flight to London with her friends which was said to leave Dublin at 6:30am Friday 17/02/2017. Niamh has Friedreich's Ataxia which is a neuromuscular disorder which as of recently, forced her to use a wheelchair. According to Niamh, they arrived at the airport at 4:30am, took a short break and headed to the gate. When they arrived a staff, member asked her if she would mind walking up the steps.This in our opinion is Ryanair's first offence as the staff member was inconsiderate that the girl might not be able to walk up the stairs, therefore we deem it unethical of the employee to even think about asking the young woman such a thing.
Her friends remained with her at the gate while the flight deck was called to plan for boarding. They were then informed the plane's captain becoming impatient, and called the desk stating the aircraft needed to take off. Niamh told her friends to board however she was left behind. The staff let her board the next flight when she demanded compensation. Initially she booked the flight the day beforehand and paid €160 to get the flight changed. She presumed after she called to make sure it processed, that her request for wheelchair assistance would be the same for this flight.
Ryanair's statement claims she only arrived 13 minutes before hand and that she didn't book wheelchair assistance in advance. The company laid sole responsibility to Ms Herbert for the fact she couldn't board the flight without so much as an apology to the young woman for her treatment beforehand. Although the booking for wheelchair assistance may not have come across, Ryanair should make it available around the clock for all flights.
Even if she didn't book wheelchair assistance in her next flight or if she did arrive late at the terminal, Ryanair should have been able to deal with the situation better at the time and the staff should have treated the girl with more respect as it seems she had to plead to get the next flight. However, even when Ryanair got the chance to perhaps redeem itself in some way in issuing its statement, there was no apology or any sympathy shown towards Ms Herbert for the incident and the company took no responsibility in the matter, making it look like a childish attempt to cover itself from damage. It is clear that Ryanair need to work on their corporate responsibility as well as their business ethics as the company shows its doing itself no favours in trying to repair its reputation from past events.
Is there a customer service lesson to be learned in the past
12 months for Ryanair?
Laurie J. Mullins cites change as “an inevitable and constant feature” and as “an inescapable part of both social and organizational life”
Ryanair has experienced dramatic change over its time in business but it could be argued that Ryanair's change in its customer service approach has been the greatest change for the company in its lifetime. Mullins also explains that for a company to survive it must interact with its external environment. Consumer Service Excellence or CSE published an article which examined the journey Ryanair took to change their customer service approach.
2013 marked a period of uncertainty for Ryanair as the company encountered many forces of change. Economic uncertainty lead to weak consumer spending, a fall in the price of sterling as well as stiffer competition in the market and increasing demands from consumers proved challenging for the airline. In the article, we learn that Which magazine “published results of Customer Satisfaction of 100 Brands in the UK with Ryanair scoring lowest with a rating of 54% which did not help the airline during this troubling time.
Triggered by the need to respond to these new challenges it had been thought that Ryanair would combat falling sales with their usual “no frills model” and slash prices. However, Ryanair wanted to bring about real change so initiated a planned organizational change. Through the “airlines news customer feedback initiative” Ryanair would be able to establish areas in which change in customer service was required. According to Mullins “a planned change represents an intentional attempt to improve.” The issues raised in the feedback initiative highlighted a need for behavior modification within the organization. Lewins three phase process can be applied to Ryanair's situation. In Ryanair's planned change effort problems were identified by examining company's disappointing performance. Data relating to company performance was then collected. Poor customer service was recognized as a major flaw in the organization and Ryanair then devised a plan of action entitled “Always Getting Better.” Ryanair implemented their plan with their “colourful CEO hint(ing) quite strongly that perhaps Ryanair had been “over the top with carry-on luggage” restrictions and “other passenger issues”.
