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    Dog Fight Ryan Air

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    Ryan Air was able to compete in the highly regulated airline industry through low fares and profitable domestic routes. It offered two fare options - one with full services at a reasonable price and another with a marginally higher fare than other transportation. Ryan Air also increased frequency of flights and implemented customer loyalty programs. British Airways could respond to Ryan Air's low prices by lowering its own fares to capture market share using its larger capital. Aer Lingus may position itself as a premium rather than budget airline to attract a different customer base and lobby the government to constrain Ryan Air's operations.

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    Dog Fight Ryan Air

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    Anonymous
    24 views1 page
    Ryan Air was able to compete in the highly regulated airline industry through low fares and profitable domestic routes. It offered two fare options - one with full services at a reasonable price and another with a marginally higher fare than other transportation. Ryan Air also increased frequency of flights and implemented customer loyalty programs. British Airways could respond to Ryan Air's low prices by lowering its own fares to capture market share using its larger capital. Aer Lingus may position itself as a premium rather than budget airline to attract a different customer base and lobby the government to constrain Ryan Air's operations.

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    Ryan Air was able to compete in the highly regulated airline industry through low fares and profitable domestic routes. It offered two fare options - one with full services at a reasonable price and another with a marginally higher fare than other transportation. Ryan Air also increased frequency of flights and implemented customer loyalty programs. British Airways could respond to Ryan Air's low prices by lowering its own fares to capture market share using its larger capital. Aer Lingus may position itself as a premium rather than budget airline to attract a different customer base and lobby the government to constrain Ryan Air's operations.

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    24 views1 page

    Dog Fight Ryan Air

    Uploaded by

    Anonymous
    Ryan Air was able to compete in the highly regulated airline industry through low fares and profitable domestic routes. It offered two fare options - one with full services at a reasonable price and another with a marginally higher fare than other transportation. Ryan Air also increased frequency of flights and implemented customer loyalty programs. British Airways could respond to Ryan Air's low prices by lowering its own fares to capture market share using its larger capital. Aer Lingus may position itself as a premium rather than budget airline to attract a different customer base and lobby the government to constrain Ryan Air's operations.

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    Dog fight: Ryan Air

    Q1. Reasons for a very high inefficiency in airline industry during t 1950s to late 1980’s?
    Ans. Heavily government regulated, fragmented industry was the reason for inefficiency. Under
    regulations:
             fares were fixed which affected the domestic passengers.
             only flights which flew or terminated on their national soil were allowed which
    restricted them from taking profitable routes.
           Bilateral and multilateral agreements were set which didn’t allow free competition.

    Q2. How can any new entrant (like Ryan Air) can compete in the Airline Industry(based on your
    Q1)?
    Ans. A new entrant can compete in the Airline Industry using the following methods:
             Maintaining low-cost fares of domestic flights can attract a large number of passengers
             Choosing profitable (domestic) routes can help in making profits as compared to
    previously fixed routes
             Two cost variants of flights: one with full-fledged services at a manageable fare and
    other with fare marginally higher than rail and ferry ride.
             By increasing the number of trips, Providing complementary services and implementing
    customer loyalty programs.
             By collaborating with different industries like hotels by bringing them customers on the
    basis of profit share.
     
    Q3. What could be the response of British Airways & Aer Lingus on Ryan Air low price offer and
    why?
    Ans.
    BA: Is well established and has large investments available so they can sell tickets at lower
    prices to capture market share. Ryanair, may not have sufficient capital to reduce the price
    (profit being low: 4.4%) and incur a loss which may force them either to shut down or come
    up with an alternative plan.
     
    AL: They may use maintenance services and technology to portray as premium airlines not
    budget airlines. This may reduce market share, but would provide a different customer base,
    And also can try convincing the government to limit Ryanair from flying larger aircraft by
    imposing constraints.

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