SWOT and PESTEL Analysis for Ryanair

This report provides a SWOT and PESTEL analysis for Ryanair, highlighting its strengths, weaknesses, opportunities, and threats. It identifies the main problem of poor customer service and provides recommendations to address it. The report suggests implementing the Contingency Theory and McClelland's Theory to improve customer service and maintain Ryanair's position as a market leader.

CASE STUDY

Contents
INTRODUCTION.....................................................................................................................................3
Literature Review......................................................................................................................................3
SWOT and PESTEL Analysis for Ryanair..............................................................................................3
Analysis......................................................................................................................................................6
Main problem faced by Ryanair that requires immediate attention..........................................................6
Recommendations.....................................................................................................................................7
Solution to the identified problem...........................................................................................................7
Experience in writing the report..............................................................................................................9
CONCLUSION........................................................................................................................................10
REFERENCES........................................................................................................................................11

INTRODUCTION
Ryanair Holdings plc is a budget airline that was founded in the year 1984 and is
headquartered in Dublin. The airline is regarded as the Europe’s largest group and is the parent
company of Malta Air, Buzz, Lauda as well as Ryanair DAC. The airline connects over 200
destinations across 40 countries worldwide (Rothaermel, 2016). The company has a team of
highly skilled aviation professionals including pilots, cabin crew and ground staff. Ryanair was
ranked number one in Europe for its on-time performance ad leading the industry with a safety
record for 34 years (Caridá and Bonizio, 2018). The report describes the SWOT and PESTEL
analysis for the company and also identifies the main problem that it is facing and requires
immediate action along with the reason behind it. The report also proposes a solution to this
problem with the help of two management theories. Lastly, a short report regarding experience in
writing this report is also included.
Literature Review
SWOT and PESTEL Analysis for Ryanair
SWOT Analysis
SWOT is a strategic tool that can be used by both organizations as well as individuals in
order to identify their strengths and weakness. The analysis also provides insight into various
opportunities of growth and expansion as well as various potential threats that can impact the
performance of the company. According to the view point of Noah Parsons, strengths and
weaknesses are internal to the company whereas opportunities and threats are external to it
(What Is a SWOT Analysis, and How to Do It Right (With Examples), 2020). SWOT enables
companies to analyze both positive as well as negative attributes with the help of a single
analysis. It also facilitates a better understanding of how the company has been performing. The
SWOT analysis for Ryanair is explained below –
Strengths – Ryanair is a well-established airline company in European market that
covers nearly 200 destinations across 40 countries and is regarded as the low-cost airline group
nation-wide (Heo, Blal and Choi, 2019). Ryanair is considered as the greenest and cleanest
airline group in Europe wherein if customers choose to fly with the airline, it will reduce the
overall carbon emissions by up to 50% as compared to other airline groups. The company also

maintains an online ticket reservation system through which the customers can manage their
travel without having to rely on a travel agent.
Weaknesses – Apart from being one of the most successful low-cost airlines in the
world, Ryanair still has some weaknesses. The company has been expanding its fleet
aggressively in the last few years which can lead to overcapacity in the coming years. Also, the
airline is frequently associated with poor customer service as well as charging extra costs. The
company does not treat its employees in a very good way and as a result does not have healthy
employee relations.
Opportunities – Besides the uncertainty of Brexit, there are any opportunity that the
company can avail in order to sustain its growth (Phadermrod, Crowder and Wills, 2019).
Ryanair should lay its focus on providing a good experience to its customers by incorporating the
Always Getting Better program. Employees are considered as the face of the company; thus, the
company should take this as an opportunity to train its employees regarding treating the
customers politely and not with an arrogant and rude behavior. This way, the company will be
able to expand its business in different untapped markets.
Threats – The company has been facing a lot of competition from other airlines in the
industry. Also, there is a threat of new entrants offering similar products as that of Ryanair so as
to attract a lot of customers and gain a competitive edge. Other external factors like currency
rates, fuel prices etc. can also pose as threats to the company (SWOT Analysis of Ryanair, 2019).
The company has also been facing threats from the European Union like hidden fees etc.
From the above SWOT analysis, it can be analyzed that Ryanair has various strengths
that have helped in gaining the position that it has today (Blockeel and et. al.,2016). But on the
other hand, the company possesses various weaknesses as well which it can overcome by opting
for effective strategies. The potential threats that can affect its overall performance and position
in the market should be addressed and effective ways to overcome the same should be adopted.
PESTEL Analysis
PESTEL is a framework that is generally used by the marketers of a company to monitor
and analyze the different macro-environmental factors that can impact the organization. The
analysis helps organizations in gaining a competitive advantage over other players in the market.

