You are on page 1of 3 Search inside document 1. Ryanair was launched with two important strategies in mind. They wanted to deliver first-rate customer service, with meals and amenities comparable to what Aer Lingus and British Airways provided. They wanted to be positioned in the same comfort category as the mentioned airlines.
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Both airlines established routes in the lucrative Dublin — London markets and tap on profits from this route to finance their other less profitable operations. The demand for air travel between the Dublin and London has probably stabilized over the 10 years from the stagnant market share of half million air travelers. The strategy entails to achieve the following: 1. With the same level of service and catering in the flight, Ryanair cannot subsidize its costs through its operations.
Aer Lingus and British Airways will lower their prices and start a price-war The entry of Ryanair would probably pose serious price war competition with the established carriers in the short run. Despite its high overhead costs, BA has the size and operating profits to compete on this one route on price, but for Aer Lingus, the politics involved in having to continue on with routes despite operational losses, eg its trans-Atlantic routes, would probably not allow the airline to maintain the low airfare it offered for too long.
Aer Lingus needs to maximize the profit on this Dublin to London sector to sustain its other less profitable operations. There would probably be a subsequent increase in the demand for air travel from the pool of customers that used to travel by ground transportation due to the attractive fares and services offered by the airlines.
The real challenge for Ryanair would probably come in the long run when the air carrier, and possibly the ground operators will start to make losses from the price-war. Share Article:.
Dogfight over Europe: Ryanair (C) Case Study Analysis & Solution
Brushing up HBR fundamentals will provide a strong base for investigative reading. Often readers scan through the business case study without having a clear map in mind. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions. Reading up the HBR fundamentals helps in sketching out business case study analysis and solution roadmap even before you start reading the case study.
Dogfight Over Europe : Ryanair
However, the success of this strategy would require Ryanair to manage the expenses and keep costs low. Ryanair has decided to offer full service meals and amenities while offering lower price. This would definitely put strain on the costs. Moreover, they are planning to get a larger aircraft. This will increase aircraft maintenance costs as they will have to service 2 different types of aircrafts.
Dogfight Over Europe Ryanair (A, B & C)
Dogfight over Europe: Ryanair
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