Ryanair Case Study: Southwest Airlines

3.1. Introduction

Whoever was the first low cost airline and, consequently, the pioneer of the low cost idea – the Pacific Southwest Airline (PSA), Southwest Airlines or Laker Airways – this business idea has definitely revolutionized aviation market and has become part of today´s flight market (Groß & Schröder, 2007).

LCCs - Low cost carriers represent one of the most exciting and dynamic developments in recent commercial aviation history. Creating new products and minimizing the financial costs of air service operations, LCCs have been able to reduce air ticket fares and in this way they have enabled growing numbers of people to fly to more places, more often and at a lower cost than had been previously possible. The availability of cheaper

Characteristics of low cost carriers

Even though a universally accepted definition of low cost carriers doesn´t exist, they generally can be distinguished by the other airlines because of the fact that they have a common cost-reduction strategy on these

After a visit to Southwest Airlines in 1991, the managers of Ryanair decided to reinforce the low-fare strategy and reduce further costs. The new strategies brought the company to the first profits in 1992, afterward traffic and profits grew steadily in the following years. (Doganis, 2006). Today Ryanair is the 2nd biggest airline in the world with 90.5 million passengers transported in 2014 (Ishak, Low-cost & Leisure Traffic, 2015).

Even though after 1993 international air services within Europe were mostly deregulated after the so called Third Package of liberalisation of the sky, until 1999 the impact of low cost airlines in Europe was still very limited. After that year, the low cost sector grew intensely, driven by the two main low cost carriers in Europe, Ryanair and EasyJet, and also by other new airlines that were entering in the market (Doganis,