The following case report gives a knowledge into the dispatch system of the Ryanair's new Dublin – London course. Ryanair intends to begin this new course at a low cost of I£98, which is motivation to consider for the effectively existing carriers British Airways and Aer Lingus. This investigation likewise quickly reveals insight into choices accessible to both of these contenders and the results every alternative convey. Additionally, an assessment of the benefit of this new course is likewise included, in this examination.
1. Can the Ryan brothers make money at the I₤98 fare they propose? Please prepare a breakeven analysis to prove your point.
NOTE: Landing fees are fees that airports charge to airlines as part of the airport’s revenue base. A specified landing fee such as X dollars or X Irish pounds is charged to the airline for every passenger that lands or takes off on a given flight.
2. How do you expect Aer Lingus and British Airways to respond to the Ryanair entry into the Dublin/London market? Why? If you were Aer Lingus, what would you do in response to Ryanair’s proposed new route? Would you retaliate by lowering fares? To what level?
3. How costly would it be for Aer Lingus and British Airways to retaliate against Ryanair's launch rather than allow it? You need to have a cost to the combination of British Airways and Aer Lingus in Irish pounds of accommodating the Ryanair entry (not cutting their fares) and a cost of retaliating against that entry with some sort of price change.
4. What is your overall assessment of Ryanair's launch strategy? Is it going to work?