Ryanair is a Irish low-cost airline company headquartered in Dublin. It was founded in 1984 and has since become the largest airline in Europe by passenger numbers. The company operates a fleet of over 500 Boeing 737 aircraft and serves more than 1,800 routes across 40 countries. Ryanair is known for its low fares and no-frills approach to air travel, which has made it popular with budget-conscious travelers.
In this essay, we will discuss the PESTEL analysis of Ryanair. PESTEL is a framework used to analyze the external environment in which a company operates. It stands for Political, Economic, Sociocultural, Technological, Environmental, and Legal factors.
One of the major political factors that affects Ryanair is government regulations on the aviation industry. These regulations cover a wide range of issues, including safety, security, and environmental protection. Ryanair has faced criticism in the past for its environmental impact, as its low-cost model relies on frequent flights with high passenger capacity. The company has taken steps to reduce its carbon emissions, including investing in more fuel-efficient aircraft and offsetting its carbon emissions through carbon credits.
The global economic downturn has had a significant impact on the aviation industry, and Ryanair is no exception. The company has had to adapt to changing economic conditions by offering lower fares and cutting costs wherever possible. Ryanair has also benefited from the low cost of fuel in recent years, which has helped to keep its fares low.
Ryanair's no-frills approach to air travel has made it popular with budget-conscious travelers, but it has also faced criticism for its customer service and treatment of employees. The company has been accused of poor working conditions and mistreatment of staff, and it has faced backlash from customers over its strict baggage policies and fees for additional services.
Ryanair has embraced technology in its operations, using it to streamline processes and reduce costs. The company has implemented a number of technological innovations, including an online booking system and a mobile app for check-in and flight updates. Ryanair has also invested in more fuel-efficient aircraft, which has helped to reduce its environmental impact.
As mentioned earlier, Ryanair's low-cost model has been criticized for its environmental impact. The company has taken steps to reduce its carbon emissions, including investing in more fuel-efficient aircraft and offsetting its carbon emissions through carbon credits. However, there is still a long way to go in terms of reducing the environmental impact of the aviation industry as a whole.
Ryanair operates in a heavily regulated industry, and it is subject to a range of legal requirements. These include safety regulations, consumer protection laws, and employment laws. The company has faced legal challenges in the past, including a lawsuit over its employment practices and a fine for breaching consumer protection laws.
In conclusion, Ryanair is a successful low-cost airline that has adapted to changing political, economic, sociocultural, technological, environmental, and legal factors in order to remain competitive in the aviation industry. While the company has faced criticism and legal challenges in the past, it has consistently demonstrated its ability to adapt and overcome these challenges.
Ryanair Pestel Analysis Business Teacher
EU has issued directives for prohibition on subsidies by the government to airlines to establish level playing fields and this approach has shown the political developments in different countries UK Essays, 2015. Most crucial of these today are rules relating to travel restrictions adopted by governments to combat Upon the advice of health authorities, countries all over the world have adopted travel and tourism restrictions to contain the spread of the virus. Countries such as El Salvador adopted Bitcoin as a legal tender, it was considered a next step in crypto currency adoption, but it has failed miserably. Customers expects Ryanair to adhere to not only legal standards but also to exceed them to become responsible stakeholder in the community. Tesco External Factors 3270 Words 14 Pages IMPORTANCE OF EXTERNAL FACTORS AFFECTING BUSINESS Business of the organization is affected by many factors. Ryanair is an airline registered in Ireland Ryanair, 2017 , however, as the airline maintains large bases in the UK, unfavourable Brexit outcomes could negatively influence not just Ryanair, but other low-cost airlines' operations in the UK Kilpatrik, 2017.
There are some internal and external factors influencing the business. From Digital Strategy to Airline Strategy in a Digital World - Accenture. The firm runs with more than 8500 employees. Ryanair can access the present infrastructure to drive growth in sector in United Kingdom. There is very high aircraft utilization rate with RYANAIR. Acquiring the local airline will require a large amount of financial resources; this is not likely to be a problem as Ryan air has a strong financial base. Growing role of social media and influencers — Social media influencer marketing has taken off in the last three years.
Social Factors The passengers look for the safety in the airline and if the passengers feel safe, then they will prefer to travel from the airline. On the other hand countries have put measures in place such as strict visa policies and border controls in an effort to combat terrorism attacks. A lot of major companies including — McDonalds, Nike, Starbucks, BP, Shell, IKEA, Toyota etc have already left Russian markets and it has put added pressure on other companies to leave the Russian market. The company transported more international passengers than any other airline did in the same year. However, they have a negative reputation in the market due to a few mishaps. It will be both a geo-strategic disruption and geo-economic disruption.
