Ryanair Business Case Study

This report analyzes Ryanair's business performance, utilizing SWOT, PESTLE, and Porter's Five Forces models. It examines the company's industry data, key stakeholders, and challenges, highlighting areas for improvement in resourcing and management. The report provides insights into the competitive landscape of the airline industry and Ryanair's strategies for success.

FOUNDATION OF
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Industry data.......................................................................................................................1
2. Key businesses and stakeholders and challenges faced by company.................................2
3. SWOT and PESTLE Analysis............................................................................................3
4. Analysing competitive strength by implementing Porter's Five Forces Model.................4
5. Identifying issues related to resourcing and management..................................................5
6. Reflection...........................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Airline business is one of the most profitable business for UK injecting economy as a
whole. Present report deals with Ryanair engaged in low-cost carrier. SWOT, PESTLE and
Porter's Five Forces model are applied. Along with it, key issues faced by the company in its
management and competitors are assessed.
1. Industry data
Business starts its operational activities in order to attain profits and to provide higher level of
customer satisfaction so that they may become loyal to the organisation. It is essentially required
that company should perform well and earn profits which would help in sustaining in the market
and accomplish desired share. Thereby, competitors' can be outreached and business can garner
profits. Airline industry is one such sector which generates higher amount of revenue and
satisfies passengers up to a high extent. Ryanair engaged in same sector is a low-cost airline
which is an Irish based firm that is primarily specialised in short-haul landings or flights.
Organisation earns good income as customers are attracted to the organisation because of lower
charges applied by company (Lawton, 2017). Furthermore, it is headquartered in Dublin Airport,
Ireland and operational base in Dublin Airport and London Stansted Airport as well. Ryanair is
the largest low fare firm in Europe with nearly having more than 950 routes to Europe and
Morocco. The passengers' strength was 67 million in the financial year 2009 along with
employees' strength more than 6000.
Aviation industry of UK is one of the largest across world with earning good quantum of
revenue. It is evident from the fact that international companies to low-cost airlines are operating
in the country with maximising revenue too many heights. This is also applied to Ryanair which
is operating in low frill sector and other competitor is EasyJet Ltd giving tough competition to it.
The firm is also the biggest firm in terms of passengers flown and customer base. The statistics
show that in 2015, around 2.2 million tonnes with reference to international freight were
handled. On the other hand, 49000 tonnes were handled in domestic freight. This implies clearly
that aviation industry is one of the important parts in injecting overall growth of UK.
Ryanair was found in the year 1984 by Christopher Ryan, Liam Lonergan and Tony
Ryan. In the financial period 2016, it was the largest European firm in terms of passengers and
furthermore, international travellers flown more than any other low-cost airline which is an
1

achievement for company. The rapid expansion was made after the deregulation of airline sector
in Europe in 1997. Ryanair has been performing well not only in terms of the largest airline with
reference to passengers' flown but also financially well. The operating revenue was 5034.7
million Euros in 2014 which increased to 5654 in 2015. It was further maximised to 6535.8 in
2016 and reached to 6647.8 in the financial year 2017. This means that company is performing
extremely well as it is highlighted by condition as per financials. The number of employees have
increased in the recent years which shows collectively that company is performing better in
market and garnering revenue (de Wit, 2017).
2. Key businesses and stakeholders and challenges faced by company
The business is performing better as customers are satisfied and garnering a good amount
of income. Key operational businesses are Ryanair Sun, Laudamotion Organisation. Both the
businesses are subsidiaries of Ryanair. In relation to this, Ryanair Sun is a Polish charter line
headquartered in Warsaw, Poland. Organisation is operating activities on the behalf of tour
operators in Poland and Boeing 737-800 named aircraft that was transferred from Ryanair in the
month of March 2018. The firm is engaged in providing quality charter services at an affordable
fare on popular destinations. It has started in the recent era and main aim of firm is to provide
better airline services to passengers.
On the other hand, firm has another subsidiary which is providing services in the same
sector named as Laudamotion which is primarily an Austrian aviation firm based in Vienna. It is
owned by Niki Lauda, a popular name in Formula 1 race. In March 2018, Ryanair has announced
that it would have staked in the business as it would acquire 24.9 % of company. This will give
Ryanair to effectively reach at a mark of fleet of 30 aircrafts. These were key businesses of the
organisation that would help in earning maximum quantum of revenue within the shortest
possible time. Main competitors' of Ryanair are EasyJet and Monarch Air Group. EasyJet is the
biggest airline in low-cost carrier and has more employees nearer to 400. It also offers tickets at
affordable prices beating rivals quite effectually. On the other side, Monarch Air Group is
primarily in travel agency and is a tough competitor of Ryanair in terms of revenue as it
produces more than $6.6 billion which is remarkable and is regarded as top competitor of firm. It
is required that Ryanair constructs and implements well-structured strategies to outreach the
rivals (Dobruszkes, Givoni and Vowles, 2017).
2

