Ryanair, headquartered in Ireland, started operations as a regional airline company in 1985, flying between Dublin and L

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Ryanair, headquartered in Ireland, started operations as aregional airline company in 1985, flying between Dublin and London.The company generated losses until the early 1990s when, after avisit to the US-based budget airline Southwest, deputy CEO MichaelO'Leary converted the company into a budget airline, supported by aEuropean deregulation of the airline industry in 1992. It wasprimarily a business model innovation. Ryanair sold air travel,just as any other airline, and they used the same type of aircraft.But their business model was completely different: they flewbetween small airports, they didn't offer transfers but onlypoint-to-point flights, they sold food in the plane instead ofoffering it for free. They also had different financialarrangements with the airports, which sometimes even subsidizedthem because of the benefits of airline traffic for regionaleconomies. The company was highly successful. In 2016, its revenuesamounted to €6.4 billion with €1.2 billion profit (after tax). Inthe same period, many traditional airlines suffered from losses ormuch lower profit levels. For instance, in 2013 the larger AirFrance-KLM suffered from a loss of €1.8 billion (on revenues ofabout €25 billion) in a single year.
(a) Discuss three (3) dimensions of innovations for the abovecase. (15 marks)
(b) Discuss three (3) advantages Ryanair can gain as afirst-mover company to use this business model in an airlineindustry. (15 marks)