Impact of SWOT and PESTEL Analysis on Ryanair's Business Operations

This report assesses the impact of SWOT and PESTEL analysis on Ryanair's business operations. It evaluates the strengths, weaknesses, opportunities, and threats faced by the company, as well as the political, economic, social, technological, legal, and environmental factors affecting its operations. The report also compares different leadership styles and recommends a suitable leadership style for Ryanair to meet its business objectives.

Context of Business

EXECUTIVE SUMMARY
Currently, due to pandemic sales and profitability of airline industry affected
adversely. In this, leaders and managers of concerned industry have accountability to take
significant measures for business activities or operations. This report is based on Ryanair
which believes in offering airline services to the customers at highly lower prices. It can be
summarized that by using transformational and democratic style company can meet goals.
Further, it can be stated that both macro and micro factors have significant impact on
business operations. It can be entailed that CSR and ethical framework of company seems
sound as Ryanair investing more funds in advanced technologies.

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
1. Assessing SWOT and PESTEL analysis in the context of Ryanair...................................3
2. Evaluating how factors pertaining to PESTLE and SWOT affects business operations...5
3. Comparing & contrasting different styles of leadership and commenting on Ryanair......6
4. Recommending suitable leadership style to Ryanair which helps in meeting business
objectives................................................................................................................................8
5. Commenting on social responsibility, Response and Obligations in Ethics with regards
to Ryanair.............................................................................................................................10
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
In the context of business unit, there are several factors which closely impacts
organizational operations and functions. Hence, it is an accountability of manager to develop
competent strategic and policy framework by evaluating all the factors including both internal
and external. In UK, airline industry plays a significant role in economic growth and
development and it contributes 1.2% in national GDP. Now, this industry is facing stiff
competitive situation as several players offering aviation services at lower prices. In order to
cope up with this, firm is required to come up with innovative aspects so that competitive
advantage can be gained. For this project, Ryanair has been selected, a budget airline in
Europe, which offers effectual services to the customers at suitable prices. In this, report will
provide deeper insight about the impact that micro and macro factors have on Ryanair.
Further, it will shed light on the leadership style which prove to be more beneficial for the
concerned business unit. Along with this, report will highlight social responsibilities and
ethics associated with airline business.
1. Assessing SWOT and PESTEL analysis in the context of Ryanair
Ryanair is operating at global level so there are numerous factors which directly
impacts its activities in the following manner. Hence, for getting success company needs to
develop framework after making evaluation of both internal and external environment.
Through Pestle, business organization can assess macro factors which impacts position at
marketplace. Further, SWOT analysis tool furnishes information about the aspects in which
company is highly capable for capitalizing opportunities available at marketplace.
SWOT analysis of Ryanair
Strengths:
Company is gaining high competitive advantage by maintaining and offering services
to the customers at lower prices (Ryanair SWOT: low costs remain the key strength, even as
customer service enhancements take root, 2021). Along with this, financial position and
performance of Ryanair is good in comparison to its competitors. Further, business unit has
secured leading position in terms of fleets and network or routes. Ryanair is known as
cleanest and greenest airline in European Union.
Weaknesses:

Changes which take place in labour relations and compensation arrangements have
significant impact on business aspects. Along with this, company may face problem of
overcapacity in the near future due to aggressive fleet expansion. Business unit is also facing
issues in creating satisfied customer base due to having ineffectual refund and pricing policy.
Opportunities:
By evaluating factors, it has assessed that Ryanair can improve customer experience
through the means of always getting better program (Ryanair SWOT Analysis 2020, 2021).
Firm also has opportunity to enhance ancillary revenue by focusing on myRyanair. Due to
Covid, Bank of England offered 800 million Euros to Ryanair. Hence, by using such lending
amount business organization can fulfil goals.
Threats:
Post brexit situation will put pressure in relation to lowering down prices due to
weaker GBP level. Business model and profitability also might be threatened as high
fluctuation takes place in fuel prices. High competition and strike situation also creates issue
for Ryanair pertaining to offering quality services. Pandemic negatively impacts aviation
industry and thereby growth as well as profit of Ryanair.
https://www.swotandpestle.com/ryanair/
PESTLE analysis of Ryanair is as follows:
Political factors:
Tax rates increased by UK government more than three times in the last 24 years.
This in turn creates pressure on firm in relation to charging high prices for both short and
long route services offered. Due to this, customer base and sales of Ryanair will be affected
adversely.
Economic factors:
Oil prices are fluctuating regularly but currently lower rate exist which aids in
company’s profitability. Further, passengers who spend money on leisure travel are
squeezing. Along with this, there are chances of increasing air traffic due to the growth of
short-haul capacity.
Social factors:

