A-A* (AO3/4) - Cost Leadership
Business: AQA A Level (2023 Specification), topic 2.2.4
How Does Ryanair Get Cost Leadership?
1. It buys new planes
- New planes are more fuel-efficient so Ryanair's fuel costs on each flight are lower than competitors with older planes.
2. It flies to cheaper airports
- Ryanair often flies to the second airport in a city (usually the airport further from the city centre).
- This means that Ryanair's landing fees and airport costs are lower than others.
3. Its planes take off straight away
- Some airlines' planes spend 3 hours on the ground at the airport before their next flight. Ryanair's planes take off as quickly after landing as possible.
- This means they can do more flights per day using the same number of aircraft.
4. Ryanair backloads its prices
- Ryanair has the lowest airfares on price comparison websites so it looks the cheapest.
- Then it tries to charge you to choose a seat, or to take a carry on bag, or to avoid them putting your bag in the hold.
- So it might not be that cheap!