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Group IV
Akshay Garg (251072)
Case Bhavya Bhatia (251083)
Kaustubh Kashyap
Analysis (251094)
Dogfight over Europe: Pranshu Agrawal
Ryanair (251105)
Saurabh Sagar Sharma
Case Introduction
Analysis of Ryanair company which started in 1985 to
provide service between Waterford and Gatwick Airport.
In 1986, it started operating between Dublin-London
route.
Provided a very lucrative opportunity to Ryanair.
A lot of passengers travelled on this route.
Competitors were Aer Lingus and British Airways.
Background
Airline Industry in Europe was dominated by state
owned Airlines (flag carriers) in 1930s. Each country
governments had route structures to serve their own
colonial aims.
World War II made air travel economical. Bilateral
agreements were formed between the nations to
promote combined self interest.
In 1970s, jet fuel prices rose and wide-bodied aircrafts
came into picture which created financial straits on
Europe flag carriers
1986 provided with the liberalisation of European airline
industry.
British Airways Analysis
Operating at a very high costs since world war ii
Incurred losses in 1981.
Reduced staff, surrendered loss making routes and
shuttered maintenance stations and training colleges in
1985.
In 1986, 145 destinations in 68 countries, a fleet of 163
aircraft ranging from 44 seats turboprops to 400 seats
Boeing 747s.
Sold tickets via telephone, 171 retail shops and 49000
independent travel agents.
Aer Lingus Analysis
Founded in 1936 by government and private interests.
Incurred losses during 1930s and 40s.
Went into agreement with BAs predecessors and gained
monopoly rights over Irish sea until development of
trans-Atlantic routes.
Hit on revenues in 1970s due to recession in mid 1970s.
Sought to new sources of revenue and profits.
Ryanair Analysis
Started in 1985. Gained licence to operate between Dublin and
London.
Aer Lingus and BA were already present with their major
revenues from this route.
Prevailing air fares were as low as I99 for a round trip while
prices for rail and ferry tickets were as low as I55.
Ryanair publicized a fare of I98.
Offered meals and amenities compared to what competitors were
providing.
Major strategies were providing first class customer service and
charge a simple fare with no restrictions.
Findings
The new route was profitable
Ryanair kept low prices in compare with the
competition. However, thats the only thing they had to
offer.
Aer Lingus didnt provided a bigger threat as their focus
diverted to ancillary businesses.
British Airways provided a greater threat as they were
government funded and had bigger planes.
Thank
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