In UK, customers are price conscious in nature so they prefer to travel through airline
which offers services at lower rates. In addition to this, trend of holidays have also increased
among UK customers. Meanwhile, it will contribute in the sales and profitability of Ryanair.
Technological factors:
Now, companies operating in aviation sector are placing more emphasis on
undertaking modern advertisement tools. On the basis of this, by placing advertisement on
social networking sites Ryanair can promote services overseas. Along with this, referring
technological innovations business unit has made several arrangements for customers
(Ryanair PESTLE Analysis: Major Economic Setbacks, 2021). This helps in developing
satisfied customer base and retaining as well.
Legal factors:
Currently, Ryanair is obliged to comply with the laws and legislation of both UK as
well as EU. Accordingly, firm will face challenges in relation to flight suspension from EU
and operating business at lower cost. In order to remain competitive, firm also needs to
follow employment as well as health and safety laws.
Environmental factors:
Government is emphasizing on eco-friendly or sustainable operations with the motive
to ensure safe environment. UK government and EU both has developed guidelines related to
carbon emission with which Ryanair needs to comply. Thus, for developing effectual brand
image and enhance market share Ryanair needs to perform activities in a sustainable way.
2. Evaluating how factors pertaining to PESTLE and SWOT affects business operations
In the business environment, high level of association takes place between micro and
macro factors. Hence, by analysing both the factors Ryanair can come up with competent
framework for business growth and success. By focusing on technological, social, legal and
environmental factors concerned organization can take benefits of opportunities available.
According to Pestle analysis, through technological advancements Ryanair can develop by
effectual marketing campaign. Hence, by uploading the same on social sites business
organization can entice decision making of customers.
Further, in terms of environmental aspects, Ryanair can enjoy high market share by
doing business in a sustainable way. Moreover, now for building distinct image in the mind

of customer companies are involved in doing intense research for working in an eco-friendly
manner at global level. Thus, by managing business practices according to the current trends
and reducing carbon emission firm can increase both customer base and sales. However, due
to fuel price fluctuation if company fails to maintain lower prices then it results into less
customer base and profitability. Along with this, company’s failure in relation to complying
with specific guidelines during COVID may also threaten brand image and customer base. In
this way, all these factors impose threat in front of Ryanair so it needs to take effectual
measures for enhancing overall performance.
Ryanair also possess several strengths that help in reducing the effects of weaknesses
associated with the operational aspects. Hence, by conducting training, development and
motivational session firm can develop harmonious relationship with personnel. Further,
intense focus on sustainable operations will also help firm in attracting more customers. On
the critical side, due to having over striking situation company will face problem in relation
to develop high satisfaction among customers by offering quality services. In addition to this,
overcapacity or expansionary aspects may affect revenue and profit margin adversely. Hence,
at the time of strategy formulation management team of Ryanair should keep in mind all such
aspects.
3. Comparing & contrasting different styles of leadership and commenting on Ryanair
Autocratic leadership:
It falls under the category of top-down approach where all the decision are taken by
higher management and employees follow the same only. In comparison to democratic
leader, personnel who follow this practice focuses only on developing policies for the
achievement of goals without involving them in decision making (Graham, Lindahl and
Kocaoğlu, 2021). Ryanair is undertaking this approach now with the motive secure leading
position in the competitive environment. For example: In the pandemic situation Ryanair
have taken several decisions about working policies, salaries, incentives and other benefits
etc. In this, company can lead and implement new guidelines only when it complies with
autocratic style. Moreover, business unit will face employee resistance if it involves them in
decision making.
Benefits:
 Facilitates quick decision making by eliminating room for communication gap.

