1 David Mangold Xiang Zhang Tiffany Lau Emily NguyenRyanair Team Lakers David Mangold Xiang Zhang Tiffany Lau Emily Nguyen

2 Assessment of Ryanair Launch strategy is profitableCan still make money at a fare of 98 Irish pounds

3 Response Expect no retaliationMost small airlines failed historically1 Price war would be impractical Cost of retaliation > cost of accommodation 1Page 2 of “Dogfight over Europe: Ryanair”

4 Under accommodation, assume a loss of 10% of customersUnder retaliation, price is set 1 Irish pound below Ryanair’s fare Indifference point occurs when there is a loss of about 42% of customers

5 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 Irish pounds more than to accommodate