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MARKETING MANAGEMENT

CASE ANALYSIS DOGFIGHT OVER EUROPE: RYANAIR



Submitted by: PGP H, Group 8
SN Name of Student Roll No.
1 ASHISH TOMAR 2014PGP067
2 PARESH KOTKAR 2014PGP245
3 ISHANI MITTAL 2014PGP137
4 TATSAT PRAKASH PANDEY 2011IPM112
5 PRATIBHA INDORIA 2011IPM072
6 SAHIL AGGARWAL 2014PGP318
7 DHAVAL VAIDYA 2014PGP411












Companys Background: Ryanair was an upstart Irish airline company set up by Cathal and Declan
Ryan in 1985. The airline initially operated only a single scheduled service between Waterford (south
east Ireland) and Gatwick Airport (on the outskirts of London), through a 14-seat turboprop aircraft.
The setting up of the business was greatly enabled by the million Irish pound-contribution of Mr.
Tony Ryan, the father of the Ryan brothers, who had earlier co-founded Guinness Peat Aviation, the
largest aircraft leasing company in the world. In 1986, the company announced that it would soon
commence service on the Dublin-London route.

Industry & competitors profile: The airline sector in the United Kingdom (U.K.) and Ireland
comprised mainly of two major players the British Airways in U.K. (founded in 1930s) and Aer
Lingus in Ireland (founded in 1936). Both these airlines were already operating profitable services
along the Dublin-London route which Ryanair was looking to enter.

Issue: Ryanair is looking to enter a segment in which 2 competitors are already earning well and its
only differentiator in doing so is lower air fares (I98) compared to the average I208 price charged
by them. What should be the marketing strategy of Ryanair to gain a competitive edge? Whether
Ryanair should aim to compete with established players for the existing 0.5 million passengers or
should it aim at attracting the rail and ferry users (new market) to travel through air by offering
lower costs?

Analysis:

Strengths:
The founders (Ryan brothers) have
previous experience in airline industry
Sufficient financial resources available to
offer low-cost services at I98.
Offering first rate services to customers
comparable to big airlines, despite low
priced tickets.
Past record of successfully operating a
scheduled airline between Waterford and
Gatwick Airport
Offers flexibility of timing to customers as
it offers 4 round-trips in a day
Weakness:
Permission to operate only 44 seat
turboprop aircraft.

Opportunities:
Only 0.5 million travellers utilise airways
on this route, while another 0.75million
road/sea travellers still remain to be
tapped to utilise the airways.



Threats:
Consolidated Market as Large established
players such as British Airways and Aer
Lingus were operating profitably on the
new route.
From 1983 to 1985, British Airways
customer base increased at a good rate
of 12.8% (16.3 to 18.4 mn) and tonne-km
capacity also increased, making it a
strong competition for Ryanair.

An analysis of Ryanair reveals that despite cut-throat competition on the London-Dublin route, there
lies huge opportunity for Ryanair to enter into the market. The surplus funds available with the
company is one of the biggest advantages the company holds, as it can focus on adopting a low-cost
strategy to attract customers and establish itself. Further, as mentioned in the case, Ryanair aims to
distinguish itself from the other players in the industry through providing superior customer
satisfaction and charging single fare for a ticket with no restrictions. Such a strategy will further help
Ryanair to establish a consolidated and loyal customer base.
Now even though the existing established players are running at a below par capacity utilisation of
60-70%, Ryanairs value-for-money strategy can directly compete with the existing players for these
customers. Further, the company should also focus on tapping the new market of the 0.75 million
rail and ferry users as it can project substantial value to them by saving 8 hours (9-1) of travel time in
return for just I 43 extra (I 98 - I 55).
As of now, Ryanair has a good opportunity to establish itself on the London-Dublin route. Further, if
Ryanair is able to get permission to fly larger jet aircraft on the route, it can hope to reap benefits of
large scale, which will help it to strengthen its position.
A reverse scenario could also apply, whereby privatization of British Airways (BA) around 1987 along
with its strong financial position could enable BA to reduce air fares in order to increase its
dominance in the market. This could adversely affect the growth of an upstart like Ryanair which is
struggling to find its feet in the industry.

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