 Believes on the delegation of roles and responsibilities so that confusions among
members can be avoided
Drawbacks:
 Decrease in employee morale, motivation and creativity
 It limits professional growth as personnel are not involved in decision making
Democratic leadership:
Participative leadership style prefers to include more personnel in decision making for
getting innovative ideas about working aspects. However, in this, only leader has authority to
take final decision about business. It includes decentralized decision making by allowing free
flow of communication between leader and others (FAKHRI and et.al., 2021). In comparison
to others, such leadership style evolves high satisfaction and motivation among personnel.
Hence, Ryanair can use this style while developing strategies for improving customer
satisfaction and experience.
Benefits:
 Assists in taking quality decisions by inviting opinions from subordinates
 Enhancement of employee productivity and profitability
Drawbacks:
 In this, manager faces difficulty in maintaining secrecy about new announcements.
 Time intensive exercise
Transactional leadership:
This leadership style is based on short term planning and focuses on undertaking
activities which exert control on employees. In other words, transactional leadership style
relies on reward and punishment system for enhancing employee motivation. Hence,
characteristics of both transactional and autocratic leadership style is highly similar to the
significant level, However, unlike autocratic, in transactional leadership exchange takes place
between leader and subordinates. For instance, in Ryanair, leader will offer promotion as
reward to personnel when they perform better while undertaking such leadership style.
However, this style of leadership does not suits to Ryanair because sometimes it may result
into employee demotivation and less productivity. The rationale behind this, in such

leadership style company evaluates performance on the basis of predetermined standards.
This in turns into failure in the judgement of performance appropriately and thereby high
employee turnover.
Benefits:
 It clearly exhibits behaviour expected from team members and helps in achieving
goals (10 Leadership Styles and Their Pros and Cons, 2021).
 This leadership may be served as the most effectual way of for indulging stability
within firm as it eliminates doubt of personnel regarding working aspects.
Drawbacks:
 It lacks creativity of personnel in relation to performing task.
 Further, it is effectual for only those who attracted by extrinsic motivation.
Transformational leadership:
Leaders who follow this style lays focus on exploring personnel’s attitude about
change management practices. In other words, Ryanair’s leaders prepare their personnel
about changes take place within industry. Moreover, in the airline sector, companies do
changes more frequently in existing policy and strategic framework. Moreover, in the
dynamic business arena, firm can attain success only when they perform in line with
competitors. Accordingly, leaders of Ryanair always motivates their personnel for sudden
changes in workings or actions. Hence, instead of depending on previous statistics company
focuses on dealing with unexpected situations effectually. During Covid, Ryanair is using
concerned leadership for handling all activities in the best possible way. Moreover, for
dealing with unexpected pandemic firm needs team which works with proper co-ordination.
Benefits:
 High flow of communication and interaction among team members
 Encourage team-building practices and high motivation (Baskoro and et.al., 2021)
Drawbacks:
 Riskier in nature which might affects business results badly
 Creates pressure on leader because need to lead through an example

4. Recommending suitable leadership style to Ryanair which helps in meeting business
objectives
By doing analysis, it has found that currently business unit is following autocratic and
transformation style which contains both benefits as well as drawbacks. As, in autocratic
style, morale and motivation level personnel is affected negatively. Further, transformational
style of leadership encourages risky behaviour which leads ignorance of organizational
protocols. Thus, for avoiding such negative impacts Ryanair is advised to follow the
combination of transformational and democratic style of leadership for achieving success.
The rationale behind this, now for attracting customers and gaining top position in the
industry firm do changes in the current framework more frequently. In this, prompt decision
making can be ensured through the means of transformational style. Further, transformational
style also helps in motivating personnel in relation working collaboratively during pandemic
(COVID-19). In addition to this, Ryanair can get innovative solution, under participative
leadership for coping up with sudden crisis (pandemic) through involving personnel in
decision making process.
According to the views of Abeywardena, Rathnayake and Bamunusinghe (2020), in
democratic style, leaders encourages personnel to actively participate in decision making
aspects. This leadership style is highly flexible in nature and facilitates decentralized decision
making to subordinates. It invites innovative ideas as well as opinions of personnel by
allowing free flow of communication and thereby facilitates quality decisions. However, on
the critical note, FAKHRI and et.al., (2021) said that inclusion of democratic leadership style
results into delay in decision making and in-disciplinary activities. Moreover, in this, leader
take time to arrive to consensus due to the inclusion of more employees in decision making.
Nueno and Zhu (2020) found in their study that leaders can increase both employee’s and
organizational productivity by getting creative solutions. The rationale behind this,
employees feel motivated when they are involved by management team in decision making.
In this way, such leadership increases employee morale, motivation and performance to the
significant level. On the contradictory note, Albers and Suwala (2021) depicted that
democratic style leads communication gap and confusion among members. Moreover,
different people have varied perception and opinion about matters in discussion. Nopriyanto
(2021) shared their views that participative leadership facilitates the achievement of
organizational goals by increasing morale and motivation of employees. In this, personnel
feel that organization considers them in the valuable category.