The performance of company has been incredible as net income has reached to 1.145
billion euros and revenue is 7.151 billion in 2018. These key performances indicate that firm is
leading the market on front ahead of competitors. It will be able to reach to more heights in the
future course of action. In relation to this, total assets in 2018 has gone to 12.36 billion and total
liabilities are 4.469 billion in the same year. This clearly shows that firm is attaining a good
amount of income and net worth has also increased up to a high extent. On the contrary,
customers are increased as business is providing services on low-cost basis and so, organisation
is garnering high amount of revenue. The low prices easily attract passengers who have low
budget to travel and want to save money. In relation to this, demand of public has considerably
increased and thus, organisation is earning well by satisfying customers who want to travel on
low fares. For customers, data mobile app has been launched to effectively buy tickets and has
redesigned its website which was having many technical issues (Caputo, Borbély and Dabić,
2018).
The suppliers of Ryanair are Boeing and Airbus. These suppliers are providing better
quality aircraft to organisation. However, main supplier is Boeing as company have ordered 200
aircraft in the financial year 2014. This means that suppliers are giving quality of products to
organisation. In contrast to this, strengths of company are numerous. High profit margins are
achieved, economies of scales are achieved. On the other hand, low-cost strategy is another
strength which has garnered profits in the best possible manner. It helps to save on fuel and
maintenance expenses on single fleet effectively saves costs in a better way. This means that it
has remarkably operating better in European market. Furthermore, 94 % of bookings are made
on online basis, thereby saving costs up to a high extent.
Weaknesses of Ryanair is that it uses secondary airport and that are far off from city
centre and as such, customer faces difficulties. This means that bad services are provided which
requires lot of innovation by the company. Furthermore, Ryanair mainly focuses on seasons to
earn profits which should be evaluated in a better way. The challenges faced by organisation are
competition from British Airways and American Airlines is increasing which is a challenging
task for organisation so as to remain profitable in the market. Moreover, exchange rates are
fluctuating as well (Efthymiou and Papatheodorou, 2018).
3. SWOT and PESTLE Analysis
3

SWOT analysis of Ryanair
Strengths:
Ryanair is the first low-cost airline model established in Europe. In the Europe region it is
the largest airline transport firm more passenger than any other airline. The lowest fare is the
biggest strength of Ryanair than any other airline, hence the organisation has the large amount of
expertise in the European market. Due to the large size, the organisation is able to keep its fare
price lower than other company in market. Ryanair also provide facilities of online reservation to
the customers, this helps the customer to manage their itineraries without any problems of extra
travel agent cost. Ryanair stable financial performance enables the market growth and to
eliminate the competition. The company has an advantage as it only operates point to point flight
within short distance location (Moir and Lohmann, 2018).
Weakness:
Ryanair despite of being more successful aviation company than other company in
European market, its cost consciousness creating a series of problem. Even after being regular
growth of the business, its brand reputation is not favourable in the latest surveys and also being
accused for poor customer services and tricky service agreement to attract the customers. The
inappropriate timing of flights to lower the cost is creating problem to attract the higher business
passengers. For the aviation industry in general Ryanair are highly seasonal, with profit highly is
summer and less in winters. Aviation industry also includes services like cargo and maintenance
but Ryanair is not diversifying into other complementary segments.
Opportunities:
Ryanair is having variety of opportunities to sustain its growth despite of having
uncertainty. Currently the aviation market is dominated by the traditional airlines which are
having higher cost structure than the company which are following low cost model. But the
analyst suggested that the demand for long-haul flights may be increase in the future, so there
might be growth opportunities for Ryanair. With rapid increasing in the low-cost airline industry
in Europe market, Ryanair has implemented many programmes to improve its customer service
and to outperform from rival firms (O’Connell and Connolly, 2017). It includes the re-designed
website with more attractive look and more customer friendly, launching of new mobile

