Support system for low costs

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Ryanair is known for its ruthless approach to keeping costs low. So what systems does it use to support this financial rigour?

The only element a passenger is likely to encounter is the company’s sales system, Navitaire’s Open Skies, which handles all ticket sales via the call centre, the internet or at an airport.

“It is a low cost airline product so it’s more straightforward, with no frequent flyer programmes, no connections,” says Lorraine Cassidy, financial accountant at Ryanair. “It was written in the 1990s, not the 1970s like some of the other systems which run on a mainframe.”

Summaries of each day’s business are fed into the accounting system running on SAP software. “We sell 7,000 seats an hour. There would be no point having all that detail in the SAP system,” she says.

The SAP system was installed six years ago and it handles all the basic finance functions, supplying real time data to 40 full-time users. The system is used at both Stansted and Dublin so it had to be able to run on a wide-area network for staff in both locations to use it.

The SAP system keeps track of basic items such as uniforms and stationery, but the aircraft parts and other engineering items are handled by a separate system, called AMOS. For safety reasons it tracks how many flights each part has made and ensures they are taken out of service after they have spent their allotted number of hours in the air. “It’s too complicated for SAP,” says Brona Kernan, Ryanair’s head of IT.

But she appreciated the ease with which these specialised systems have been able to plug into the SAP system. “We’ve been able to interface a huge number of systems with SAP,” she says.

The low cost airline business operates on thin margins so analysing the costs and profitability of each route is crucial to keeping planes full while staying in profit. For this Ryanair uses another tool, from corporate performance management vendor Cognos.

“If you are getting route profitability from SAP it wouldn’t be as timely. But when we need to get information out of the system, SAP makes it easier to get and easier to compile,” says Ms Cassidy.

However, not every aspect of the SAP system is perfect for Ryanair. “In an IT context SAP doesn’t really fit in with our cost-conscious model,” says Ms Kernan. “We try to ensure that our IT infrastructure is highly available and requires very little handling.”

It has three versions of its SAP system, one for developing new features, one for testing them and another which runs the business. Each system runs on a separate set of servers, so every time the software has to be upgraded or patched, it has to be done three times. “We have to replicate a lot of work. It is a lot of overhead for something that is just handling our general ledger,” says Ms Kernan.

There are many aspects it appreciates about SAP, particularly compared with the previous system. “We haven’t had any downtime at all,” says Ms Cassidy, “And it handles Ryanair’s growth of 20 per cent per year.” But in a company where staff were banned from charging up their mobile phones with company electricity, anything which increases costs will be unwelcome.

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