Ryanair

In April 1986, the Ryan brothers announce that Ryanair will offer service between Dublin and London, a route dominated by Aer Lingus and British Airways. AL and BA offer a range of tickets with varying restrictions and varying classes of service, but the least expensive, unrestricted round-trip fares were priced at IL208, far higher than the IL98 that Ryan Air announced. Ryanair’s strategy to launch a single far no restriction ticket at such a low price will gain market share quickly as well as possibly obtain some of the 750,000 travelers that opt to use rail and sea ferries for IL55.

| Before Ryanair | Retaliate I (Price ↓ 25%, increase load by 10%) | Retaliate II (Price ↓ 40% Load ↑20%) | Accommodate (Prices ↔ Load ↓ by 35%) | Revenue | | | | | Price | 166.5 | 124.88 | 100 | 166.5 | Price+Load | 166.5 | 137.36 | 120 | 108.23 | Operating Expenses | | | | | Staff | 35.7 | 35.7 | 35.7 | 35.7 | Depreciation & Amortization | 8.6 | 8.6 | 8.6 | 8.6 | Fuel & Oil | 31.8 | 31.8 | 31.8 | 31.8 | Engineering & other aircraft costs | 9.8 | 9.8 | 9.8 | 9.8 | Selling | 18 | 18 | 18 | 18 | Aircraft Operating Leases | 3.4 | 3.4 | 3.4 | 3.4 | Landing Fees | 11.7 | 11.7 | 11.7 | 11.7 | Handling charges, catering & other | 16.6 | 16.6 | 16.6 | 16.6 | Accommodation, Equipment | 19.5 | 19.5 | 19.5 | 19.5 | Subtotal | 155.1 | 155.10 | 155.10 | 155.10 | Operating Profit | 11.4 | -17.74 | -35.10 | -46.88 | | | | | | * Assume Operating Expenses stay the same | |

| Aer Lingus and British Airways | Ryan Air w/ no increase in load | Ryan air w/ increase of 20% | | Revenue | | | | | Price | 166.5 | 98.00 | 98 | | Price+Load | 166.5 | 98.00 | 117.6 | | Operating Expenses | | | | | Staff | 35.7 | 21.01 | 21.01 | | Depreciation & Amortization | 8.6 | 5.06 | 5.06 | | Fuel & Oil | 31.8 | 25.44 | 25.44 | | Engineering & other aircraft costs | 9.8 | 5.77 | 5.77 | |