Ryanair Entry into Ukraine: To Fly or to Comply

Case Solution

W. Glenn Rowe, Sergii Nevmerzhytskyi
Ivey Publishing ()

Ryanair DAC (Ryanair), based in Ireland, was the largest European low-cost airline in Europe, with around 120 million customers in 34 countries in 2016-2017. The airline was considering entering new markets as its growth in existing markets had stabilized. The untapped Ukrainian market presented a huge growth opportunity for Ryanair, as the country recently signed a free trade agreement with the European Union (EU) and was on the verge of adopting a visa-free regime that would increase travel between Ukraine and the EU. However, in July 2017, Kiev Boryspil International Airport (KBP) returned a jointly signed service agreement that retained several important terms and violated previous oral agreements with Ryanair. KBP did not want to offer a preferential rate for Ryanair flights to London as this would conflict with existing routes. It also insisted on resolving disputes in Ukrainian courts rather than British courts, as Ryanair preferred. When the airline took on KBP, Ryanair CEO Michael O’Leary had to decide what to do to enter the Ukrainian market: what options and entry times were available? How should Ryanair proceed?

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