Essay on PESTEL of Rynair

Ryanair was established in the year 1985 by the RYAN family and has grown from a small airline flying a short hop from Waterford to London, into one of the Europe’s largest carriers. The company expanded and within 4 years it had 350 employees, 14 aircraft, and carried 600,000 passengers a year. It is currently serving to 26 European Countries with 148 destinations. It operates on 794 different routes daily serving by more than 1050 flights in a day. It has totally 169 aircrafts running for different routes with 5986number of employees working in it However, Ryanair’s costs rose drastically and it recorded losses of £20 Million sover four years despite its growth. Although consumers were continuing to fly Ryanair

In this report, we will start presenting the history of Ryanair airline. After this, we will discuss the competitive advantage of Ryanair, how they gain it and build it. And we will answer whether Ryanair was able to sustain its competitive advantage or not and why. Also, we will identify the competitive strategy that Ryanair pursued and we will list the

Ryanair is one of the largest airlines in terms of passenger numbers (REF) and has continuously grown in size and value over time as shown above. The extent of such an expanding firm is conveyed over the last eight years as Ryanair’s profits have more than quadrupled. However, there have been drops in profits in 2004 and 2008. In 2004, the airline was hugely affected by the conflicts in Iraq, the renewed threat of terrorism and endless increasing oil prices. However, in this same period, Ryanair managed to launch new bases in Rome and Barcelona, launch 73 new routes, takeover their competitor Buzz for a knock-down price and carry more passengers than BA in the European market. The reason for the decrease in profits in 2008 was due to increases in fuel prices and significantly increased airport charges, particularly at their largest bases at Stansted and Dublin.

In today’s business world, Aviation industry is frequently developing rapidly in order to compete among each other and survive in the larger markets. The passenger air travel industry is facing aggregate competition between low cost/no frills carriers -LCC and the more traditional full service carriers-FSC (Hunter 2006). Due to rapid development, consumer trend improved in the market because flying on mainstream carriers was no longer cost-effectively practical, which lead to an appear of low cost carrier (Whitelegg, 2005). Subsequently, operation strategy is fundamental to the success of the businesses. Slack, Brandon-Jones and Johnston (2013) defined operation strategy as “ The pattern of strategic decisions and actions, which set the role, objectives and activities of the operation (Slack, Brandon-Jones and Johnston: 2013: P70). In this essay, it will be discuss, how two successful businesses: British Airways and Ryanair compete and survive in the airline industry according to strategic operations performance. British Airways (BA) is a worldwide airline based in United Kingdom. It is a famous flag carrier airline. British Airways was established on 31st March 1974 and is now among the largest airlines compared to Ryanair, which is, an international airline based in Ireland. It is known as the low cost airlines and was set up in 1985 by the Ryanair family.

To identify an appropriate strategy for a given industry one must look into the external and internal factors influencing the company. The following report will discuss these factors regarding Ryanair, which is one of the leading budget European airlines.

You will investigate the British Airways and provide a personal, but informed, view of the company. The assignment will give you the opportunity to apply your understanding of the Business Environment to the analysis of an international business from a range of different perspectives: considering how businesses set their objectives, influence their stakeholders, control their costs and fix their prices within the context of a particular national environment (the UK). The submission should be suitable for publishing in a specialist ‘business’ magazine.

1. Ryanair’s domain in relation to the external environment and sectors of concern for the company

The aim of this report is to carry out a strategic analysis of Ryanair. This will involve investigating the organisation’s external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate key strengths and any weaknesses that need dealing with. Finally, a SWOT analysis will be carried out to assess the extent to which Ryanair’s strategies are suitable to what is happening in its task environment.

In this essay, I will also be looking at the customer service of Ryanair. Ryanair is a low budget ‘no frills’ airline which offer domestic, inbound and outbound flights out of their hub which is Stansted. Ryanair have their headquarters in Swords, Ireland. First founded in 1985 by the Ryan family, with a share capital of just £1.00. They offered a 15 seated aircraft during the summer months from Waterford, which is in the southeast of Ireland to London Gatwick. In 2013 Ryanair saw 81,668,285 passengers, with over 300 aircraft in their fleet but with the added 180 aircraft ordered in 2013 they hope to see their fleet over 400 by the end of 2014, then a further increase to 500 by 2019. They currently fly to 183

My first and most important goal in undertaking this research assignment is to source, dissect and analyse the low cost strategy model of Ryanair and how they succeed in using this strategy.

When I began my research into Ryanair I thought it best to start at the core of the company. I searched for a mission statement to provide me with an insight into the

“Since Ryanair pioneered its low cost operating model in Europe in the early 1990s, its passenger volumes and scheduled passenger revenues have increased significantly because it has substantially increased capacity and demand has been sufficient to match the increased capacity. Ryanair‘s annual booked passenger volume has grown from approximately 945,000 passengers in the calendar year 1992 to approximately 81.7 million passengers in the 2014 fiscal year”. (Ryainair,2014p4-8)

1. In-depth environmental analysis of the European Airline industry and discuss the implications for the budget sector and especially for Ryanair. 2. An integrated understanding of the functioning of a company – its human and technical operations, leadership, customer relationships and financial structure. 3. Implications of the internal functioning to create viable strategic positioning and discuss any changes to Ryanair’s approach to ensure an improved sustainability 4. Evaluate the strategic leadership style of Michael O’Leary

The purpose of this report is to comment at the first part how Ryanair achieve its competitive advantage through the RBV analysis (Barney,1991), the second part will assess its approach to the diversification through the Ansoff matrix , the third part will discuss the company’s organisational culture using the cultural web modeland last part its internationalization strategy.

In 1971, Southwest Airlines revolutionised air travel with its low fares and strong focus on customer service. Ryanair used Southwest’s innovative business model and have become very successful. Today it operates across 26 countries and carries more international passengers than any other airline in the world (73 million passengers in 2010/11) On the other hand, unlike Southwest Airlines, Ryanair did not consider focusing on customer service. They have a very poor reputation in this area (Euromonitor International, March 2009). Even though