SWOT Analysis and PESTEL Analysis of Ryanair

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SWOT Analysis and PESTEL Analysis of Ryanair

Introduction

Ryanair is Europe’s biggest low-admissions, essential transporter; the association began in 1985 as a standard traveller aircraft however re-propelled itself in 1990 as a low-passage bearer, mimicking itself on the Texas based Southwest Airline’s plan of action. The organization right now works its business more than 27 nations and conveys in excess of 66 million clients every year.

This report attempts a point-by-point investigation of Ryanair. It will take a gander at Ryanair’s present methodology and how that technique is overseen, including an assessment of the assets and abilities which permit Ryanair to increase an upper hand on its rivals. It looks to distinguish how its centre business’ activities and capacities influence the aircraft’s client relations and initiatives with respect to its general system. Ryanair is Europe’s biggest carrier and the world’s fifth aircraft within excess of 2000 everyday flights. The customer have become more consistency due prices of Ryanair and it has reached 1 billion clients in 2017 . Because of its minimal effort plan of action, Ryanair has had a consistent development with its income developing year on year.

The majority of Ryanair success came from Michael OLeary and generated a lot profit for the company his vision would be cheap and quicker service and dont spend too much money on big commercial but instead use newspaper as commercials. In 2008, Ryanair had carried about 50,9 million passengers in about 25 European states with a total of 163 Boeing 737-800 planes, after 1991, Michael O’Leary became the Chief Executive Officer of the airline.

SWOT analysis of Ryanair

Strengths of Ryanair

Ryanair transports more nearly 130 million travellers every year on well over 2,000 scheduled flights. As of December 2018, it could travel to 215 destinations in 37 countries. In 2017, it was the first European airline to fly over 1 billion passengers (Ryanair, 2018).

Ryanair is a leader of the low-cost airline market model and has gained a great deal of industry experience over the years. The fact that it is a market leader in Europe helps it to gain a major cost benefit over the other EU airlines. However, in 2018, it earned the 11th best low-cost carrier in the world to be voted for by travellers. It also ranked fourth best low-cost carrier in Europe in 2018

The presence and estimated age of the Ryanair fleet is indeed remarkable. Ryanair is the biggest carrier in Europe for the amount of passengers transported. It only uses Boeing 737-800 aircraft and the estimated age of the aircraft is 5.5 years. This has more than 300 aircraft in service as of December 2018 and plans to expand the scale of the fleet to 585 by 2024. For such a large and efficient fleet in service with more likely to be introduced to the roster, Ryanair will and will be willing to significantly reduce its prices and accommodate more customers. In reality, it aims to transport 200 million passengers a year by 2014.

In May 2018, Ryanair announced a profit increase of 10 percent. On 31 March 2017, after vat, the figure for the year ended was ¬1,31 billion, and on 31 March 2018, ¬1.45 billion. A 9% rise in traffic and a 3% decrease in average ticket for the period 31 March 2016 to 31 March 2018 was also announced by the airline.

Weaknesses of Ryanair

Ryanair’s weakness in the management of ties with employees was demonstrated in the summer of 2018 when pilots and the cabin crew forced him to cancel flights to some of the most popular tourist destinations. Their pay and working conditions were met. In fact, the airline will take the appropriate measures to avoid the potential occurrence of similar disruptions.

Although the decline was primarily attributed to strikes and flight cancellations, it’s also true that for many years the airline has been poorly performed in a variety of polls and surveys.

Opportunities for Ryanair

In countries like the UK, Germany, Italy and Spain, Ryanair has a good presence. Such markets certainly give the airline additional growth prospects. This is also worth investigating the development of new roads. Additionally, in summer 2018 Ryanair launched more than 200 new routes. The latest routes include Jordan, Turkey and Ukraine, but are not limited to the markets. Ryanair also explores possibilities of diversifying into other parts of the aviation market in Europe and beyond, in addition to launching new itineraries. These plans that Ryanair planned could be affected with recent Brexit results but there few agreements that would be made throughout the process of Brexit.

During the last year, Ryanair’s profits fell by 21%, to ¬243 million, owing to reduced prices and increased expense of fuel and workers.In the three months to June, the largest budget carrier in Europe described the United Kingdom as ‘one of the two most vulnerable markets, with Brexit’s problems negating customer confidence and expenditure.’

Ryanair’s Threats

External events.

