1. David Mangold Xiang Zhang Tiffany Lau Emily Nguyen
Ryanair Team Lakers
David Mangold
Xiang Zhang
Tiffany Lau
Emily Nguyen

2. Assessment of Ryanair Launch strategy is profitable
Can still make money at a fare of 98 Irish pounds

3. Response Expect no retaliation
Most small airlines failed historically1
Price war would be impractical
Cost of retaliation > cost of accommodation
1Page 2 of “Dogfight over Europe: Ryanair”

4. Under accommodation, assume a loss of 10% of customers
Under retaliation, price is set 1 Irish pound below Ryanair’s fare
Indifference point occurs when there is a loss of about 42% of customers

5. Cost to retaliate = original profit- retaliation profit
=11.4 – (-58.1)
=69.5
Cost to accommodate = original profit- accommodation profit
=11.4 – (-5.25)
=16.65
Cost to retaliate is Irish pounds more than to accommodate