Sparky
In 2005 they stated that Margins were excessively high and couldn't continue longer term. A business will love this short term but they have to plan for organic growth as its generally cheaper than buying another airline.
The agressive expansion of routes was based on looking at the way EU was developing and the opportunities that would result from this. Additionally there was a lot of new aircraft due bought post 9/11 that needed homes.
Capital cities are well served by existing airlines, as are secondary cities but there was always smaller cities and areas that couldn't really increase tourism and business opportunities as many countries tend to keep investments into big cities.
In a way agressive expansion has a cost as can do it too quickly and run out of cash or it stretches an organisation so much that people can not cope and the organisation collapses.
In Ryanair's case they have the cash and as an organisation they are pretty small but that allows them to move quickly. They make mistakes but the key is learning from a mistake.
Ultimately looking at the way the legacy carriers have contracted i.e. BA or disappeared Sabena / Swiss / Austrian / Alitalia there was always a model where being nimble would help because you are not stuck with heritage costs and unions who wish to preserve the status quo.
They are continuing to expand but now with many major airports like BCN / CPH etc losing numbers there are opportunities that will develop here. Locking in slots at these airports will start to hurt legacy carriers and it will happen.
I guess the benefit can be meaured in many areas where an airport existed in name only before and you are getting 50 - 100,000 passengers going through it.
Tourism is more effective in creating local jobs in economically disadvantaged areas than direct state aid. Quite simply money spent in tourism tends to stay local and is more likely to be respent locally. Where as state aid can have political strings attached or just get stolen by the mafia as in Italy.
I think the Ryanair of 2016 will bear little resemblance to the Ryanair of 2009 but then again there is a huge diff between 2009 Ryanair and 1999 Ryanair.
Ultimately Ryanair board is there to serve the interests of its shareholders and the agressive building of market share will stop in about 5 years and they will be more interested in dividend policy etc.
MOL is fond of saying there will be 4-5 majors in Europe eventually with AF / LH / FR / Easyjet and maybe BA with quite a few secondary airlines in niche markets. Personally think BA and Easyjet may get tied together but that just a guess.
Ryanair I think just happened to be in the right place at the right time and particularly post 9/11 made calls that would have bankrupted them had passengers stopped flying. As the Americans say its betting the farm and hoping it works.
Their willingness to look at every activity and see whether its a revenue generator or a cost and take action is pretty unique for a service industry BUT is pretty common in manufacturing. This enables them to develop ancillary revenue from everything you can think of.
Like them or hate them they are the most successful Airline in Europe over the last 10 years and commercially are way ahead of their competitors in thinking of how to generate a profit.
Stand by for the thrashing of the busines model now.