Is There Room for Ryan Air

Is There Room for Ryan Air?

 

As a professional consultant in the transportation marketing field, you have faced several career challenges in the past few years, especially challenges related to air transportation. The industry has increasingly struggled with escalating costs (fuel and employee benefits like pensions and health care), changing behavior among travelers, and increasing competition. You are aware that while some airlines are profitable, others operate under bankruptcy protection. Several have sought to limit their support for pension programs and to reduce labor costs. In addition, buyer behavior among travelers is a key variable with many travelers using the Internet to compare prices. With access to this online information, the pricing strategy of airlines is transparent to consumers. Further, with added concerns over security and the hassles of traveling in the age of terrorism, many consumers opt for other forms of transportation when possible.

 

Despite these industry trends, you have watched as new competitors have entered the marketplace over the last few years. While brands like Jet Blue have established a desirable brand image, they also tend to rely on outsourcing of key functions like mechanical servicing of equipment.

 

Now, Ryan Air, a low-price airline based in the

United Kingdom

, is considering whether to enter the

U.S.

market. Because you are an expert in transportation marketing, Ryan Air has asked that you prepare an assessment on its chances for success in the

U.S.

given the state of the industry and consumer behavior relative to airline travel. Your assessment and recommendations will determine what Ryan Air decides to do regarding entrance into the

U.S.

market. As such, you begin to make notes of what information and analyses you will need in order to make your recommendations. You decide that you must analyze the airline industry using the Porter's Five Forces Model paying particular attention to the success of Southwest and Jet Blue, as this will give a context for your recommendation. You know that you must first explain the value of using Porter's Model, as well as educating your audience about each specific step.  Additionally, since consumer behavior has changed in recent years both in terms of when air travel is considered as an alternative for transportation needs and how travel decisions are informed and evaluated, you decide that you must be sure that Ryan Air understands the steps in the consumer decision-making model as they relate to decisions about transportation via air. This is important so that they will have a clear understanding of the implications of each of the five steps in this model for Ryan Air's decision.