Pestel Analysis

802 Words4 Pages
PESTEL Analysis
In this part all factors, which influence the company as a whole but are out of their direct control including wider social, political and economic factors shall be explained. The analysis of those factors of the macro-environment is therefore often known as PESTEL analysis.3

PESTEL is an acronym for the six key strategic areas of change: Political, Economic, Social, Technological, Ecological and Legal and a technique for understanding the various external influences on a business4. Each single area has the potential to fundamentally change the competitive environment your company operates in.
Due to the fact that the airline industry is very much influenced by changes taking place in the environment and has undergone
…show more content…
The World Health Organisation (WHO) has already forecast a global epidemic within the next years. This will certainly have a larger influence on Ryanair’s business, relying as it does on a high number of sold seats among leisure travellers than do traditional airlines whose clients merely fly for business reasons and which are operating in terms of yield management.8

Low price, value for money and efficiency are core values for Ryanair. Those core values should not change regardless of environmental turbulences. This means that cost reduction and other profit sources than travel fares are important factors in Ryanair’s strategy since they cannot compensate its expenditure by increasing travel fares.

For the low cost strategy prices of taxes, fuel, and governmental regulations are especially important. The airline deregulation not only helped Ryanair but also increased competition under different airlines and air traffic.9 The result of this is increased regulations by the EU government in terms of safety and environmental rules. This again raises operating costs within the EU. When Ryanair wants to maintain its low fares it has either the possibility to cut costs elsewhere in order to compensate
Get Access