Business Environment of Ryan Air

This paper provides a detailed analysis of Ryan Air's business environment using PESTLE, Porter’s Five forces and SWOT analysis. It also includes a skill development plan for Ryan's management and employees.

Running head: BUSINESS ENVIRONMENT OF RYAN AIR
Business Environment of Ryan Air
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction:....................................................................................................................................3
Task 1:.............................................................................................................................................3
Part a. Ryan’s history and business objectives:...............................................................................3
Part b. PESTLE, Porter’s Five forces and SWOT:..........................................................................4
PESTLE of Ryanair:....................................................................................................................4
The following is the PESTLE analysis of Ryanair:.................................................................4
Political:...................................................................................................................................4
Economic:................................................................................................................................5
Social:......................................................................................................................................7
Technology:.............................................................................................................................7
Legal:.......................................................................................................................................8
Environmental:........................................................................................................................8
Porter’s five forces:......................................................................................................................9
Threats of new entrants:...........................................................................................................9
Threats of substitutes:............................................................................................................10
Bargaining power of customers:............................................................................................10
Bargaining power of suppliers:..............................................................................................10
Industry rivalry:.....................................................................................................................11
Porters Value Chain analysis and SWOT of Ryanair:...............................................................11

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Porter’s Value Chain:............................................................................................................11
SWOT analysis of Ryanair:...................................................................................................12
Part c. Ansoff Matrix:....................................................................................................................13
Task 2: PPT (Attached).................................................................................................................14
Task 3:...........................................................................................................................................14
Part a. Current skills, abilities and experience of Ryan’s management and employees:...............14
Part b. Future skill development plan and SMART analysis:.......................................................16
SMART analysis of the activities:.............................................................................................16
Conclusion:....................................................................................................................................18
References:....................................................................................................................................19

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Introduction:
Business health of a company can be judged on various parameters like revenue
generation and market position. The aim of paper would be reviewing the business health of an
origination and then propose activities to deal with a recognized health issue. The company
considered for the study is Ryanair, the Irish low cost carrier based in Dublin. The paper is
divided into three sections. The first section delves into a PESTLE analysis of the airline industry
followed by a Porter’s five forces analysis. This would followed by a SWOT analysis based on
Porter’s value chain. The second task would be a PPT presentation while the third task would
would with skill development at Ryanair.
Task 1:
Part a. Ryan’s history and business objectives:
Ryan Airlines is an Irish airlines company having its headquarters in Dublin which was
founded in 1984 by Tom Ryan. The airline company is a public limited company listed on the
Irish Stock Exchange, London Stock Exchange and NASDAQ. The company started operating in
the year 1985, thus ended up breaking the duopoly Aer Lingus. The directors of the company
acquired 85 percent share in London European Airways, thus expanding the capital of the
company. Ryan Air took advantage of the deregulation of the European Union and expanded into
North America and got listed on NASDAQ to tap the American capital market.
The short term objectives of Ryan Airlines is to earn high revenue by serving maximum
number of passenger. The company holds high position in the global airlines industry which is
evident by the facts like 130 million passengers it carries annually and 32 years high level
passenger safety standards. Ryan Airline holds high position in punctuality and enables

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customers to save more money by its customer intensive price packages (corporate.ryanair.com
2018). The long term objectives of the airline company is to retain these high positions and
emerge as a market leader in the global aviation industry.
Part b. PESTLE, Porter’s Five forces and SWOT:
PESTLE of Ryanair:
The following is the PESTLE analysis of Ryanair:
Political:
The political factors which impact the operations of the aviation sector are the
international air sharing agreements between their home countries and host countries. Since, the
airlines companies operate flights across international borders, these companies have to abide
by airspace agreements between countries. The Irish Aviation Authority regulates the safety
aspects of the air travel within the country (iaa.ie 2018). The airlines companies like Ryanair
have to abide by regulations laid down by the International Civil Aviation Organization, the
aviation arm of the UN which lays codes and practices for passenger safety (icao.int 2018).
The second political which impacts the airlines industry is bilateral relationship between
government and pacts between them pertaining to freight and taxes. The Government has signed
a global tax agreement with other European countries which would allow them to share financial
data of the customers. The agreement has included non-European countries like China, which
point out to the growing bilateral ties between European and Asian governments (independent.ie
2018).

