Case Study 

Ryanair Pricing Strategy

Anchit Prakash , , ,

Introduction

Ryanair is an Irish low cost but one of the largest and busiest European airline by number of passengers carried and serves around 32 countries.

How company strategize its pricing method?

Company provides cheapest tickets online using certain pricing strategies. They have a certain target market which only needs to travel from one place to another. They do not think about the quality of services they are provided. Company created a “no frills” strategy. In this, the focus was to have low cost tickets which will eventually increase sale of tickets. This will keep the operational costs minimal. By this, the company eliminated a number of comfort services which passengers were traditionally provided.

When should a customer book flight tickets?

As the graph suggests, it is not always recommended to book air tickets weeks ago. A lot depends on the time of departure too. However, there are other factors also which affect ticket prices like seasonality, destination, offer and demand. Most of the times, a customer makes an emotional decision while booking an air ticket.

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The CEO of Ryanair himself said that ‘we increase the fares when seats are limited as to slow down the booking process.’ Generally, weekends are the busiest time for the airlines and that’s when the tickets get costly as more people tend to travel. Another factor to lookout for is the time of the flight. If the flight is at 3 am, there will be less number of passengers but if it is an 8 pm flight, a large number of the audience will be there.

A parallel relation goes between fares and length of the journey. The more the distance, the higher the fare. If the flight is from Dublin to London, then the fare will be less as compared to the flight from Dublin to Turkey. Higher distance leads to more consumption of jet fuel. Ryanair has many competitors which operate in the same route and offer the same services to attract more customers but this does not affect their pricing policies. Instead, it leads to more discounted offers to capture more market share. So it is true that low pricing tactics leads to higher profits for the company.

 

– Anchit Prakash

LinkedIn – anchit prakash (https://www.linkedin.com/nhome/)