Another technological factor has been the improvement of airplane technology. PESTLE is a business tool that used by companies to track and analyse the macro environment in which the company operate. The high inflation environment will not only impact Ryanair pricing and sourcing strategies but also impact its profitability, given the sales will come down because of the demand destruction in the industry. Increasing focus on profitability — As the interest rates are increasing in broader economy, investors will focus on profitability. The only other alternative is air travel, but it is relatively expensive, thereby creating a market segment price-sensitive air passengers. Since the low cost revolution, air travel is no longer seen as an expensive, luxury item. The colonial pipeline disruption had illustrated that fact how the core infrastructure is vulnerable to cyber threats.
Game theory As it can be clear from the appendix 1 that using game theory RYANAIR has to be ready to analyze and jump into any new moves made by its competitor. They take their business models to Africa e. Airlines were responsible for the large USD17 billion of economic losses globally. Paris Climate targets - Climate targets that are set in Paris Climate summit are now almost out of the window for most countries because of both the increase in prices of oil and gas, and shortage of the inventory in the market. Ryanair is Irish airline and the staff of the airline is very polite and hospitable. The passengers can get complete information about any airline online and they can know the time and fair of the flight to any particular destination. It is contributing not only to the increasing inflation in the economy but also greater uncertainty in the society.
All the above enable RYANAIR to have low fares and so, target customers that are price-sensitive Emett 2003. Housing prices decline — The increase in interest rates to reduce the inflation will result into higher mortgage payments, leading to more house foreclosure and price decline in the housing market. Companies can tap social media influencers not only to reach customers directly but also to build a community that can feed product ideas and trial runs. It has been operation in Airline industry, therefore facing political, economical, technological, environmental and legal factors. They incur no cost with connecting passengers as they provide only point-to-point service. The external factors happen outside of an organisation.
Apart from the main risk of not understanding the local air industry, other risks Ryan air will likely face includes: Difference in Organisational culture — In order to mitigate against the risk, an organisational audit should be carried out on the airline they intend to acquire, in order to determine the gaps in organisational culture. So we have US-China trade war in international arena, the Russian boycott after the invasion of Ukraine, Brexit fallouts in United Kingdom, and domestic pressures on politicians across the European Union. The weakening of the pound created a strong barrier and impacted negatively. Technological Factors that Impact Ryanair - Maturity of technology — The technology in the sector is still not reached maturity and most players are vying for new innovations that can enable them to garner higher market share in United Kingdom. Further, Israel is among the top 20 countries in terms of GDP per capita. Table of contents Macro-environment PESTEL Analysis: Political and legal factors Political issues are very relevant in the airline industry which has been and still is under political influence.
This tool is very useful which help in overall growth and development of organization after learning from the past mistake and working for future. Further, the manufacturers are experimenting with planes that are capable of running solely on hydrogen. The airlines have to follow these regulations and provide necessary benefits to the passengers. In the industry, Ryanair needs to have a diversified and nimble supply chain to meet the challenges of both upcoming US recession and supply chain disruptions oriented from China. Economic factors affecting Ryanair The airlines in Ireland suffered a major loss in the COVID and a total of 183,000 flights were canceled which led to a 62% increase in air traffic.
Ryanair PESTEL Analysis / Russia Ukraine War Impact
The Ansoff and Porter 5 forces analysis highlights information such as Ryanair leading the approach in online booking and the need of union support at Ryanair creating further flexibility. It has more than 300 boing aircrafts. PESTLE Analysis: The Pestle Analysis Of Alphabet Games 1368 Words 6 Pages PESTLE analysis : Is a shortcut of six words which is political , Economic , Social , Technological , Legal and Environmental. New Russian law raises doubts over recovery of Irish-owned aircraft. There are numerous airlines catering for similar destinations and hence passengers have the tools to make informed decisions based on their budget. With respect diversification, the coach and train services mentioned earlier can be delved into.
Ryanair operates in a very competitive industry where major players have resorted to consolidation in order to grow their market share. The company has a significant name in the airline industry. Due to economic recession in Europe, the airline was suffered badly and there was serious decline in their earnings during last year and it is trying to overcome the loss of previous year. We also conducted the internal and external analysis to find out the strengths and weaknesses of the company. Dehumanization of workers — According to a study published in Harvard Business Review, Dehumanization of the workers in the gig economy is not a bug but a feature of the business model of these companies.