Factors of Competition between

Ryanair and Deutsche Lufthansa

AG airlines
Table of Contents

Abstract......................................................................................................................................2
Introduction................................................................................................................................2
Aspects of competition between Ryanair and Lufthansa...........................................................2
Pricing.....................................................................................................................................2
Strategy...................................................................................................................................3
Level of service.......................................................................................................................3
Advertisement and promotion................................................................................................4
Conclusion..................................................................................................................................4
References..................................................................................................................................5

1
Abstract

European airlines are renowned for leading the low-cost sector and offering distinctive
products. While Lufthansa has long been acknowledged as one of the highest quality
airplanes in the business, Ryanair controls the European market of price-conscious
passengers. While it is challenging to say which approach is "better," this report seeks to
understand how both businesses have achieved such remarkable success in the highly
competitive commuter airline sector with their various approaches.

Introduction

Two businesses standout out on the international economy in the intensely competitive and
equity intensive airline sector: Ryanair Ltd. and Deutsche Lufthansa AG. When it comes to
how their products and services are delivered, these two businesses really couldn't be more at
odds. Ryanair only offers the minimal necessities (Barrett, 2017), whereas Lufthansa goes
above and above to care for its passengers.

A company using a cost leadership approach gains share of the market by luring customers
that care about price by offering the lowest prices available. However, the competitive
pricing organization must also run at a cheaper price than its rivals in terms of providing the
cheapest pricing while still being profitable (Thelle et al., 2018). A corporation that wants to
participate successfully must differentiate its product(s) through the use of a competitive
edge. In addition to its lengthy history, but principally due to its stellar reputation for
excellence and performance, Lufthansa has attained this accolade (Klingenberg, 2017).

Aspects of competition between Ryanair and Lufthansa

Pricing
Ryanair: Ryanair markets as its own low-cost carrier that travels to more than 200
destinations across Europe. Their ticket prices range from lowest to premium, with 70% of
tickets being sold at the cheapest cost (Barrett, 2017). Additionally, they charge additional

2
fees to travellers who don't purchase their tickets in advance. Ryan Air customers who fail to
sign in online will be charged an excess cost.

Lufthansa: Customers are charged by Lufthansa based on the category of travel they select.
There are 4 classes on Lufthansa: Economy, Premium Economy, Business and First class.
Because they serve the mid class market, economy and premium economy flights are reduced
to a greater extent. Here, pricing is used as people shop about for the best deal by comparing
prices with multiple carriers. All high-end and trip abroad clients fly in the Business and First
classes, hence higher charges are levied for these classes.

Strategy
Ryanair: Ryanair has a low-cost approach to leadership, offering its consumers inexpensive
pricing as a result. The goal of Ryanair is to provide the cheapest price in the market, and it
does so in a number of different methods (Lieshout et al., 2016). The two most obvious
strategies Ryanair use to accomplish its goals are

 Hidden fees
 Limited customer service

Lufthansa: Lufthansa Group strategy relies on four pillars

 Boost business value

 Constantly raise client satisfaction
 Manage a business that is both economically and environmentally sound
 Strengthen dominant market position by actively influencing the aviation sector

This comprehensive approach enables Lufthansa to concentrate on a "triple bottom line"

approach, which serves as a manual for businesses to satisfy economical, ethical, and
environment criteria or objectives.

Level of service
Ryanair: Ryanair's business culture complements its business plan. Due to operational
efficiency, it is capable to provide clients with the most affordable prices. This extends to the
company's headquarters, as staff members compete for resources in an out-of-date
workspace. Despite closely following Southwest Airlines' lead, Ryanair did not adopt the
corporate culture of the prosperous American low-cost carrier (Bubalo et al., 2015).

3
Lufthansa: At Lufthansa, there is a strong sense of teamwork. Because they appreciate what
they do, employees provide outstanding customer service. Some current workers of
Lufthansa contribute to a journal on the company's website where they discuss their views
operating there and all the prospects it can offer, and all seem to be favourable.

Advertisement and promotion

Ryanair: Ryanair doesn't engage in overt advertising. To advertise their business, they
employ low-tech methods including newspapers, radio, and tv. Customers are seen in their
marketing having fun and feeling good after using their products. They emphasise their image
as a straightforward, joyful airline that welcomes families. Their slogan, "Low fares made
simple," serves as a means of self-promotion for them as a low-cost carrier (Klingenberg,
2017).

Lufthansa: In its TV advertisements, Lufthansa highlights the exceptional customer service

it provides. Additionally, they provide consumers with special codes so that they can save
money on their journey. To keep and involve their devoted clients, they provide loyalty
programmes. Additionally, Lufthansa uses digital and social promotion. Additionally, they
interact with clients on Twitter, responding to any questions (Bubalo et al., 2015).

Conclusion

This study comes to realize that there is no optimum airline approach and that sticking
completely to one plan is the best course of action for an airline. Every organization must
adhere to a policy in the fiercely competitive commercial airline sector if they want to excel
at what they do and stand out from the crowd. Since Ryanair is known as the world's best
low-cost airline, customers understand what to expect. According to competition study,
Ryanair compensates for its lack of quality and service with low costs and on-time
departures. Similarly, Lufthansa is regarded as a market innovator in terms of quality and
customer service on a global scale. Both airlines have had huge results thanks to their
commitment to securing a competitive edge.

4
References

Barrett, S. D. (2017). The sustainability of the Ryanair model. In Strategic Management in

Aviation (pp. 371-380). Routledge.

Bubalo, B., & Gaggero, A. A. (2015). Low-cost carrier competition and airline service
quality in Europe. Transport Policy, 43, 23-31.

Klingenberg, C. (2017). The future of continental traffic program: how Lufthansa is

countering competition from no-frills airlines. In Strategie Management in the Aviation
Industry (pp. 165-184). Routledge.

Lieshout, R., Malighetti, P., Redondi, R., & Burghouwt, G. (2016). The competitive
landscape of air transport in Europe. Journal of Transport Geography, 50, 68-82.

Thelle, M. H., & la Cour Sonne, M. (2018). Airport competition in Europe. Journal of Air
Transport Management, 67, 232-240.