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Opening of markets to foreign countries have largely boosted the aviation industry. For
example, the opening of the European market allowed European aviation companies like Ryan to
enter into North America and get listed on NASDAQ. This analysis shows that opening up of
markets enable the aviation companies to get access to economic resources of foreign countries
(investor.ryanair.com 2018).
Political threats to aviation companies like Ryanair are terrorist attacks on aircrafts and
hijacking (news.bbc.co.uk 2018). These incidences pose threats to security of both passengers
and onboard crew members. Political moves like Brexit also threat the business generation of the
aviation companies (irishtimes.com 2018).
Economic:
The first economic factor which impacts the aviation industry is the international
currency exchange rates. This is because international operations form a major portion of their
operations and thus have to accept and may payments in various foreign currencies. Moreover,
the leading companies like Ryanair are dependent on international currency rates for investing in
the foreign companies, which paves ways for their capital base strengthening
(investor.ryanair.com 2018).. The graph below shows the rising international exchange rate of
EU, the currency of Ireland compared to two international currencies USD and INR. The graph
shows that though the value of EU is more than both the currencies, the rate of USD is more
compared to INR. This means that the Irish airlines company can acquire assets in Asian markets
at lower rates and thus earn more profits. Again, selling in the American market would be more
profitable. This analysis shows that exchange rates have great impact on the investments and
financial transactions of aviation companies (Boehmer, Fong and Wu 2015).

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Figure 1. EUR: USD 5 years graph
(Source: bloomberg.com 2018)
The second economic factor which impacts the companies operating in the aviation
companies is the resources available in their home and host countries. The aviation industry
requires highly trained staffs to operate in the market. The aviation institutes in the markets like
Europe and North America provide them with trained staffs at various levels like pilot and
ground duty officers.
The aviation companies require immense capital to operate in the market. The markets of
Europe and North America have some of the largest stock exchanges in the world like NYSE,
LSE and ISE which allow these airlines to get listed and generate immense capital from these
markets. Moreover, these markets provide the aviation companies an immense network of
international banks and financial instates which provide financial assistance to these companies
(Kwan, Masulis and McInish 2015). These strong financial bases enable the top aviation

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companies acquire air craft making firms around the around and expand their asset bases
(Sornette 2017). This global network of financial and human resources also pose certain threats
to the aviation companies like Ryanair. For example, economic breakdown in one market can
impact the other market and the international operations of the airline companies as well.
Thirdly, the opening of the global aviation market has enable the airlines companies resident to
particular markets to enter into pacts to compete with airline companies of other markets. For
example, the Oneworld is an alliance formed by companies like American Airlines, Cathay
Pacific and Qantas to command the western air lines market (oneworld.com 2018). These
alliances pose competitive threats to the individual airlines companies and increases chances of
their market capturing.
Social:
The social factors impacting the airlines industry are the increasing preferences for air
travel among passengers and increasing income of consumers. The increase in income of the
people in markets like Asia has made it possible for more people opt for air travel which has
boosted the business of the airlines companies. This social development has boosted expansion
of markets of airlines companies into emerging markets like Asia and South America, thus
maximizing their revenue. Moreover, the passengers today prefer safety and comforts as
important aspects while opting for traveling. This social mindset has expanded the customer of
the airline companies. Development of technology has led to increase in access of customers to
flight details and enables airline companies acquire new customers all over the world (Bilotkach,
Gaggero and Piga 2015).

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Technology:
Airline industry is a highly technology intensive industry which is dependent on the level
of advanced technology available in a market for smooth operation and growth. The airlines
companies today float shares online to generate huge capital. Similarly the sell ticket online
which generate huge revenue. Moreover, their safe flying of flights and their management are
totally dependent on advancement of technology like radar, weather forecast technology and
communication between different airports in case of requirement for emergency landing
(Kolkoori, Wrobel and Ewert 2015). Technological advancements in fields of information and
communication technology have succeeded in ensure safety of passengers. However, technology
cannot provide total protection against accidents and there have been reports when planes met
with massive accidents due to poor visibility (abcnews.go.com 2018).
Legal:
The aviation industry is an international industry and the airline companies like Ryan
operate in several countries besides their home countries. Their international operations are
directed and controlled by aviation laws both nationally and internationally. The flights while
flying have to follow policies pertaining special use airspaces like prohibited areas and military
operation areas. They airline companies while carrying out their business operations also have to
follow laws pertaining to important areas like accounting. For example, European companies like
Ryanair have to abide the European Financial Reporting Advisory Group while accounting
their financial transaction from all over the world (efrag.org 2018).
Environmental:
The environmental factors have deep influence on the business operations of the aviation
companies like Ryanair. The aircrafts give out huge quantities like carbon dioxide, sulphur

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dioxide, water vapour, dust particles and other deadly pollutants while flying which are
responsible for devastating climatic changes and global dimming. The bodies like ICAO have
suggested technological advancements in the aircraft engineering like use of carbon fibre
reinforced polymer to reduce carbon emissions. However, due to increase in the number of low
cost flights and failure of various airport authorities aviation industry still poses environmental
threats (Huang et al. 2016).
Figure 2. Graph showing carbon dioxide emission in aircrafts
(Source: ec.europa.eu 2018)
Porter’s five forces:
The following is the analysis of the aviation industry using Porter’s five forces:

