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Chapter Casestudy3

COMM 491 Chapter Casestudy3: RyanAir case notes

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COMM 491
Adam Pancratz

What do you thik of Ryanairs launch strategy? Classnotes: Main differentiator as service but running a budget service. Look at per customer revenue. FC: Staff, fuel, depreciation, aircraft maintenance, accomodation MC: selling costs, landing fees, 1) switching costs of customers are very low. 2) Compete on price: @98 cheaper than the best Ba and AL flights. Supported by the fact that Tourists are VERY price sensitive: thats why in 1970 recession AL who has the bulk of their clientele from tourists took such a heavy hit. 3) Ba and AL benefit from being flag carriers BUT since customers are price sensitive and switching costs are low, it is likely that customers dont have loyalty to one airlines and thus Ryan air doesnt have to worry about the established flag carrier airline reputations. HOWEVER, Ryanair (currently at the point of time in the case) flies small 44 seat planes which some customers may be unconfortable with. 4) Ryan Air might also need to consider the demand of customers wanting a Londondublin flight: with a stagnant demand 6070 and the rising of alternative travel methods might be a barrier for Ryan 5) Ryan air plans to a) provide the same cx service as flagship airlines but b) charge only a 98L flay unrestricted fee A) might not be super effective, flying a 44 seater might devalue the added benefit that customer service brings. B) Since flying a 44 seater, might be better to lower price even more and not compete on SERVICE. (differentiate by being a
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