Ryanair Pricing Strategy

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Research topic :
Why the emergence of Ryanair’s low-cost airline was so successful?
The emergence of an indigenous airline as Europe’s most profitable is remarkable. How Ryanair changed their pricing strategies to avail of a whole new market of people bi-passed by the premium strategies previously used, began to transform the industry.
Ryanair was founded by Tony Ryan , Christopher Ryan and Liam Lonergan in 1985.Tony Ryan had previously worked for Aer Lingus who had gained a monopoly within Ireland’s airline industry. Ryanair were keen to break this monopoly, aswell as the duopoly of flights to and from Ireland and Britain held by Aer lingus and British Airways and soon introduced a 15 seater embraerer bandeirante turboprop from Waterford to
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The pricing strategy aims to stimulate demand among “fare-conscious leisure and business travellers” (iii). Fares unlike other airlines were based on demand for the particular flight, through reference to the period and date of departure. Evidence of this is clear in the price range of 0.99 to 199.99 euro price of Dublin to Stansted tickets.O’Learys policy of “cheap fares are better than 50 empty seats” had clear effects, by 1997, in the Ireland-UK market, Ryanair overtook Aer Lingus as the number one carrier on flights between the Republic of Ireland and the UK with 4 million passengers and a 37 per cent market share. By 2002, it had hit a record high in a turnover of 382,294 and a market share of 34.6% within the low-cost…show more content…
In research carried out by NCB stockbrokers, 20 million of the 24.5 million passengers travel through secondary airports while using Ryanair. The reason for Ryanairs preference to use secondary airports is the quick turnaround of an estimated 25 minute compared to the 60 minute turnaround in major European airports, which earns Ryanair an extra 4.4 million in revenue each year. The use of uncongested secondary airports aided Ryanair to achieved better punctuality, fewer lost bags and fewer cancelations than any of its European competitors according to the association of European airlines own published statistics. Also critically a fraction of landing and handling fees on these secondary airports are minimal compared to their major counterparts. Ryanair hard line negotiating has even been known to conjour up free marketing throughout these

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