Ryanair, headquartered in Ireland, started operations as a regional airline company in 1985, flying between Dublin and London. The company generated losses until the early 1990s when, after a visit to the US-based budget airline Southwest, deputy CEO Michael O'Leary converted the company into a budget airline, supported by a European deregulation of the airline industry in 1992. It was primarily 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 flew between small airports, they didn't offer transfers but only point-to-point flights, they sold food in the plane instead of offering it for free. They also had different financial arrangements with the airports, which sometimes even subsidized them because of the benefits of airline traffic for regional economies. The company was highly successful. In 2016, its revenues amounted to €6.4 billion with €1.2 billion profit (after tax). In the same period, many traditional airlines suffered from losses or much lower profit levels. For instance, in 2013 the larger Air France-KLM suffered from a loss of €1.8 billion (on revenues of about €25 billion) in a single year.

(a) Discuss three (3) dimensions of innovations for the above case.

(b) Discuss three (3) advantages Ryanair can gain as a first-mover company to use this business model in an airline industry.