The low-cost airline model in Europe on the example of Ryanair and the passengers' perception

After five years of operations, growth in aircraft and routes the result was only a loss of £20 million. That means that the company needed some change within its operating model, and following the Southwest Airlines, re-launched itself as the Europe’s first low-cost airline. Ryanair moved to a single aircraft fleet type, eliminating free drinks and free meals on board, and offering higher frequency flights. The result, as declared by Ryanair website (2010), was a reduction of the fares from £99 to £59 return.

In 1991 The Gulf War caused a further airline traffic collapse. During this year Ryanair switches its main base in London, moving from Luton airport to the new Stansted airport, which was developed by British Airways to become the third main airport in London.
Ryanair continued to restructure its operating model, cutting back routes and fleet. The route network in 1992 passed from 19 to just 6 routes: Dublin-Stansted, Dublin-Luton, Dublin-Liverpool and Cork, Shannon and Knock to Stansted. Curiously, despite this important reduction in routes, traffic growth over 45%, probably because of the lower fares and the increase in frequency.

In 1993 Ryanair launched its first new route for 5 years, from Dublin to Birmingham and for the first time it carried over 1 million passengers in one year.
Moreover, Ryanair made a deal to buy a fleet of six new Boeing 737 aircraft direct from Boeing in order to replace all its old jets.
1995 is a very important year for the company. Firstly because Ryanair became the largest passenger airline on the biggest international scheduled route in Europe, (Dublin-London), overcoming Aer Lingus and British Airways. And secondly because Ryanair became the first low-cost airline to operate a domestic route in the UK (Stansted-Glasgow Prestwick). After having bought 4 more Boeing 737s the fleet reached a totality of 11 aircraft, and passengers traffic exceeded 2 millions for the first time.

In 1998 The Irish Air Transport Users Committee voted Ryanair as “Airline of the Year”, and the prestigious International Aviation Week magazine voted it as “Best Managed National Airline”.
In the meanwhile Ryanair ordered other 45 Boeing 737-800, taking delivery of five aircrafts in a year. This allowed Ryanair to operate with significantly lower seat costs, to launch new routes and to offer much lower airfares; the lowest ever return fare is introduced: £19.99 on the Dublin-London route.