Air travel is prone to global activities and natural disasters, such as erosion and volcanic ash disturbance irrespective of carriers. This exposure to airlines with a more regional network may well be mitigated by a fairly focused geographic exposure of Ryanair. When Ryanair was involved in a major crash, the public perception may be negatively impacting its past record when it comes to fatal accidents.

Loss of competitor capacity discipline.

Ryanair is much more cautious and reasonable in its markets than was always the case in the past in terms of capacity expansion. Any lack of this discipline between competitors could jeopardise Ryanair’s friendly yield climate.

Air travel taxes.

Higher air travel taxes are raising demand due to price elasticity. These taxes usually account for more than one long-distance ticket than a short-distance ticket, rendering it vulnerable to the recent rises in air taxes in countries such as the United Kingdom. Ryanair therefore notes its access to the UK market would be reduced

Fuel price and currency movements.

The cost of jet fuel is highly unpredictable, representing about 45% of Ryanair’s bill. Moreover, Ryanair has a high proportion of costs but there are no revenues in US dollars which make it vulnerable to a dollar-to-pot and euro strengthening. Ryanair routinely controls its fuel price and monetary exposures in order to minimise these threats.

Brexit

Ryanair also formed a new carrier, Ryanair UK, to ensure the continuity of flights to the UK following Brexit. The new arm of the Ultra-Low-Cost air operator also obtained a Civil Aviation Authority (CAA) certificate of air travel from the UK to ensure that Ryanair is eligible to carry on operating flights within the UK and to destinations within the no deal and UK would leave EU.

Later on, Ryanair made it known that he had doubts as to whether there might be a ‘no deal Brexit’ for the airline sector. If United Kingdom enters the EU without an arrangement, they would steal be operating but extra chargers and customers would have difficulty due the passport situation.

Covid-19

Now Ryanair estimates its seating ability to be reduced by 80 percent in April and May and cannot preclude complete grounding of the aircraft. To order to reduce business expenses and boost cash flows, Ryanair is moving urgently. It will require suspending budget deficits, delaying both capex and liquidity buybacks, restricting recruiting and capital costs, and introducing a range of opportunities for voluntary leaving, immediate termination of contracts for jobs and massive cuts in working hours and wages. In this unprecedented and unforgettable case of Covid-19, we collaborate alongside our citizens and business groups from all over EU countries.

PESTEL analysis of Ryanair

Political environment

The United Kingdom government pays the highest commercial air transport taxes worldwide on both short- and long-distance UK-specific passengers. Price increases from £75 to £78 for long haul passengers and from £13 for short-haul from 2018 . This tax has more than tripled in the last 24 years, and will continue to rise. It may frighten visitors and trading partners preparing to visit Britain. This might also affect airlines, such as Ryanair, with short-haul travellers preferring buses and trains.

UK voted to leave the EU in June 2016, resulting in economic and political uncertainties. If there is some form of agreement by 2019 , Britain leaving the EU could disrupt UK flights. The luxury of UK airlines like Ryanair, operating many routes across EU countries, is constrained by growth and income generation. However, by applying for a British operating licence , Ryanair has prepared itself.

This may also contribute to the loss of ownership and market shares of Airlines such as Ryanair because 50% or capital shares of airlines must be EU owned to operate freely between EU countries. In the event that the UK is leaving the European Union, Ryanair shall have at least 20% of its shares listed as international. their stake unless it convinces pension funds to shift from holding shares in UK to EU.

Economic environment

The UK airline industry has been adversely affected by the weak pound and the economic instability since Brexit. The poor package has driven consumer spending down to a decline in leisure travel costs.

Social environment

But the gain continued to be low cost carriers such as Ryanair and Easy Flight. Given the rising cost of living, British citizens still want to fly abroad for holidays that mean that Ryanair, Easy Jet, and Norwegian low-cost flights are available.

Britain’s aging population also poses a threat to aviation. Claims millennials travel more often than the older generation when it comes to holiday travel. In 2016, five or more holidays at least 25 percent aged 16-24 and 27 percent aged 25-34 made them a significant airline population. Nevertheless, between 2017 and 2022 the population of the 20 to 34 people is expected to decrease by 1 percent, which could have an effect on aviation companies.

Domestic tourism could be enhanced by uncertainties such as the failure of Monarch airlines and the cancellation by Ryanair in 2017, because cautious clients opt for residence and thus impact their airline company.

Technological environment

The Internet changes the flight experience entirely, from biometrics to virtual reality. Many airlines have adapted to the skills of Alexa that WPP has created, which allow customers to know the films are on their flight with details on actors and ratings and travel advice. A biometric IFE Panasonic update has also been developed and enables secure payment permits on board and other facilities such as a customised programming catalogue. Both services have been incorporated into their airlines by.

