All three have a website on the Internet and accept booking online. EasyJet and Ryanair have put low prices over customer convenience, while British Airways continues to put service above price.
In 2001, the attacks on the World Trade Center and Pentagon reverberated throughout the world, especially with airlines because commercial aircraft were used in the attack. British Airways and other major airlines announced massive job cuts while the low-cost airlines surprisingly reported increased profits. Why would a company like easyJet outperform the giant British Airways Two possible reasons were development of deregulation and an open skies policy put into place which allowed low-cost airlines the freedom to compete with low 'no frills' prices (Discount airlines 2006). The idea was to eliminate unnecessary costs with customers paying much lower prices for tickets while giving up certain creature comforts (Welcome to Companion Website, 2001). The major reason for the success of low-cost airlines, however, was instituting marketing through the Internet, offering online booking for the first time.
By 2002 Ryanair and easyJet had operating margins far above traditional airlines, including 45% more than British Airways. In the United States 270m people were utilizing 1000 low-fare jets with another couple of hundred on order. In Europe 410m shared 400 low-fare jets (Binggeli & Pompeo). While other low-fare airlines came and went, Ryanair and easyJet continued their popularity. By 2004, however, traditional carriers such as BA began to catch up to budget airlines. Intense competition and rising fuel prices caused plummeting share price at easyJet in May, and in an online analysis of the airline industry, it was found there was an increase in visitors to online sites for budget airlines, but traditional airlines showed a higher visitor rate (Cahill 2004), perhaps an indication of the growing connection between customers and business. In 2006, BA not only continues to be the leading international airline in the traditional market, it is surpassing the no-frills market with discounted prices and special deals through its web site. Customer satisfaction is a factor that leads to success in the current marketplace, and the airline that understands this will grow in popularity.
Pros and Cons of Budget Airlines
In the low-cost budget airline business, easyJet and Ryanair continue to be the largest companies in the European low-cost market. These pioneers were the first to utilise the Internet for online booking. They maximized assets by decreasing turn-around time at airports and ending free on-board catering. Ticketless travel and intensive use of information technology (IT) increased visibility (easyJet Case Study 2006). However, the major hubs that serve these airlines are Stanstet, Luton and Gatwick, not the most convenient airports. Wizzair and SkyEurope are new airlines in Central Europe flying into these hubs and are in competition with the low-cost British airlines. One