Please read the Ryanair article and answer the following questions:
1. Do you agree with Mr. O’Leary that air travel is largely a commodity? Why or why not?
I have to agree with Mr. O’Leary and admit that in the past few years air travel has become a commodity because of the emergence of low cost carriers and the way that these carriers have contributed to making air travel accessible to the mass market. Air t5ravel started out as an “experience” by being first offered at a high price. Then is has been transformed into a commodity with little differentiation and a low price. Now shareholders of these low-cost carriers need to come out with ideas that will build “experiences”.
2. Make a list of the creative ideas identified in the article. Which of these ideas are reasonable/unreasonable? Please provide an argument for your position.
Creative ideas and arguments:
a) Checked-in bags fees – In my opinion this is not a reasonable idea but just because I am looking at it subjectively, from the traveler’s point of view. Airlines are very strict about the size and weight of the carry-on luggage and one can’t fit much in a handbag. Plus, because of the airport safety regulations there are some restrictions to what one is allowed to take on the plane. I have ever travel with Ryanair but I traveled a lot with Wizzair (another European low-cost carrier) and I happened to pay as much for the carry-on luggage as for the ticket; so the fares are extremely high and one has to pay both ways fot the luggage.
b) Charging for toilets on board – I am not sure exactly how they want to apply this idea (does one need to pay extra for the ticket in airplane with more toilets or does one have to pay on-board when using the toilet?). Taking one of the toilets out and adding extra seats sound like a great idea but just in terms of reducing fares across the aircraft. People that fly with low-cost carriers don’t usually care if they are provided with food or more than two toilets; they just want to get to their destination on time (which rarely happens), safe and at a low cost. Customer satisfaction might be affected when one will have to pay to use the toilet on board, especially since this a necessity. So this idea is unreasonable in my opinion.
c) Putting in handrails – It is true that air travel has become a commodity because it takes one from point A to point B, but still there are some safety rules that need to be considered. Even the shortest trip takes about 45 minutes so I am sure no one would pay to stand while flying. So this too is an unreasonable idea in my opinion.
3. Do you think that the ideas identified in the article are a source of sustainable competitive advantage? Why or why not?
One can talk about sustainable competitive advantage when a company offeres some rare and valuable advantages that are nor easily copied and that can be