Definition of pricing strategies is the element of a firm’s decision-making concerned with the setting of process that will attract the target market and allow profit objectives to be met.
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passengers’ airline through continued improvements and expanded offerings of its low-fares services. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies. A good pricing strategies had help Ryanair to achieve the objective and aims.
Ryanair’s low fares are designed to stimulate demand, particularly from fare-conscious leisure and business travelers who might otherwise have used alternative forms of transportation or would not have traveled at all. Ryanair sells seats on a one-way basis, thus eliminating minimum stay requirements from all travel on Ryanair scheduled services, regardless of fare. Ryanair sets fares on the basis of the demand for particular flights and by reference to the period remaining to the date of departure of the flight with higher fares charges on flights with higher levels of demand for bookings made nearer to the date of departure.
Ryanair’s tight cost control was the backbone of its low-price strategy. As a result of this cost focus, Ryanair had by far the lowest costs in Europe, about 40% lower than its closest competitors. One of the elements of Ryanair’s cost-control strategy is the use of secondary airports. Ryanair typically did not fly to the major “hub” airports in Europe but instead to secondary airports which were often located some distance away from major city centers. Secondary airport which located in economically depressed areas, Ryanair bargained hard for low fees. Rapid turnaround is also one of an element of its lost cost-strategy. Ryanair