The analysis is a helpful tool during the strategic planning of a company as it can formulate plans
and strategies that are efficient and will help the business in succeeding. The PESTEL analysis
for Ryanair Holdings plc is descried below –
Political Factors – An increase in the tax rates of the passengers can impact the sale of
tickets of Ryanair. Also, a rise in the tax rates by the government on both short as well as long
distance journeys can force the customers to think twice before they book their tickets.
Unfavorable Brexit outcomes can not only influence Ryanair plc but other low-cost operating
airlines as well.
Economic Factors – These factors can impact the way a company carries out its business
as well as influence its overall profitability in the market (Song, Sun and Jin, 2017). Different
economic factors are inflation rates, interest and exchange rates, economic growth etc. A decline
in the value of pound will create a strong barrier for the company and impact it negatively.
Social Factors – Different social factors can also influence the functioning of the
company as preferences of the customers are changing over time. The different socio-cultural
factors that can impact Ryanair holdings plc are age, gender, levels of disposable income,
cultural backgrounds etc.
Technological Factors – Technology is advancing increasing with new soft wares or
other methods being introduced every now and then. Ryanair should incorporate the latest
technology in its system in order to reduce manual labor and other unnecessary costs. The
company should offer its customers and option wherein they can manage their itineraries easily.
Environmental Factors – Customers are becoming aware about the environment day by
day and want to associate themselves with brands that are socially responsive. Carbon emissions
have reached alarming rates which have impacted the overall performance of different low-cost
airlines.
Legal Factors – Different countries have their own legislation and regulations (Pan,
Chen and Zhan, 2019). Brexit has led to creating uncertainties for the aviation industry. If
respective company wants to gain a competitive advantage and be successful, it should follow
the different legislations. If the company fails to do so, its performance as well as productivity
will be impacted adversely.

Therefore, from the above PESTEL analysis, it can be analyzed that there are different
macro environmental factors that can either affect the company positively or negatively
(Nekrasov and Melnyk, 2017). Thus, Ryanair should consider all these factors so that it can plan
effective strategies that will be help it in achieving the desired goals and objectives.
Analysis
Main problem faced by Ryanair that requires immediate attention
Ryanair is one of the leading airline companies in the Europe and has been facing a lot of
problems over the last few years relating to employee relations, disputes among the employees as
well as customer service. But the main problem is that of providing poor service to the
customers. There have been cases when customers reported that the behavior of the staff was
rude and unpleasant during their flight (Madden, Rashid and Zainol, 2016). The staff has been
reported not treating the customers as guests but rather a nuisance. The company has been so
busy in maintain its position of a low-cost market leader that it has lost out its focus if the
customers are actually being treated well by the staff both at the airport as well as in-flight or
not. A recent survey that was conducted showed that nine out of ten people would not travel
again or leave the brand if they’re treated badly. Ryanair Holdings plc has been named as one of
the worst brands in terms of customer service.
Also, the company received a poor rating in terms of customers service and people
described the staff as arrogant and greedy. Due to this, there are a lot of customers who have
switched to different airlines to travel from one destination to another. Also, strikes at the
company caused a lot of flights to be cancelled, this made the customers angry. One of the other
reasons behind the customers not being satisfied with the services of the airline is that it is not
compensated the customers so far. The customer service professionals also do not respond to the
queries or issues that are raised by the customers which makes them frustrated. There is no help
available to the elderly passengers who require assistance during boarding. Although, the
company has been making some efforts to reduce the bad image among the customers by
introducing online chat assistance and increasing the number of helplines, it is still facing issues
because the employees are not making use of them effectively (Ryanair fined for bad customer
service... How's that 'nice' thing going for you Michael?, 2020).

Thus, customer service is a main problem that Ryanair has been facing which requires an
immediate action. This is because if the problem is not addressed it can impact the overall brand
image of the airline in a negative manner (Yusi and Idris, 2018). Poor customer service can lead
to job insecurity and unhappiness among the employees of the company. They will not pay
attention to details and as a result won’t be able to satisfy the needs of the customers. The main
reason as to why the company should address this problem is to avoid losing on its customers. If
the airline will continue providing bad service to the passengers, it will force them to look out for
better options while travelling (Cox and et. al., 2016). The confidence as well as motivation
levels of the employees will also decline as there will not be enough strategies to handle the
issues of the passengers. If the company wants to maintain its position of being Europe’s largest
low-cost airline, it will have to pay attention to this situation and thus seek different ways in
which it can be controlled.
Improving the customer service will help the company in earning back its customers as
well as maintain the position of a market leader in the aviation industry. It can be said that poor
customer service is a result of dissatisfaction a well as neglect among the employees. They
company will start losing on its profitability as well as revenues if it does not take this issue
seriously and still continues with its poor service to the customers (Zastempowski, 2019). A
good customer service will help the company gain customers who are loyal to it and talk good
about it with others. This way the company can increase its existing customer base and also, the
customers will not mind paying extra if they receive a good service. The company will be able to
grow its business in locations that it does not operate in as of now which will be fruitful as the
customers will have a good word about its service. Therefore, it can be analyzed that the
respective company has been facing a lot of issues regarding customer service and should seek
ways in order to resolve them.
Recommendations
Solution to the identified problem
The main problem that is identified above is that Ryanair does not provide a very good
service to its customers and thus needs to pay attention to the same in order to maintain its
position of being the number one low-cost airline in Europe. The solution to the problem is
explained below with the help of two management theories/concepts.

