Tuesday, July 29, 2008

Ryanair: "Higher oil prices won't end low fare air travel"

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In my most recent European text, I used Ryanair as an example of successful targeting of a single big segment: price-sensitive travelers. This week, Ryanair's CEO pledged to keep fares low, despite sky-high fuel prices that have already driven some carriers out of business (and have hurt Ryanair's profits).

As this BBC news story indicates, some analysts and industry experts question the wisdom of waiting to raise prices. As a consumer, I value low fares. But I also value competition and decent service. Airlines need some profit to reinvest in equipment, personnel, and services. Ryanair, will artificially low air fares allow you to serve your customers properly in the long run?

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