Pricing Strategy for Ryanair

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STRATEGY

Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled

passenger airline through continued improvements and expanded offerings of its low-fares

service. Ryanair aims to offer low fares that generate increased passenger traffic while

maintaining a continuous focus on cost-containment and operating efficiencies. The key

elements of Ryanair’s strategy are:

Low Fares. Ryanair’s low fares are designed to stimulate demand, particularly from

fare-conscious leisure and business travelers who might otherwise have used alternative forms of

transportation or would not have traveled at all. Ryanair sells seats on a one-way basis, thus

eliminating minimum stay requirements from all travel on Ryanair scheduled services, regardless

of fare. Ryanair sets fares on the basis of the demand for particular flights and by reference to the

period remaining to the date of departure of the flight, with higher fares charged on flights with

higher levels of demand for bookings made nearer to the date of departure. Ryanair’s Dublin to

London (Stansted) route is its largest route in terms of passenger volume, with fares ranging from

[pic]0.99 to [pic]199.99 (excluding government taxes and passenger service charges). Ryanair’s

competitors generally do not operate a one-way pricing policy, so direct comparison is not

possible, but current round-trip fares on Aer Lingus, Ryanair’s largest competitor on the LondonDublin route, for travel in September 2004 were [pic]82.27 for economy restricted return tickets,

[pic]218.27 for economy flexible return and [pic]353.75 for business class tickets. In July 2004, Ryanair

launched a fare promotion offering a total of one million seats on certain routes for “[pic]0.99”

(excluding government taxes and passenger service charges) for travel during the period between

September 7, 2004 and January 31, 2005,

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