Ryanair
A European low-cost airline that sells a base fare and charges for extras.
Where Ryanair comes up1 book
From Ryanair case, unbundling chapter
What was said about Ryanair
1Ryanair's low base fare and paid extras
Ryanair advertised a low fare and charged separately for extras. It paired fares like £9.99 with a £6 admin fee, a £10 seat reservation and a £15 bag fee. The average customer ended up paying four times the base fare.
Net profit rose from €15 million in 1995 to €522 million in 2014.
Unbundle when buyers fixate on the headline price over add-ons. Travelers are about two times more price sensitive to the base fare than to surcharges. A low base price with paid extras can therefore earn more than an all-inclusive price.
The book's framing: "Sometimes the best bundling strategy is to unbundle."
Monetizing Innovation: How Smart Companies Design the Product Around the Price
It paired a £9.99 fare with a £6 admin fee, £10 seat reservation and £15 bag fee, so the average customer paid four times the fare. Net profit rose from €15 million in 1995 to €522 million in 2014.
Ryanair advertised a low fare and charged separately for extras. It paired fares like £9.99 with a £6 admin fee, a £10 seat reservation and a £15 bag fee. The average customer ended up paying four times the base fare.
Net profit rose from €15 million in 1995 to €522 million in 2014.
Unbundle when buyers fixate on the headline price over add-ons. Travelers are about two times more price sensitive to the base fare than to surcharges. A low base price with paid extras can therefore earn more than an all-inclusive price.
The book's framing: "Sometimes the best bundling strategy is to unbundle."
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