Ryanair case

Topics: Aer Lingus, Ryanair, Low-cost carrier Pages: 2 (738 words) Published: May 18, 2014
1. What is your assessment of Ryanair’s launch strategy.  After establishing its ability to transport passengers from Ireland to secondary London airports (i.e. Luton and Gatwick), Ryanair entered competition with British Airways and Aer Lingus to provide air travel from Dublin to London. They were able to complete with these well-established carriers by:    A. focusing intently upon first-rate customer service and amenities comparable to BA and AL    B. offering a simple ticket w/ no restrictions

   C. pricing of ₤98 in comparison to BA or AL price of ₤208

2. How do you expect Aer Lingus and British Airways to respond? Why? Both carriers were already well-established in the Dublin-London route and the route provided a high volume of business and return on capital especially for AL. In order to eliminate loss of passengers to Ryanair, both carriers would probably opt to offer lower fares and greater frequency of flights.

3. How costly would it be for Aer Lingus and British Airways to retaliate against Ryanair’s launch rather than to accommodate it? Marginal cost would be higher than marginal benefits for BA or AL to retaliate.

4. Can the Ryan brothers make money at the fare they propose? They’ve concentrated all their efforts and resources upon very specific travel between Ireland and England that allows them to be competitive and cost-efficient compared to BA and AL.

1. What is your assessment of Ryanair's launch strategy? What do you think about their approach? Company operates a low-fares scheduled passenger airline serving short-haul, point-to-point routes primarily between Ireland and the UK. Cost containment and operating efficiencies has always been vital part of the way things are done at Ryanair. Primary targeting fare conscious or business travelers who might otherwise not travelled at all or use other methods of transport such as ferries or trains. Low fares can be used to stimulate demand. Ryanair’s air was be able to reduce or...
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