SWOT and PESTLE Analysis of Ryanair

This article provides a comprehensive SWOT and PESTLE analysis of Ryanair, highlighting its strengths, weaknesses, opportunities, and threats. It also discusses the main problem faced by Ryanair, which is its employee relations and internal disputes. The article suggests solutions to improve employee relations and enhance the company's reputation.

Context of Business

Table of Contents
Context of Business.........................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SWOT and PESTLE Analysis of Ryanair...................................................................................3
Main Problem of Ryanair............................................................................................................6
Solution of the Problem...............................................................................................................8
Experience in Writing the Report..............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Ryanair, an Irish budget airline founded in 1984 headquartered at Dublin Airport, Ireland.
Main operations of bases of Ryanair are based at Dublin and London Stansted airports. Route
network of Ryanair serves 40 countries in Europe, North Africa and Middle East at 225
destinations. Fleet size of Ryanair is 287 and employs around 17500 employees. The airline have
successfully operated as a budget airline but recently is facing some issues due to increasing cost,
uncertainties because of Brexit and staffing issues. These problems have been capitalized
because of negative media coverage about customer service and employee relations and disputes.
This report will address internal and external analysis of the airline with tools like SWOT and
PESTLE analysis. This will also discuss important problem of the Ryanair, which require
immediate attention from the airline so that its impact can be reduced and this will also include
solution for the problem and reflection in writing the report.
MAIN BODY
SWOT and PESTLE Analysis of Ryanair
SWOT Analysis
Strength
Low cost- This is biggest strength of the Ryanair. This is because Ryanair is a low cost airline
and this has contributed in success of Ryanair (Büyüközkan and Ilıcak, 2019). Ryanair has the
lowest cost in European airline industry.
Low Fares- Low fares of the Ryanair are because of its low cost and enable company to earn
adequate profit. Average fares of Ryanair are less than its competitors in Europe and this make it
strength for the airline.
Innovation- Ryanair has the change nature of short-haul airlines and Ryanair is the only
European airline to do this (Barrett, 2016). Earlier this was an act of imitation but later
innovation became key factor for success for Ryanair.

Management Focus- Management of Ryanair have focused on doing what it does best. This is
focus on low cost, low fares and innovative airline practices. Innovation has been aimed at
finding the ways to keep the fares and cost low as possible.
Weaknesses
Brand Perception- Brand perception of Ryanair is its weaknesses as the low cost of the airline is
perceived as indicator of low quality of the airline (Büyüközkan and Ilıcak, 2019). Ryanair have
focused on safe and punctual air travel but even after this Ryanair have performed poor in polls,
awards and survey.
Seasonality of Earnings- Earnings of Ryanair are highly seasonal, its profit and increase in profit
rely on strong northern summer. This profit is used to off-set a loss making winter.
Opportunity
Improved customer service- Ryanair has managed to keep its cost and fares low and by
improving its customer service it can create opportunity for airline. This can include
improvement in customer interaction with the airline regarding their booking, information about
the flights and journey experience of the
New aircraft- Ryanair has announced buying of new aircrafts and this creates an opportunity
through which Ryanair will be able to serve more customers.
Business Travellers- Business Travellers are a very good opportunity for Ryanair (Barrett, 2016).
Business travellers need to travel frequently and in that case Ryanair can target them as
customers group and attract them through some offerings.
Threat
Accident- Ryanair have a record in safety but accidents might be a threat for Ryanair because of
Ryanair’s low cost strategy have been considered by media that it cuts corner on safety.
Employee relations and internal disputes- Dispute in management and pilots of Ryanair have
been covered by media and this is a significant threat for the company (Sezgin, and Yuncu,
2016).

Increasing cost- Cost of fuel and other operations is increasing and this pose a threat for low cost
strategy of Ryanair.
PESTLE Analysis
Political
Most important factor that can affect Ryanair is Brexit (Achinas and et.al., 2019). Ryanair is
European airline and most of its operations are limited to Europe and European country and in
such case Brexit uncertainties can affect Ryanair and its operation and profitability.
Economic
Brexit have significantly affected UK and this is why low cost airlines which are earning from
UK market will be affected. This is will also affect cost of operations in UK and taxes and other
cost.
Social
Changing lifestyle and increasing number of travellers in short-haul, which consider price as one
of the significant factor, especially those who are frequent travellers. This make Ryanair an
attraction and suitable service for them. Presently generation are being evaluated by generation
Z, Y and Millennials and this requires companies to think according to their way (Zahari and
Romli, 2019). For example- Millennials want to have quality customer service and Generation Y
want affordable travel. Being a low cost airline Ryanair mainly targets either middle income
customers or those who are frequent flyers.
Technological
Airline industry has included significant technological change and this has become important for
airline industry for their survival in long run. Airlines need to digitalize everything and almost all
the process of the airline from distribution channels to marketing everything needs to be
digitalized for increasing its reach and impact. Improved safety of the flights and facilitating
customer experience all requires technological integration.
Legal

