Dogfight over Europe: Ryanair (A) Case
In 1986, Ryanair announced that it would begin flight service between Dublin and London. The founders of Ryanair are brothers Cathal and Declan Ryan who essentially grew up in the airline world. At this time, the company had already been operating for a year, flying between Ireland and London with their 14 seating plane. In terms of competition, these two locations did not pose a challenge. However, the Ryan brothers recognize the competitiveness and complicated industry as they attempt to enter the European aviation business world.
The European aviation business environment has been heavily impacted by the European national government. Following World War I, several private commercial airlines arose carrying the flag of their nations. These “flag carriers” and other airways gradually became owned by or subsidized by their national governments. Governments began focusing on international routes from their respective capital to colonies and other areas of national influence. World War II brought several advances in the airline industry as air travel became increasingly economical for the average individual. The war also brought the threat of American dominance in the airline industry as efficient and privately owned carriers of the United States would have captured a large portion of the international market. As time passed, European governments continued to consolidate airlines, impose further restrictions on international routes, create pooling arrangements, and strictly regulate intra-country services. European regulation began to crumble under the weight of disparate national interest as the airline industry became fragmented. The 1970’s brought trouble as the OPEC oil embargo increased the price of jet fuel and decreased demand for air travel. The deregulation of the domestic U.S. airline industry allowed for the freeing