application and reducing the baggage restrictions. Ryanair is adding more primary airports to its
network and is increasing the operations on more business oriented routes.
Threats:
Currently Ryanair is in advantage of more disciplined and continuous growth in its
market. Any loss in the discipline among competitors could threat the advantage the Ryanair is
having. Apart from the growth plan there are certain factors which can not be controlled or can
predict such as fuel prices, change in currency, terror threat or economic recession. Change in
price elasticity the air travel taxes can reduce demands. Threat of competition from other low
cost regional carriers (Urban, Klemm, Ploetner and Hornung, 2018). As mentioned earlier,
Ryanair has a strong safety record still there are assumptions by the media that the low-cost
approach of company can affect the safety corner. These assumptions could be harmful to the
reputation of Ryanair.
PESTLE analysis of Ryanair
Political:
Political outcome of the UK and European country could reduce European airlines to
excess in UK market. Ryanair is registered in Ireland, any unfavourable outcomes could
negatively influence the low-cost airline operation including Ryanair. The trade union pressure
on airline industry can make government to increase and decrease in the cost. Government
policies like change in securities at the airport could change in the cost as airlines has to increase
the cost in security sector. With the expansion of European countries there could be change in
the routes at different airports. Different countries have different tax policies this could change
the efficiency and the route of the industry. Frequent terror attack in Europe will also affect the
air travel demand which have direct impact on Ryanair.
Economical:
The economical condition of the country has great impact on the aviation industry of the
country, after the leave of UK from Europe there are certain chance of recession in UK which
will affect the low-cost earning airline in UK market (Morlotti, Cattaneo, Malighetti and
Redondi, 2017). With the change in economical condition of a country changes the business
activity also get reduced and hence the number of passengers for a specific destination will also

reduce which ultimately cause loss to the company. Economic changes in the country could
make the customer to switch to other substitutes like high speed trains. Ryanair is in the
advantage state as the financial crisis reduced the number of options to air passengers. With the
cutting in the cost of business and private passengers more passengers will opt for Ryanair as a
low-cost airline.
Social:
Since the low cost airline are there like Ryanair, air travel is no longer an expensive or
luxury item. Short holidays has become a trend in European countries which results in travelling
in plane is available for larger public. The consumer safety is become the important factor in
airline industries. If passengers do not feel safe they will not board for the particular airline.
Ryanair is an Irish company and the staff is very humble and polite, the airline provide good
ground and in air services to the passengers. It will help the company to attract more customer
due to its good hospitalities and low cost.
Technological:
With the social changes and the customer preferences in the airline industry, its clear that
those companies will survive who willing to change the technology as per the demands. In the
Illustration 1: Source: news.sky.com

era of the digital marketing the customers have the desire to remain constantly connected with
the social environment, thus airlines needs to adopt different communication strategies to reach
the customers. Ryanair has already launched the social websites and mobile application. These
are the new generation technology which is consumer friendly and time saving. The airlines also
provides the facilities of audio songs and move on LED during the flight so that the passengers
can enjoy their flights (Grant, 2017).
Legal:
In the Brexit scenario Ryanair have to deal with different regulation of UK and Europe,
which may results in suspending its UK flights. IATA is the international air traffic agency
which has made some rules and regulations for all the airline companies across the world. The
airline has to face many airport ownership issues as many are under government and many
airports are completely privatized, it can affect the operating cost of the company. Different
countries have different employment laws like minimum wages to be given to the employee,
working hours for the pilots etc.
Environmental:
Ryanair Organisation is required to initiate control on CO2 emission, fuel burn by at least
to 4 %. It is needed that firm adopts new technology so as to save environment from these types
of harmful gases. Hence, such factors are needed to be taken into consideration by company to
sustain in market.
4. Analysing competitive strength by implementing Porter's Five Forces Model
Rivalry
The rivals are increasing and profits are reducing due to division of market share.
Moreover, firms like Monarch Air Group, Easy Jet are giving cut-throat competition to firm
(Soyk, Ringbeck and Spinler, 2017).
Threat of substitutes
There are numerous substitutes available to the customers such as travel through sea,
railway network, by road which costs the same to passengers. On the other hand, train services
are one of the main threat to company as it is having low cost prices among other substitutes.