Airlines operating in Europe needs to evaluate impact of Brexit on their operations. This is the
present legal challenge for the European companies. Other than this laws and regulations
governing airlines and their operations also play major role in affecting and changing its legal
environment (Achinas and et.al., 2019). Ryanair other than Ryanair get affected from law and
regulations of its home country and being a part of EU its regulations and policies also affect
governance of Ryanair.
Environmental
Increasing carbon footprint which is one of the important environmental issue and this is causing
various other problems like increase in temperature. This requires airlines to find ways in which
they can reduce their carbon footprint and Ryanair will also have to think in that direction.
Organisations and countries are taking actions to reduce carbon footprint and UK after Brexit can
take such action which might affect Ryanair’s operations.
Main Problem of Ryanair
Main problem which is being faced by Ryanair is its employee relations and internal
disputes. Ryanair had some issues with its pilot and this was captured and coverage by media
which made the problem more difficult and complex. Employees are integral aprt of functioning
and success of the organisation (Kuznetsova and Kuznetsov, 2019). In context of Airline
industry pilots are most important and as pilots are having conflict with the company and its
management is very serious and difficult problem and requires immediate attention of the
company.
The problem occurred when pilots of the company decided to go on a strike over their par
issues and their working policies. Later the company was also considered and braded ‘Disgrace’
as they did not took action at the right time and before completion of the deadline. This whole
incident was covered by media and this affected the goodwill and reputation of the company.
Ryanair harmed its image and this was the reason of the negligence towards the employees and
their welfare in the company. They are required to be paid adequately and at the right time and
employees are also required to provide proper working environment. Employees of the Ryanair
also demanded policies as they are employed at other airlines (Harvey and Turnbull, 2020).

Ryanair should also have considered that so that employees do not take any harsh action against
the Ryanair but their negligence resulted in loss of goodwill and image of the company.
The reason requires immediate attention from the company because if the problem and
dispute not solved properly they might result in long term financial loss to the company. This is
because pilots are main reason and factor for the airline operations and they are on strike this
means airline operations are being affected causing financial loss to the company (Abugre,
2017). To avoid the increase in the financial loss company needs to pay immediate attention to
the dispute.
Some of the reasons that require immediate attention of the Ryanair for the problem of
Employees relations are-
 If this problem is not given due attention immediately this will affect image of the
company negatively and this will affect their future hiring and talent management.
 This will also affect motivation and morale of the employees of Ryanair who are not part
of the dispute going on in between management and pilots.
 Company might face problems from the side of organisations who are engaged in
employee welfare activities and organisations which are liable to take actions against
those treating their employees in negative way.
 This also affects perception of the customers for Ryanair. Perception of the customers for
Ryanair is already not very impressive because of its low performance in polls and
surveys. This has been affected more by the employee disputes of the company.
Employee issue means that company does not value its employees and this is not good
for its reputation.
This also raise question over its ethical and corporate responsible practices and all these reasons
require that Ryanair requires paying immediate attention to this problem (Buchan, 2017). Unless
this problem of employee relations and dispute can be cause of many negative consequences for
the company, which includes loss of profit and financial instability, risk of legal actions over the
company, reputation and goodwill of the company etc.

Solution of the Problem
Problem being faced by Ryanair is really complex and requires that company pays
immediate attention to solve the problem. The problem which is have been faced by Ryanair is
result of negligence of management about their employees (Abugre, 2017). This needs that
problem is solved by the efforts of management for its best effect and ensures that such problems
and disputes do not arise again. Conflicts are natural but they should not become dispute which
might harm reputation and image of the company and cause significant financial loss to the
company. There are some of the theories which management of Ryanair can take guidance from
to solve its problem these are-
Elton Mayo Theory of Management can be used by the management of Ryanair. This is because
the theory helps and contributes for modern human relations management. This theory of
management is based on his Hawthorne experiments and developed from his observation about
productivity of the employees under varying circumstances.
From the theory of Mayo it can be said that relationship factor is more important for employee
relations and for motivating employees rather than giving them monetary benefits. The problem
which has arisen at Ryanair is because employees have not been paid and their working
conditions are not proper (Trahair and Zaleznik, 2017). Management should ensure that they are
able to provide proper conditions of the work for their employees so that they do not feel that
they are being treated wrongly and that they do not possess any value for the company and
management and this becomes more critical when employees and their concerns are neglected by
the management. Problems when are occurred because of such circumstances can only be
resolved with managing relationship with employees. Ensuring that employees working in the
Ryanair are valued and their concerns regarding their work and management are properly heard
and their issue are not just heard but at the same time are resolved by the management.
There are various activities that company can undertake to ensure concerns of employees are
heard and responded. This will increase job satisfactions of the employees and at the same will
also positively affect the relationship between management and employees at Ryanair (Őnday,
2016). Positive employee relations will ensure that employees are ready to put their best effort in
their performance and at the same time chances of conflict and disputes are least.