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Threats of new entrants:
An analysis of the global aviation industry clearly shows that all the airline companies
come under the influence of threats of new entrants. The economic analysis above shows that
opening of the global market, airline companies can acquire foreign airline companies or form
aviation group with them to enhance their competitive advantage. These factors pose immense
threats to the resident companies and their market share (telegraph.co.uk 2018).
Threats of substitutes:
The airline companies today come under the influence of threat of substitutes like
presence of companies having identical airline packages. The increase in demand for low cost
flights among the travellers have propelled their revenue generation of the low cost airline
companies like Ryanair. These low cost airline companies are providing comfortable passenger
services are emerging as substitutes to high cost airline service providers like British Airways
(corporate.ryanair.com 2018).
Bargaining power of customers:
The availability of large number of low cost carriers have increased the bargaining power
of the consumers in the airline industry. The passengers today demand safety as well be comfort
and affordability. The leading airline companies have incorporated these needs of the consumers
in their product strategies to make more lucrative packages for customers and generate higher
revenue (telegraph.co.uk 2018).
Bargaining power of suppliers:
The suppliers to the aviation companies today like suppliers of labour and financial
assistance enjoy low bargaining power due to high competition among themselves. For example,
the aviation institutes which provide the aviation industry with human resources have to face

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serious competition because there are several institutes which prevents individual institutes from
gaining command over the aviation industry (Card et al. 2018).
Industry rivalry:
There exists serious rivalry among the airline company both in the premium and the low
cost market. For example, American Airlines and British Airlines compete in the premium flight
service while the low cost airline companies like AirAsia and Virgin America fight in the low
cost airline market (independent.ie 2018).
Porters Value Chain analysis and SWOT of Ryanair:
Porter’s Value Chain:
The Porter’s value chain categorises the business activities into two categories namely,
primary activities and support activities. They are inbound logistics, operations, outbound
logistics, marketing and services. The graph below shows the increasing profits of Ryanair which
ultimately points out to the operational effectiveness of the company. The company owns a
strong inbound logistics and markets its passenger packages aggressively which is evident from
the large number of customers who use its services for international travel. The analysis shows
that Ryanair has strong primary activities which points out to strong support activities. The
support activities consist of procurement, human resource management, technological
development and infrastructure. The presence of Ryanair in 36 countries and operation from 210
airports point out to the strong infrastructure of the company. The airline company employees
over 13000 employees which shows its human resource acquisition and retention power
(corporate.ryanair.com 2018).

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Figure 3. Graph showing revenue generation of Ryanair
(Source: investor.ryanair.com 2018)
SWOT analysis of Ryanair:
Strengths:
1. Financially very strong evident form
its annual report.
2. Enjoys large market share in the
international market.
3. Acquires and maintains highly skilled
talented staff.
4. Follows high level of risk
management evident from low number
of accidents encountered by the
Weaknesses:
1. Enjoys smaller market compared to its
competitors like British Airways.
2. Have very weak presence in markets
beyond Europe and North America.
3. There have been reports of the
company violating laws in various
host countries like France.

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aircraft.
Opportunities:
1. Expand into Asia and strengthen its
market position.
2. Form business groups with other
airlines companies to increase market
competitiveness.
3. Get listed on Asian stock exchanges to
generate capital for its Asian
operations.
Threats:
1. Weaker market presence compared to
its strong competitors British Airways.
2. Airline groups formed by competitor
airline companies.
3. Terrorist threats and attacks.
4. Increasing data thefts attacks on
airline databases (theguardian.com
2018)
Part c. Ansoff Matrix:
New Markets Market development:
1. Expansion into new
markets like Asia with
existing packages.
Diversification:
1. Entering new markets like
Asia and South America with
new products like low cost but
high comfort flight packages.
Existing
markets
Market penetration:
1. The company must
promote its products more
aggressively in the UK, its
existing market.
Product development:
1. The airline company must
introduce new products in its
present European market to
attract new customer base like
special packages for corporate

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travellers
Existing products New products
Task 2: PPT (Attached)
Task 3:
Part a. Current skills, abilities and experience of Ryan’s management and employees:
The high level of current skills, competencies and high level of experience of the staff
members at Ryanair is evident from the high market position and increasing revenue generation
of the company (Card et al. 2018). The Porter’s Value chain analysis conducted above shows
that the airline company serves in more than 30 countries from 210 airports. The revenue
generation of the company also shows an upward trend. One can infer on reviewing these facts
that the staff especially the onboard crew members of the company are capable of adapting to the
market conditions of these countries. Moreover, the plummeting revenue generations means that
Ryanair employees are able to create customer satisfaction. Thus, this review reveals that the
staff members of Ryaniar have the abilities to cater to passengers across borders
(corporate.ryanair.com 2018).
As far as the current skills of the Ryanair staff members are concerned, one can infer that
they are extremely skillful. The flyer company holds less number of plane accident records
compared to its larger counterparts like British Airways and Singapore Airlines. However, there
have been reports of bird strikes (irishtimes.com 2018). One can infer from this fact that the staff
members of Ryanair adopt high level of risk management methods which is the cause for the low