The article examines the detail of the action plan and how Ryanair would now offer passengers a friendlier service with “fully allocated seating” on all its flights. as well as “second small carry-on bag” and a 24-hour “grace period” to allow passengers correct minor booking errors.” An improved booking system would also reduce the time taken to book fights. Cleverly Ryanair extensively
publicized changes made and reminded us that the customer feedback initiative placed customers in the driving seat of the business setting service standards. Following its implementation, a “knock-out set of results” were achieved which “caught themselves (Ryanair) and analysts by surprise.” Revenue increased by almost 11% while pre-tax profits rose 152%. CSE'S article highlights the harmful effect of having unsatisfied customers who feel largely ignored by a corporation. By creating a customer service change its clear that a company can grow and prosper like Ryanair has done.
In Wood's article he examines Ryanair's approach to attracting the right employees for their business. In the article according to Darrell Hughes, the airlines deputy HR director the loudmouth approach on social media taken by Ryanair acts as a “sort of recruitment filter”.
This is important for the culture of Ryanair as it ensures that employees retain employee commitment to the company by taking pride in the company's values and beliefs.
This abrupt “loudmouth” approach is prominent across all the department according to Woods. This “cheeky” attitude across employees drums up publicity especially by the CEO Michael O' Leary who is very active on twitter and is known for his controversial tweets such as \"You\'re not getting a refund so f**k off. We don\'t want to hear your sob stories. What part of \'no refund\' don\'t you understand?\" This culture is brought through the company with very controversial marketing campaigns such as a swipe at “Aer-Lingus” staff for carrying illegal immigrants on board.
In the article Hughes recognizes that this culture is working for the firm and this he believes attracts staff that are “hard-working, dedicated, a little bit irreverent, cheeky and fun”. Although according to Woods the culture is used throughout the business he says Ryanair also adapts their culture to their ever growing tech team. He believes creativity cannot be capped and that these teams need a more laissez-faire environment. We believe this shows the thought put in to driving the business to success.
Section 3 – Bibliography References
MULLINS, L. J., CHRISTY, G. AND MULLINS, L. J.
Management & organisational behaviour
In-text: (Mullins, Christy and Mullins, 2010)
Your Bibliography: Mullins, L., Christy, G. and Mullins, L. (2010). Management & organisational behaviour. 1st ed. Harlow: Financial Times Prentice Hall.
The Irish Times. (2017). Wheelchair user says she was denied boarding to Ryanair flight. [online] Available at: http://www.irishtimes.com/news/consumer/wheelchair-user-says-she-was- denied-boarding-to-ryanair-flight-1.2983765 [Accessed 18 Mar. 2017].
Ryanair.com. (2017). Official Ryanair website | Cheap flights from Ireland | Ryanair. [online] Available at: https://www.ryanair.com/ie/en/useful- info/about-ryanair/about_us [Accessed 16 Mar. 2017].
Ryanair.com. (2017). History of Ryanair. [online] Available at: https://corporate.ryanair.com/about-us/history-of-ryanair/ [Accessed 16 Mar. 2017].
Customer Service Excellence Ireland. (2017). Is there a Customer Service lesson from Ryanair?. [online] Available at: http://www.cseireland.ie/customer- service-lesson-ryanair/ [Accessed 14 Mar. 2017].
Woods, Killian. \"How Ryanair\'s Loudmouth Approach Helps Them Find \'Fun, Irreverent And Cheeky\' Staff\". TheJournal.ie. N.p., 2017. Wed 13th Mar. 2017.
New Ryanair cabin crew deal covers pay rises, a. (2017). Pay rises and new rosters for Ryanair cabin crew. [online] RTE.ie. Available at: https://www.rte.ie/news/business/2016/0120/761585-ryanair-cabin-crew-deal/ [Accessed 13 Mar. 2017].
Doward, J. (2017). Trainees are charged hefty fees to work for Ryanair. [online] the Guardian. Available at: https://www.theguardian.com/business/2013/oct/26/ryanair-cabin-crew- training-fees [Accessed 16 Mar. 2017].
Dalmac, D. (2017). The Training Course : Dalmac. [online] Dalmac.ie. Available at: http://www.dalmac.ie/the-training-course-guarantee.php [Accessed 15 Mar. 2017]
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