Other than this one more theory that Ryanair can use for resolving its problem is Modern
Management Theory. This theory focus on present situation and motives of the employees in an
organisation and states that workers and employees do not only work for money. Satisfaction,
happiness and good living style and high standard of life are some of the reasons for which
employees work in an organisation. This theory states and considers that non-financial awards
are important for management of workers in an organisation. This theory of management focuses
on each factor of organisation and employees development and emphasizes the use of systematic
mathematical techniques in the system with analysing and understanding the inter-relationship
between workers and management in all the aspects (Luo and Peng, 2017). This theory has three
streams which are-
Quantitative Approach, also known as operational research and this is a scientific
method. This involves use of statistical models and systematic mathematical techniques for
solving complex problems. This theory can be used by the management of Ryanair to solve their
problems and their problem is also complex.
Management at Ryanair can use statistical and mathematical models to calculate what should be
decision of the management related to pay of the employees. Pay is one of the reason for their
conflict and statistical models and mathematical calculations can help management to determine
what should be right pay for the employees and on the basis of the statistical results they can
come in negotiation process with the employees.
System Approach is other stream of the theory in this system has been defined as a set of
regularly interacting components that create a whole unit (Cai, 2018). Some of the features of
this approach are-
System must have specific components. Change in one system of the unit affects other system
and subsystem of the unit. Every system is influenced by super system. System is goal-oriented
etc. This approach can also help management at Ryanair to resolve their issues as in this
employee and management are two system and policies and rules governing are their super
system and on the basis of rules and policies management can take decision and solve the
problem. But while doing this it is important that management considers that every system is

important and considers well being of the employees so that they do not get negatively affected
by the decision of management.
Contingency Approach is another stream of this theory and as per this theory of
management organisation is affected by its environment and environment is composed by
physical resources, climate, persons, culture, economic and market conditions and their laws
(Krasova, Osipov and Hilko, 2018). This approach also considers that no universally accepted set
of rules is there to manage the organisation.
As per this approach Ryanair can make decision which is best in the present situation of the
company and which have highest chances to resolve the problems and possess least risk.
Experience in Writing the Report
This report was about Ryanair which is a European Airline company and various parts of
this report gave different experience and as the report starts it includes pestle analysis of the
company PESTLE analysis is one of the most used tool for analysing external environment for
the company. The analysis includes impact of various external factors and all are important and
can significantly affect operations of the company (Barrett, 2016). Among all of them political
factor of the Ryanair needs to given due importance because UK market is a big market for
potential profits of the company and because of Brexit conditions in this market changes than
Ryanair will be greatly affected. This possess chances that prices might get increase and this also
possess threat for legal and regulatory factors and this is also Brexit and its uncertainties are
important for Ryanair and can bring major changes in the operational process.
Later I discussed about internal analysis and opportunities and threats which are available
to Ryanair because of its strength and weaknesses. Strength of Ryanair is that it is a low cost
airline and at the same time also provides quality service to passengers. Being a low cost airline
Ryanair ensures that its flights and services are safe and are on time. This makes the airline
perfectly punctual. These are its some of the strengths of Ryanair and weaknesses of the Ryanair
are its relations with employees etc. from the analysis of the Ryanair I understood that it is very
important for companies to position themselves right (Buchan, 2017). For example, a brand
which is selling its services at premium price will not target low and middle income customers.
Just like this low cost companies and airline should not target higher income group as their target

audience as they are concern about their luxury and budget airline can provide safety but luxury
is not provided by the budget airline. This report also made me understand that regardless of
nature innovation have become important for the companies if they are seeking to survive for
long time. Innovation enables companies to survive in market and at the same time also stand
strong in competition.
Later problem was identified which is being faced by the company and as per my view of
the business and its context employees and related problems are very important that
organisations need to deal with immediately. This is because employees not managed
immediately might significantly impact regular functioning of the company and it will have
impact on its cost and profitability (Cai, 2018). Some of the theories in this report were also
discussed and it suggest that with the theory of human relations and modern management
Ryanair management will be able to solve their problem with their employees and these theories
also ensure that proper management of employees according to them will also reduce chances of
such problems occurring again in the organisation.
CONCLUSION
On the basis of above discussion it can be concluded that Employees are key contributors
in the success of an organisation regardless of its nature and size. The responsibility of the
employees and their contribution becomes more important when the organisation is big as in
such case management cannot look after every activity of the organisation. This increases the
responsibility of the management towards employees for ensuring their well being at their
workplace. The above report was about Ryanair and the problems which are being affected by
the company and among other problems problem of the company in which company is facing
internal conflicts and employee relations are not good at the company. The nature and elements
involved in the process requires that immediate attention should be given by the management to
resolve this issue so that the negative outcomes of the company can be resolved. This report for
solution of the problem also discussed some of the theories and how management can apply this
to solve their problem.

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