Preliminary communication

STRATEGIC PRICING PRACTICES: RYANAIR EXAMPLE

Hilal Numanoğlu orcid.org/0000-0002-8789-7396 ; Zagreb School of Economics and Management Marketing MBA Program, Zagreb

Abstract

This paper aims to evaluate the profitability of Ryanair, a leading low-cost carrier in the European airline industry, while analyzing its value-based strategic pricing approaches. Ryanair, a “no-frills” airline company that was established in Ireland in 1984, still operates as one of the most important market players in Europe. Ryanair’s “lowest fare/lowest cost” model attracted a high number of customers in years. However, Ryanair’s success to achieve the profitability goal lays beneath linking price with value, by charging passengers in accordance with the value they receive. Besides, unbundling the passenger air travel elements and charging those separately increased Ryanair’s profits tremendously and the company gained a substantial market share. So, the success of Ryanair in the highly competitive airline industry is correlated with the effective implementation and control of value-based strategic pricing. Thus, Ryanair’s strategic pricing attempts that boosted the profits and expanded its market share would be dealt through the paper. Ryanair’s value communication with the customers will be explained. A brief comparison with Ryanair’s competitors will be provided and the profitability in the low-cost airline industry would be discussed in light of recent data.

Keywords

Ryanair; value-based strategic pricing; low-cost carriers

Hrčak ID:

236763

URI

https://hrcak.srce.hr/236763

Publication date:

10.4.2020.

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