Data Response: “Cheap Flights – Europe”

ryanair-Irish-budget-airline

a) In the article, it suggested that European air travel’s price are getting elastic due to the global economic recession. It has introduced British Airway, which aimed for high price and inelastic part of the service to gain profit. However, as the demand for high price seats went down, they tried switching their plans to aim for low price and elastic part of the service. So this suggests that European air travel price are getting elastic.

b) Ryanair used to aim for low price seats in order to gain a lot of travelers in their aircraft. The low price seats are usually very elastic. Therefore, if Ryanair lowers the price by just a little, there are tremendous increase in amount of demand. As the global economy went through recession, lots of travelers wanted low price seats for airlines. So the Ryanair has become the most profitable airline by the tremendous increase in demand for low price seats.

c) Ryanair was able to offer seats on some flights for under 10 pounds because of their unique plan. Ryanair had an unique plan in minimizing costs included in a flight service. The airline provider has only one kind of aircraft, the Boeing 737, that minimizes the service costs. It only landed on minor cities, where it cost less than in major cities. Also, they can fly two times than the ordinary airline because their airline gets their aircrafts back into the sky only 20-25 minutes after it has landed. Also, as they covered the cost for the flight, they lower the price for an empty seat right before take off. This has really helped lower the price for seats.

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1 Response so far »

  1. 1

    Atkins said,

    British Air are in deep trouble. If they don’t lower their ticket price, I’m afraid that they’ll go bankrupt in few months 😦


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