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Dog Fight over Europe

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DOG FIGHT OVER EUROPE – RYAN AIR
Protagonist. Cathal and Declan Ryan of RyanAir.
Macro & Micro Industry Analysis. * The aviation industry over Europe and Atlantic routes was a heavily regulated and subsidised by the respective governments. * Most were heavily ‘unionised’. * Recessions of 70’s and oil crisis lead to a period of losses in most operators and were borne by the state in one manner or other. * Gradual ‘privatisation’ of the operators was in progress and allowed introduction of some new players but the market was not ‘even keel’. * In the British – Ireland segment the larger player ‘BA’ and Irish carrier Aer Lingus were established. * BA had a large ‘ticket sales network’ and was effective in a large volume through such agents 83%. * Aer Lingus was operating in loss as far as Trans Atlantic segment was concerned but making a profit in non transportation businesses it had diversified in. * Competition also existed in form of ferry service which took nine hours but costed only £55 for a return trip as compared to I£208 for BA and Aer Lingus.
Problem Identification * Evaluate the possibility of sustaining the operation of RyanAir with two routes.
Observations.
The problem of Ryanair is basically concerned with three major components:- * Defining the Value Proposition to the Customers. In this case the values of air travel in a country which typically does not lend itself to commercial aviation in comparison to a cheaper option of rail / ferry travel. Therefore customer service with a much lower single fare than the competitors. * Benefit Assertion. The pricing of RyanAir is competitive with respect to early booking discount fare of £98 which has to be booked a month in advance. Ryanair has kept a uniform pricing mechanism. * Point of Differentiation. Ryanair would provide all facilities to its

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