Essay About Aer Lingus Pros And Weak Position                           Prosaer Lingus

Ryanair and Aer Lingus Pros and Cons
StrategyBAAer Lingus    Accommodation                     PROSThey won’t lose a   significant market share. Ryanair can have a maximum of 64240 passengers, which is a small percentage of the total market share.BA usually targets Business class customers and leisure travelers who are used to high prices. So their chances of deviating to Ryanair are less.              CONSBA faces a chance to lose its future market share if Ryanair expands in future.British Airways is going for privatization in near future. It’s position can be threated in eyes of investor if seen in a weak position                           PROSAer Lingus has a diverse pool of activities ranging from computer reservation system, computer consulting, hotel business etc. So it would not like to unnecessarily focus on losing a small market share.  They won’t lose a  significant market share. Ryanair can have a maximum of 64240 passengers, which is a small percentage of the total market share.                      CONSTony Ryan was an employee of Aer Lingus. If his sons’ company becomes successful in its operation, Aer Lingus would be against it.The Dublin-London route is a profit-making route for Aer Lingus. It would not like to lose out its profits to a small company.RetaliationPROSBritish Airways would be able to decimate its competition even before it begins.Customers won’t have any value addition in using Ryanair.                    CONSIt would lead to huge losses for British Airways. Since BA is going to get privatized, this approach does not seem viable.This can lead to a price war. Ryanair can further reduce its prices. This would lead to more losses.PROSAer Lingus would be able to decimate its competition even before it begins.Customers won’t have any value addition in using Ryanair.                                         CONSThis can lead to a price war. Ryanair can further reduce its prices. This would lead to more losses.Aer Lingus faced tens of millions of pounds of investment to replace aging jets in its fleets. It cannot afford to burn money by starting a price war.  Selective Retaliation PROSIf a new line of services is offered, the existing line won’t get affected.(Example- Something like Jetlite)Both losses and market-share loss can be taken care of.Specific sections of the society(Ex- Students) can be targeted.              CONSIt would still give an opportunity to Ryanair to build a base.This would require a lot of marketing and implementation expenses.                        PROSIf a new line of services is offered, the existing line won’t get affected.(Example- Something like Jetlite)Both losses and market-share loss can be taken care of.Specific sections of the society(Ex- Students) can be targeted.              CONSIt would still give an opportunity to Ryanair to build a base.This would require a lot of marketing and implementation expenses.2. On the basis if the above three options, we would suggest that British Airways and Aer Lingus go with the selective retaliation approach.Ryanair’s strategy will work because they are having a very low operation cost. The occupancy Ryanair is targeting is 100% and with a capacity of 44 seats this should be a easy task. Using effective pricing techniques, Ryanair can also attract customers who are using ferries. In case of a selective price war, Ryanair still hold the edge due to its very low operating costs.