Ryannair Gaps

Success of low-cost airlines: A consumer response study of people’s perceptions of Ryanair

Introduction

Passengers’ perceptions of low cost airlines andfull service carriers:

A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines

* The concept of low cost airline

* Ryanair’s low cost business model

Literature review

* What makes the low cost business work. (Innovating low-cost business models)

The low cost business model represents “horizontalization” of supply which means that larger proportion of population have access to products or services because of its low price. (M. Vivancos 2009 return high cost low) This model changed the perception that cheap is synonymous with low value and redefines the relationship between price and value in new way. M. Vivancos 2009 return high cost low)

Another important fact that must be taken into consideration by company that using low cost business model is understanding how to quantify the value perceived by the customer and use the gained knowledge to define and optimise the price. M. Vivancos 2009 return high cost low) Value and price are two different variables but strongly related and very important factors in purchasing process.

Table below illustrate relation between these two factors and how do they influence purchase.

Low Price High | Low value and high price=No purchase | High value and high price=Possible purchase |

| Low value and low price=No purchase or possible purchase | High value and low price=Act of purchase |

| Low Value High |

Company In order to be successful need to find a way to keep value of its product high and be able to sell it for low price. In this case knowledge about customers becomes crucial. Knowing what is important and what is dispensable for the customer

Major factors that makes the low cost business successful:

Provide basic service and product

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