The Economics of Low Cost Discounters Paper 2022

Running head: THE ECONOMICS OF LOW COST DISCOUNTERS
The Economics of Low Cost Discounters
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THE ECONOMICS OF LOW COST DISCOUNTERS1
EXECUTIVE SUMMARY
This paper intends to analyse the growth and performance of the low cost discounter airline
Ryanair. The assessment of the Ryanair undertake on the basis of SWOT analysis, porter’s five
forces, PESTEL analysis, cost-volume-profit relationships and cost benefit analysis. Hence, it
helps in understanding the overall position of the airline including its internal and external
environment. It will assist the firm to take necessary steps to sustain in this competitive low cost
airline industry.

THE ECONOMICS OF LOW COST DISCOUNTERS2
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
SWOT..........................................................................................................................................3
PESTEL.......................................................................................................................................5
Porter’s Five Forces.....................................................................................................................6
Cost-benefit Analysis and Cost-volume-profit relationship........................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

THE ECONOMICS OF LOW COST DISCOUNTERS3
Introduction
The Ireland based low cost airline Ryanair founded in 1984. Despite being the largest
airline of Europe in terms of scheduled passenger flown in 2016. The firm faced various
challenges in competitive market of low cost airlines (Caputo, Borbély and Dabic 2019). Thus,
inclusion of the essential tools such as SWOT, porter’s five forces, PESTEL, cost benefit
analysis and cost volume profit relationship helps to examine the present and future position of
the Ryanair. The internal and external factors can be analyzed based on SWOT. The macro
environment of the company that is influenced by the external factors can be examined with the
help of PESTEL. The competitive environment of the Ryanair is assessed based on Porter’s five
forces. In order to analyze the decision related to the business the cost benefit analysis and cost-
volume-profit relationship will be helpful.
Discussion
SWOT
The competitive position of the company is affected by the internal and external factors
(Phadermrod, Crowder and Wills 2019). Thus, SWOT analysis will prove beneficial for the
Ryanair.
Strengths
 One of the major strength of the company is operating in European market, which covers
more than 1800 routes and 200 destinations.
 The consistent shareholders returns and robust balance sheet acts in favor of the
company.
 The company get its key competitive advantage by offering low cost airlines.