Contingency Theory
This theory states that there is no particular approach of management can be applied
across various organizations. Rather, there are various internal as well as external factors that can
impact the same. If Ryanair Holdings plc decides to implement this theory in its system, it will
be beneficial for it as the managers will have a wide variety of ways in which they can react to
the problem. It will also help the management of the company during its decision-making
process. The theory can help managers of the company to enhance their overall leadership as
well as management skills. Since the application of respective theory can be moulded according
to the situation, it will be easy to address the problem (McGrath and Bates, 2017). The
management of the company will get a broader view of the company as well as the other
problems that the organization is facing.
Contingency approach also focuses on the variable nature of the business due to which
the employees of the company get a chance to work under different environmental conditions.
Also, different problems that arise within a company have distinct solutions. Before applying this
theory to solve the problem, the company should analyze the different internal as well as external
factors like leadership approaches, size of the organization etc. The theory suggests that leaders
are not equally effective in all situations and thus opt for different styles of leaders based on the
issue or the situation. Thus, through application of this theory Ryanair Holdings plc will be able
to overcome its problem of poor customer service and thus provide them with a seamless
experience whenever they fly with it. Also, it will be able to maintain its position as well as
goodwill in the market. As a result, the customers will be satisfied and would consider flying
with Ryanair again in the future.
McClelland's Theory
The theory states that an individual possesses any one of the three motivators that include
affiliation, need for achievement or power. All these motivators are not inherited by a person but
are developed over time through different experiences of life as well as culture. Each of these
motivators have their own characteristics like if a person possesses achievement as a dominant
motivator, there is a strong need to set goals and accomplish them (Niknazar and Bourgault,
2017). The person takes risks that are carefully calculated and analyzed. On the other hand,
people who have affiliation as a dominant factor, has a strong want of belonging to a group, to be

liked as well as supports collaboration instead of competing. These people do not like taking
risks or favor uncertain conditions. Lastly, people having power as the dominant motivator, want
to influence others and take control over them. They also enjoy winning arguments and enjoy
being recognized.
If Ryanair decides to implement this theory, then it will have to allocate different tasks to
the employees according to their needs which will further enhance their motivation and
confidence levels. Thus, the employees will be able to provide effective service to the customers
and thus the customers will be satisfied. The theory will also help the company in identifying the
needs of the customers and then addressing them in an efficient manner (Berry, Broadbent and
Otley, 2016). Also, since the employees are given tasks based on their needs, there will be less
chances of them coming up with any kind of excuse. The theory will basically make sure that all
the employees are working effectively towards providing the customers with a seamless
experience during the flight as well as at the airport. This way, the company will be able to retain
its customers and maintain its position of being the largest low-cost airline in the Europe.
Therefore, the company is recommended to train its employees in such a way that they
develop skills in order to provide effective and a seamless experience to the customers. Also, if
the above management concepts are applied then the employees will be allocated tasks based on
their needs, as a result of which they will be more engaged and committed to their jobs. Thus, the
company is recommended to pay more focus on the service that it is offering to the customers.
Experience in writing the report
It was a good and learning experience for me while writing this report. I got a chance to
learn many new things including information about the Europe’s number one low-cost airline,
“Ryanair”. I learnt that the company has been performing very well in the aviation industry and
also connects nearly 200 locations across the world in 40 different countries. Although, Ryanair
has various strengths, it still has been facing a lot of problems relating to employee relations and
disputes among them. But the major problem that the company has been facing from the last two
years is that od customer service. There have been various situations when the customers
reported that they were treated badly and spoken to rudely by the staff members. The company
has not been taking this problem seriously, as a result of which it has been losing its customers as
they are switching to other airlines.

I got a chance to learn that there are various macro-environmental factors that can impact
the overall performance of a company. For this, a company can use PESTEL analysis which is a
useful tool that is commonly used across different industries. Also, in order to solve problems
like that of customer service etc., there are a variety of management theories that can be used like
system’s theory, contingency theory and bureaucratic management. These theories can be
implemented to different situations and thus the situation can be overcome. Lastly, such
situations should be addressed immediately otherwise they can impact the goodwill as well as the
performance of the company in the market. Also, in such cases the company cannot gain a
competitive advantage against others and thus stand out. Overall, it was a learning and very
enriching experience for me as I got to enhance my knowledge and also, improve my overall
confidence.
CONCLUSION
From the above report, it can be concluded that there are times when companies come
across various challenges or problems. If they are not addressed effectively, they can impact the
overall performance as well as reputation in the market adversely. In order to identify various
strengths and weaknesses, a company can carry out SWOT analysis which also helps in
identifying the various opportunities as well as potential threats. The impact of various macro
environmental factors can be assessed with the help of PESTEL analysis. Different management
theories should also be implemented that can help companies to over various problems as well as
handle situations. Different macro environmental factors can impact the functioning of a
company either positively or negatively. Therefore, in order to be successful and overcome
various situation, companies can implement various frameworks that can help in gaining a
competitive advantage against competitors in the market.

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