Baskoro and et.al., (2021) identified that under transformational style employees are
intrinsically motivated for achieving goals. In this, leader makes effort in relation to change
perception, expectation and motivation of personnel. Khatri, Dutta and Kaushik (2021)
argued that desired outcome can be attained through such leadership style only when
communication takes place between team and other members continually. Further,
sometimes this leadership practice requires constant feedbacks so that undesirable activities
can be avoided timely. Mansyah and Rojuaniah (2021) assessed that transformational style
helps in creating enthusiasm among personnel through focusing on ongoing earning practices.
Along with this, it helps in managing change by converting low-morale situation into the
positive one by relying on ethical values.
On the basis of secondary data assessment, it can be depicted that selected leadership
styles such as democratic and transformational proves beneficial for Ryanair. As, both the
leadership styles contributes in the enhancement of employee morale, motivation,
productivity and profitability. Further, by practising these styles Ryanair can fosters creativity
and innovative practices within organization by giving autonomy for doing their jobs. By
doing this, company can achieve its goals and objectives within the suitable time frame.
5. Commenting on social responsibility, Response and Obligations in Ethics with regards to
Ryanair
In the competitive business world, firm can attain success only when it fulfils the
expectations of various stakeholders. Hence, Ryanair has accountability to take significant
measures which contributes in the welfare of society and other stakeholders. In order to
being competitive and increasing brand image Ryanair focusing on safety & quality, energy
efficiency, environment as well as carbon emission, ethical transparency and corporate
governance.
Responsiveness, responsibility and obligations: Social responsibility may be served
as an ethical framework which imposes obligation in front of firm for doing activities in such
a manner that offers benefit to others. Earlier, company faced several issues pertaining to
CSR which in turn directly impacted brand image. Along with this, company also failed to
serve appropriate or correct information to the customers about service. In the context of
Ryanair, business unit is showing active response by investing in new aircraft and highly
advanced technology (Ryanair Environmental, Social & Governance (ESG) Policy, 2021).
This in turn helps firm in minimizing the negative impact of business operations on

environmental aspects. In the category of sustainable operations, Ryanair is recognized as
industry leader due to the improvement in environmental performance continually.
Furthermore, for fulfilling obligations towards customers firm launched AGB (Always
getting better) for improving customer interaction, experience and thereby satisfaction level.
Hence, by providing all the required information to customers firm can make their travel
more productive and comfortable. Now, by keeping in mind the aspects of COVID-19
company made several arrangements for customer’s and employee’s safety.
Apart from sustainable operations, business organization also tool several initiatives
for encouraging sports, children education and other activities that helps in building good
society. Company offered both financial and no-financial support to Ireland Cerebral Palsy
Football team for world-cup held in 2019. Along with this, Ryanair organized surprise party
and trip for children suffering from chronic disease. Hence, company is making
commendable efforts for the welfare and growth of children by co-ordinating with other
charity firms. Company’s CSR announcement and reports clearly exhibit that firm is placing
more emphasis on investing funds in R&D so that innovative technologies can be found. In
addition to this, for fulfilling responsibilities towards stakeholders company is preparing and
publishing corporate governance or CSR report by including fair views about performance,
By this, company can fulfil its passion towards sustainable operations and thereby achieves
growth and business objectives significantly.
CONCLUSION
By summing up this report, it can be concluded that Ryanair needs to focus on
technological aspects and sustainable operations for getting competitive edge. Along with
this, it can stated that company has created wide network and maintained lower price which
contributes in organizational success. It can be inferred from the evaluation that currently
business organization is following transformational and autocratic leadership style. Further, it
has assessed that firm can get innovative ideas for business success through practising
democratic leadership style. In addition to this, by involving personnel in decision making
Ryanair can implement change prominently. It can be seen in the report that Ryanair is taking
significant measures for complying with social accountabilities, ethical aspects and
obligations. This will positively aid in the brand image, market share, customer base,
profitability and overall success.

REFERENCES
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Nopriyanto, W., 2021. Human Resources Education in the Transportation Sector. KnE Social
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