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Dogfight over Europe: Ryanair (a)

Satisfactory Essays

For the exclusive use of J. SICINSKI
Harvard Business School 9-700-115
Rev. November 21, 2007
Dogfight over Europe: Ryanair (A)
In April, 1986, the upstart Irish airline Ryanair announced that it would soon commence service between Dublin and London. For nearly a year, the new airline had operated a 14-seat turboprop between Waterford, in the southeast of Ireland, and Gatwick Airport on the outskirts of London. The founders of Ryanair, brothers Cathal and Declan Ryan, felt that service on that first route had developed well. They knew, however, that the Dublin-London route would pose new challenges. For the first time, they would face Aer Lingus, British Airways, and other established competitors on a major route.
European Aviation
The …show more content…

A 1984 memorandum from the European Commission proposed the abolition of pooling arrangements, price fixing, and government subsidies. Trade unions and flag carriers allied to defeat the proposal. In 1986, the Single European Act called for the creation of a unified European market by the end of 1992. The market was intended to “comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured....”7 Industry observers expected new proposals for the liberalization of the European airline industry to follow.
This document is authorized for use only by Jan Sicinski in Strategic Management IBP 10-11 taught by Dr. TOMASZ LUDWICKI from October 2010 to April 2011.
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For the exclusive use of J. SICINSKI Dogfight over Europe: Ryanair (A) 700-115
British Aviation and British Airways
While Europe as a whole remained dominated by state-owned carriers with government- mandated monopolies or near-monopolies, individual countries moved to liberalize their domestic airline industries and to push for international deregulation on a bilateral basis with individual countries.8 The United Kingdom was among the most aggressive in doing so. As early as 1971, Britain’s airline regulator, the Civil Aviation Authority, encouraged the establishment of British Caledonian Airways (BCal) as a “second force” to compete with the dominant, state-owned British Airways (BA). Labor Party governments,

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