Main reason is that Eu-rail connects almost all part of Europe which is speedy to travel in such
option.
New entrant threat
The new entrants are low in the industry as Ryanair follows cost leadership strategy
which is difficult to beat by new firms. Moreover, entry barriers are high in Europe because of
high operational requirement in terms of capital, maintaining price at stipulated margin.
Bargaining power of suppliers
The bargaining power is high because of few suppliers of aircraft in the market. It is
evident from the fact that firm has main supplier like Boeing and Airbus. In relation to this,
switching expenditures are more. Ryanair is loyal to Boeing and bargaining power is more.
Bargaining power of customers
It is high in the airline sector mainly in low-cost carrier. The customers demand for more
low prices which are then fulfilled by rivals namely Virgin Express, Easy Jet leading to alleviate
profits in effective manner. Moreover, in cost leadership strategy, buyers takes crucial position
and leading to cheap prices charged by firm (Halpern, 2018).
5. Identifying issues related to resourcing and management
There are key issues faced by the company are mainly employment relations. The labour
unions was not recognised by firm. New employees are refused to get share in company and as
such, it is required that Ryanair should resolve the same. In relation to this, organisation has also
faced criticism for charging high training costs to pilots and force to work through an agency in
the company (Ryanair staff brand company a 'disgrace' over handling of issues. 2017).
Furthermore, customers are not happy with the services as they feel, organisation is focusing too
much on cost cutting and not providing necessary facilities which should be given to them. It is
also criticised on the grounds that disabled passengers are treated badly by it. Organisation
refused to provide wheelchairs at London Stansted Airport in 2002 year gaining anger in
passengers.
The criticism was also made on misleading customers through false advertisement.
Classic case was that it placed name of city on the far off situated airports which were not for
tourist traffic and no link to main city. On the other hand, firm was criticised and ordered by

ASA to stop advertising that it take less travel time than rail connection Eurostar. However, it
stood over all claims saying that its flights were faster (Barrett, 2017). The surcharges were also
allegedly charged high as claimed by passengers. The management is required to take all such
feedbacks to improve upon the situation.
6. Reflection
I have learnt all main points covered in Business case study on Ryanair. I have effectively
analysed performance of organisation and able to grab analytical skills. Moreover, my
communication skills are enhanced in a better way. Furthermore, I'm able to perform well and
development skills and related skills are improved. Hence, required skills are attained by me.
CONCLUSION
Hereby it can be concluded that Ryanair is performing exceptionally well in the European
market and is required that more queries of customers must be solved. Furthermore, employment
relations should be made strong which will initiate more efficiency in its operational tasks.

REFERENCES
Books and Journals
Barrett, S. D., 2017. How do the demands for airport services differ between full-service. Low
Cost Carriers: Emergence, Expansion and Evolution. p.137.
Caputo, A., Borbély, A. and Dabić, M., 2018. Building theory on the negotiation capability of the
firm: evidence from Ryanair. Journal of Knowledge Management.
de Wit, J. G., 2017. The growth limits of the low cost carrier model Jaap G. de Wit”, Joost
Zuidberg. Low Cost Carriers: Emergence, Expansion and Evolution. p.383.
Dobruszkes, F., Givoni, M. and Vowles, T., 2017. Hello major airports, goodbye regional
airports? Recent changes in European and US low-cost airline airport choice. Journal of Air
Transport Management. 59. pp.50-62.
Efthymiou, M. and Papatheodorou, A., 2018. Evolving airline and airport business models. The
Routledge Companion to Air Transport Management. p.106.
Grant, R., 2017. Ryanair: matching the activity system to the strategy. The Business &
Management Collection.
Halpern, N., 2018. Airport business strategy. The Routledge Companion to Air Transport
Management. p.154.
Lawton, T. C., 2017. Cleared for take-off: structure and strategy in the low fare airline business.
Routledge.
Moir, L. and Lohmann, G., 2018. A quantitative means of comparing competitive advantage
among airlines with heterogeneous business models: Analysis of US airlines.Journal of Air
Transport Management. 69. pp.72-82.
Morlotti, C., Cattaneo, M., Malighetti, P. and Redondi, R., 2017. Multi-dimensional price
elasticity for leisure and business destinations in the low-cost air transport market:
Evidence from easyJet. Tourism Management. 61. pp.23-34.
O’Connell, J. F. and Connolly, D., 2017. The strategic evolution of Aer Lingus from a full-
service airline to a low-cost carrier and finally positioning itself into a value hybrid
airline.Tourism Economics. 23(6). pp.1296-1320.

Soyk, C., Ringbeck, J. and Spinler, S., 2017. Long-haul low cost airlines: Characteristics of the
business model and sustainability of its cost advantages. Transportation Research Part A:
Policy and Practice.106. pp.215-234.
Urban, M., Klemm, M., Ploetner, K. O. and Hornung, M., 2018. Airline categorisation by
applying the business model canvas and clustering algorithms. Journal of Air Transport
Management.
Online
Ryanair staff brand company a 'disgrace' over handling of issues. 2017 [Online] Available
Through: <https://www.theguardian.com/business/2017/sep/22/ryanair-pilots-michael-oleary-
cancellations>