Problems and solutions

The public relations policy of Ryanair will be strengthened. The research shows that the Ryanair is highly competitive on the market and can be related directly to the operator’s competitive cycle. It does, however, not only sustain the degree of customer service and does not achieve adequate efficiency. Through implementing many initiatives and steps, Ryanair Management will improve the efficiency of integrated marketing communications. The marketing plan would incorporate all the elements of marketing communication mix so that the company can deliver its target customer segment in an effective and efficient way.

The organisation will develop and change its system of web-based tests. This is because the buying of electronic tickets raises dramatically the tickets for officers. Management is recommended that it follow a viable approach to the development of its website and to use it to the full. The website includes creative functions and functionality. The website will provide the customers with detailed information. Therefore, the safe and secure electronic transaction system.

The management of Ryanair should introduce new programmes and initiatives that demonstrate its greener image. A new study notes that the government and non-governmental organisations are growing pressure on airlines and transportation firms to decrease their emissions due to the ecological harm done to the atmosphere by airlines. Taking account of the current Ryanair business plan, it may cause serious harm in future to Ryanair to ignore this issue of environmental damages. The management of Ryanair is focused on sustainability initiatives, and the procurement of new aircraft is part of that.

It is important to boost the brand image of Ryanair. The strategy of company by offering affordable prices, rising marketing share and income has influenced the reputation of the brand. The idea of cheapness creates a new understanding of service quality and consumers discourage bad service at low prices.

A big factor for the airline is the confusion with Brexit, because if Britain exits the EU it would be inevitable that Ryanair will be badly affected unless action is taken. Another issue that may impact the business’ profits is the extraordinarily high UK government taxes on a commercial flight.

Report

During the process of making this report theres a lot research to be done whether online blog, article or a newspaper but each of these sources have a different opinion therefore collecting a lot of information and reading. Has helped me to understand Ryanair strategy they have always committed to their original plan which would-be low-cost airline. Because its a low-cost airline which it does not have the luxury airline, but it would have an average airline service.

Ryanair low-cost has attracted a lot of customer and it has generated quite a lot money because it covers majority of Europe and airports are like the second to best airports there are. Ryanair are the most consistent due the low-fare service has over 1 billion clients and over 2000 daily flights For example, London main airport is Heathrow, but Ryanair uses Stansted due its cheaper functioning. Ryanair has a great website function where you can check yourself and make it easier when you get to the airport and avoid all the queueing.

With the recent events of Brexit saga and Covid-19 both of these events have huge impact of the profit margin due fuel cost gone up and airport service. The Brexit meant a bad deal for Ryanair as UK is the biggest market for Ryanair but Ryanair and plenty of other airliners manage to reach agreed with EU over the Open Skies which means planes can land in the UK. Ryanair have added a clause even if its no deal they would cancel customers flights. Covid-19 has even bigger impact than Brexit as the company would 80% closed due the contagions virus and no majority of Europe airports are closed. If there is no customer operating that means Ryanair would need cut cost by terminating Cabin Crew, pilot and airport staff. Ryanair would not be generating any income but loses.

References

CAPA – Centre for Aviation. 2020. Ryanair SWOT Analysis Michael O’leary’s Maniacal Focus On Being The Lowest Cost Producer. [online] Available at: [Accessed 14 April 2020].
Ft.com. 2020. Ryanair Chief Michael OLeary Pledges To Drive Out Rivals. [online] Available at: [Accessed 14 April 2020].
Haque, F., 2020. PESTLE Analysis Of RYANAIR. [online] The Strategy Watch. Available at: [Accessed 14 April 2020].
Investor.ryanair.com. 2020. Ryanair | Brexit. [online] Available at: [Accessed 14 April 2020].
Ryanair.com. 2020. [online] Available at: [Accessed 14 April 2020].
Shaw, A., 2020. PESTLE Analysis Of Airline Industry | Marketing Tutor. [online] Marketing Tutor. Available at: [Accessed 14 April 2020].
the Guardian. 2020. Ryanair | Page 2 Of 42 | Business | The Guardian. [online] Available at: [Accessed 14 April 2020].
TravelDailyNews International. 2020. Ryanair Taking Urgent Action To Respond To COVID-19. [online] Available at: [Accessed 14 April 2020].
UKEssays.com. 2020. Suggest On The Strategic Issues For Ryanair. [online] Available at: [Accessed 14 April 2020].

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