Six Sigma Case Study: Ryanair

In today’s hypercompetitive traveling industry, operational efficiency and excellence are the two major elements for success. A clear, innovative and efficient strategy can really take off in the current traveling climate. Yet, the ideal operational strategy is not always easy to recognize immediately. Instead, aviation providers such as Ryanair must become adaptive and innovative to form their own efficient operations strategy. This organic operations strategy becomes the cornerstone of decision making and direct action for companies in a highly competitive market.

Introduction to Ryanair

Ryanair is an Irish low-cost airline, first flying in 1985. Over the years, it has become one of Europe’s most popular aviation providers. While Ryanair was originally intended to fly between London and Southeast Ireland, the company’s route network continues to grow rapidly. Net profits, according to the BBC, for the year 2014-15 rose to 66%. Yet, to keep up with its established rivals, it’s integral that it establishes its own service through innovation.

In a hyper-competitive traveling industry, customers can purchase tickets for as little as €1. But how does a company like Ryanair adapt its own values to execute efficiency and operational excellence? In part, it’s by operating an adaptive method of delivery and diagnosing problem areas. Ryanair has been able to increase their profits and reduce losses through the Six Sigma quality management tools. Through strategic management, Ryanair defines and measures operational outcomes and improves a number of their basic practices and systems.

The Six Sigma Methods

Since 1986, a variety of companies and industries have begun using Six Sigma methodologies. These methods help to increase customer satisfaction, stabilize quality assurance, and reduce the occurrence of production defects.

So what exactly is Six Sigma? Former CEO of General Electric, Jack Welch says: “Six Sigma is a quality program that, when all is said and done, improves your customer’s experience, lowers your costs, and builds better leaders.”

This strategic management process is integral to the growth of any company. It follows the DMAIC five-phase project methodology. First by ‘Defining the system’, then ‘Measuring key aspects of current processes’. Next, by ‘Analyzing data to investigate and verify cause and effect’, and ‘Improving current processes based on data analysis’. Finally, by ‘Controlling the future state of processes to ensure that any deviations from the target are corrected before defects are produced’.

To fully implement Six Sigma methodologies, you require Six Sigma GMA training. This rigorous training provides advocates with the knowledge and expertise to maximize a project’s overall success. Likewise, it observes, recognizes, and improves on current processes.

Six Sigma Black Belts train to exhibit a relentless level of cost consciousness. Through a rigorous and systematic approach led by a cross-functional team, Six Sigma was able to use statistical analysis to measure Ryanair’s operational performance. With the help of Six Sigma, Ryanair was able to eliminate a number of significant cost drivers associated with other airlines and retain low-fares and high-service.

With the aid of Six Sigma yellow belts, Six Sigma green belts, and Six Sigma black belts, Ryanair was able to develop and implement a plan to cut costs and increase customer satisfaction.

Implementing Six Sigma into Ryanair

Having established itself as Europe’s leading low-fare passenger airline, Ryanair aims to utilize these low-fares to generate increased passenger traffic. Fare-conscious leisure and business flyers are targeted and encouraged to fly on one leg of a point-to-point basis. Ryanair maximizes its frequency of short haul flights to stimulate the demand of those travelers who otherwise might have used other means of transportation. Additionally, Ryanair reduces their own costs by flying to smaller, secondary and regional airports that are free from congestion and cost less to use. Through reducing their own costs, Ryanair can provide their customers with a stable, predictable and low-cost service.

Low-fares are the crux of Ryanair’s business model, so how are they able to make a profit and become one of Europe’s leading airlines? By offering passengers rock-bottom prices for their seats, the company is able to charge for ancillary services such as in-flight meals and beverages, baggage costs and early check-ins. The airline is able to increase their revenue by stimulating passenger growth and offering their famous no-frills service.

More Than Just Low Fares

While Ryanair, at the time of writing, flies to over 190 destinations, these are mostly short-haul flights that operate regularly. With this in mind, Ryanair reduces their need to offer an in-flight “all-frills” service. In turn, this increases personnel productivity by allowing staff to focus solely on their duties. By delivering the best possible customer service experience within the low-budget airline industry, Ryanair staff execute their duties and provide a consistent service that customers recognize.

Through deploying Six Sigma advocates and leaders, Ryanair gave themselves a direct advantage in the aviation industry by establishing a set of performance objectives. These are quality, speed, dependability, flexibility, and cost.

Accurate data is integral to the implementation of any Six Sigma methodology, and thus eliminate unnecessary costs. For example, Ryanair scrapped the use of window shades in their aircraft in order to remove unwarranted maintenance costs that came hand-in-hand with damaged or ill-functioning window shades. This also reduced fuel costs by removing the unnecessary weight of the window shades.

Methodology for Success

Ryanair’s adaptive approach to keeping costs down for itself and its dedicated passengers is a testament to its commitment towards innovation. Though the company has a long history of commitment to the fare-conscious budget traveler, the use of the Six Sigma methodology has enabled it to keep up with its competitors and set a precedent for the low-fare travel in the aviation industry.

With their operational strategy streamlined, Ryanair improves their business practices and continues their longstanding commitment to low-budget travel.