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Ryanair Case Study Summary

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Examining Ryanair’s Launch Strategy

Ryanair was set up in 1985 by Cathal and Declan Ryan, as one of the first independent airline servicing the Dublin-London (Luton) route. Ryanair launched its service focusing on delivering first-rate customer service and lowest – simple, single – fare @ I£ 98, compared to I£ 208 full fare and I£ 99 discounted fare offered by competition, Aer Lingus and British Airways.

Ryanair Executives believe that Aer Lingus and British Airways’ flights are typically 60-70% full on the Dublin-London route, which means that the Average Revenue earned per available seat is 60-70% of the total revenue. Also, the total number of air passengers is 0.5 million compared to 0.75 million rail and ferry passengers, paying …show more content…

The use of only one kind of plane might help Ryanair limit its Engineering, other Aircraft related handling, ground equipment and maintenance costs.

• As per the case facts Ryanair has decided to work with London’s secondary airport, Luton instead of the main airport Heathrow from where British Airways and Aer Lingus operate. We can safely assume that at secondary airports like Luton, the traffic is not congested and fees might be comparably lower. This would help Ryanair reduce their Landing fees and en route charges, bringing down the costs further.

• We know that British Airways provides its own passenger and ground services, caters its own flights, and performs most of its own maintenance at Heathrow. If Ryanair were to outsource and contract out all these services to third-party providers, it would help limit its fixed costs and improve operating profit margin.

• British Airways sells tickets over phone, through retail point of purchase and agent network globally. If Ryanair were to contract this activity out to third party or use e-ticketing, it would help control cost of sales component and improve upon the operating profit margin.

In nutshell, the launch strategy that Ryanair has adopted is though valuable and rare at this point in the market, but is quite imitable. With competition such has British Airways and Aer Lingus who have

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