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Ryanair - PowerPoint Presentation

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Uploaded On 2017-04-13

Ryanair - PPT Presentation

Team Lakers David Mangold Xiang Zhang Tiffany Lau Emily Nguyen Assessment of Ryanair Launch strategy is profitable Can still make money at a fare of 98 Irish pounds Response Expect no retaliation ID: 537061

cost profit accommodation retaliation profit cost retaliation accommodation irish accommodate ryanair pounds fare loss customers original retaliate

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Presentation Transcript

Slide1

RyanairTeam Lakers

David

Mangold

Xiang Zhang

Tiffany Lau

Emily NguyenSlide2

Assessment of Ryanair

Launch strategy is profitable

Can still make money at a fare of 98 Irish poundsSlide3

ResponseExpect no retaliation

Most small airlines failed historically

1

Price war would be impractical

Cost of retaliation > cost of

accommodation

1

Page 2 of “Dogfight over Europe:

Ryanair

”Slide4

Under accommodation, assume a loss of 10% of customers

Under retaliation, price is set 1 Irish pound below

Ryanair’s

fare

Indifference point occurs when there is a loss of about 42% of customersSlide5

Cost to retaliate = original profit-retaliation profit

=11.4 – (-58.1)

=69.5

Cost to accommodate = original profit-accommodation profit

=11.4 – (-5.25)

=16.65

Cost to retaliate is 52.85 Irish pounds more than to accommodate