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number of accidents. However, the staff should trained to deal with and reduce accidents like
bird strikes which are also capable of causing minor to massive damages to the flights.
As far as the experiences of staff members of Ryanair are concerned, the airline company
attracts experienced employees from competitor airline companies which account for its vast
market competitive. The apex management of the company has experienced managers who are
capable of taking aggressive business decision which account for the market position of the
company. For example, the non-executive chairman of Ryanair, David Bonderman has the
experienced of holding directorial position at Continental Airlines which merged with UAL
Corporation to compete with the merger of Delta Airlines and Northwest Airlines (Card et al.
2018). This shows that apex management of Ryanair are capable of offering appropriate
leadership to their employees and forming appropriate business decisions to operate in the
international market.
A review of the current capabilities of the employees and the management reveal that
Ryanair certain issues which would form the basis of the future skill development plan. The first
issue is concentration of the operations of Ryanair with North America and Europe. The puts the
company lower in competitive advantage compared to its competitors like American Airlines
which have strong presence in Asian and South American market (aa.com 2018). This means
that Ryanair should develop the existing skills of its staff to boost their competencies to achieve
its business targets-high revenue and higher competitive advantage.

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Part b. Future skill development plan and SMART analysis:
The new future skill development of Ryanair should be divided into three divisions and
last for 6 months. The target audience of the plan would be the apex management, middle level
managers and lower level executives of all departments.
Activities Description Time
Training, seminars,
simulated study of
market conditions in
Asia, Australia and
South America.
This training would improve the current decision
making skills of the managers and develop new
decision making skills suited to these three
markets
1 month
Risk management
while flying
(Especially for staffs
directly involved with
flying)
Exhaustive training of handling situations like low
visibility due to weather disturbances, bird strikes
and fire on board.
Training how to deal situations like terrorist
hijacks, how to communicate with the nearest
defense base(s).
1 month
Customer management
training (Especially for
staffs dealing with
customers)
Development of cultural intelligence, ensuring
higher level of customer satisfaction.
1 month
SMART analysis of the activities:
The following is the smart analysis of the three activities described above:

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Activity 1:
The first activity revolves around training of apex management and subordinate
employees on the market conditions of new markets like Asia to instill new decision making
capabilities in them. The activity, study of market conditions prevailing in Asia is extremely
specific and can be achieved within a given time frame like a month. The activity is relevant
because in order to succeed in the new markets, the apex management should develop a thorough
understanding of their market conditions and direct their subordinates. The outcome of the
training can be measured by the increase in the market share of Ryan. Hence the activity
qualifies the smart analysis (ec.europa.eu 2018).
Activity 2:
The risk management would be specific and would require laying of the entire work
breakdown structure. Taking into account the severity of air accidents due to visibility and other
issues, one can infer that the safety training is extremely relevant for achieving passenger and
crew safety. The outcome of the training can be achieved by comparing the number of accidents
before and after the training. Hence, the outcome of the activity is measurable and but cannot
be achieved fully. The training is time bound and can be completed with a month (Gubenko and
Ksenofontova 2015).
Activity 3:
Customer management training is specific as far as its training schedule and training
content are concerned. The trainers can opt for specific methods of training the staff dealing
with customers like conferences and simulation. The outcome of the training would be enhanced
customer satisfaction which would be evident from increase in repeat bookings of flights

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(Kolkoori, Wrobel and Ewert 2015). Hence, the outcome of the activity 3 is measurable and can
be reviewed periodically, hence time bound. Higher level of customer is important for
companies to earn revenue and market competitiveness. Hence, it is relevant and achievable by
continuous improvement in service quality.
Conclusion:
It can be concluded from the study that Ryanair must expand into new markets like South
America, Australia and Asia. The PESTLE analysis shows that the business of the company
derives profit from the immense market it enjoys in Europe and North America. The airline
company generates immense revenue by providing high quality services and ensuring passenger
safety. However, this is not enough to sustain the business health of the company in the future,
especially in the wake of Brexit and increasing competition from premium flyers like American
Airlines. Moreover, these strong players have already established themselves in the Asian market
to take advantage its growing economic strength. Thus it can be concluded that Ryanair should
also expand into Asia and train its staff members to function in the market.

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