Stumped on this Business Studies question please help!! Watch

davehopps
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Ryan air £10 flights to the US:would the experience be worth the savings?

Low fare airline Ryanair has claimed it could offer return flights to the US for £10.
Passengers, however, would pay extra for everything - from meals to baggage.

Current additional charges on a return flight are £10 to choose your seat and £90 for a 20KG bag. Also on each 7 1/2 hour flight you'd want at least one hot meal and drink, plus bottles of water - so add another £24. Air passenger Duty (APD) adds £67 to the cost of every ticket from the UK to the US.

This actually makes your ticket £201 not £10, but still cheaper than the £438 on offer from British airways.

[QUESTION]
Evaluate the likely impact on the finances of a business of using a pricing strategy such as that used by Ryanair

Please some advice on this Thanks
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999tigger
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(Original post by davehopps)
Ryan air £10 flights to the US:would the experience be worth the savings?

Low fare airline Ryanair has claimed it could offer return flights to the US for £10.
Passengers, however, would pay extra for everything - from meals to baggage.

Current additional charges on a return flight are £10 to choose your seat and £90 for a 20KG bag. Also on each 7 1/2 hour flight you'd want at least one hot meal and drink, plus bottles of water - so add another £24. Air passenger Duty (APD) adds £67 to the cost of every ticket from the UK to the US.

This actually makes your ticket £201 not £10, but still cheaper than the £438 on offer from British airways.

[QUESTION]
Evaluate the likely impact on the finances of a business of using a pricing strategy such as that used by Ryanair

Please some advice on this Thanks
If I were doing it that way then I would compare it to the BA model of one lump sum. What are the advantages and disadvantages of that if you were BA.

In contrast if Ryan Air, then what is the significance to finance? Think about where it gets its money and from where.
Think about the pros and cons plus what the impact for consumers might be?
Which bits of the market would find it attractive?
Are there any variations and possible alterations to prices when times are good or bad?
What would this mean for the business?
How might consumer behaviour change revenue?
How would Ryan Air maximise profit? Examples?
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davehopps
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This has given me lots to think about thanks very much!
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