Ryanair Case Study

Read this comprehensive case study on Ryanair, the largest airline group in Europe. Explore SWOT and PESTEL analysis, main problems faced by Ryanair, and solutions using management theories.

Ryanair Case Study
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT and PESTEL Analysis................................................................................................3
Main Problem faced by Ryanair.............................................................................................5
Solution to the Problem explained with two management theories.......................................7
Experience in writing the report.............................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Ryanair is the largest airline group in Europe and was founded in the year 1984. Ryanair
Holdings group connects nearly 200 destinations in a total of 40 countries. The company has
approximately 19,000 highly skilled employees working for it and delivering on-time
performance (Ahmed and et. al., 2019). Ryanair Holdings is an industry leader with a safety
record of 34 years and is regarded as one of the cleanest airlines of Europe. It is the parent
company of Lauda, Buzz, Ryanair DAC as well as Malta Air. The company is regarded as the
largest low-cost airline in Europe. This report includes a PESTEL and SWOT analysis for
Ryanair, identifies a problem that the company is facing and proposes a solution for the same
using different management theories. The report also involves a written short report about
experience while writing.
MAIN BODY
SWOT and PESTEL Analysis
SWOT Analysis Strengths – Ryanair is one of the lowest airlines all over the world with lowest unit
costs. Also, the company’s airfares are lower than any of its competitors and covers a
total of 200 destinations. Due to a large size and low fares, Ryanair has been able to gain
a competitive edge over other players in the market. The company has an online
reservation system wherein customers can book tickets and manage itineraries easily. It is
financially stable and has been able to grow its business in various untapped markets.
Also, the company has been able to attract more customers by constantly innovating its
services.
 Weaknesses – Apart from being one of the most successful airlines worldwide, the
company lacks behind in managing its employees’ relations as well as work conditions.
This can lead to many piolets as well as crew members walking out of the system and
looking out for other opportunities (Alsumairi and Tsui, 2017). The company has been
expanding its fleet aggressively which can lead to overcapacity in the coming years.
Another weakness is that Ryanair’s regional airports are at a far distance from the city
due to which travellers find it difficult to locate the same.
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 Opportunities – Ryanair has access to several growth and expansion opportunities. The
company receives large orders of aircrafts which is a great opportunity for it to strengthen
its overall position in the European market besides reducing impact on the environment
by incorporating eco friendly ways of production (Asadi, 2019). The company has got a
massive presence in Germany, Spain and Italy apart from Europe which can present
further growth opportunities to it. Ryanair can consider exploring new routes in order to
diversify its business in new markets. Also, it can improve customer service and relations
with employees in order to sustain in the industry. Threats – Ryanair faces a lot of competition from other airlines like EaasyJet,
Eurowings, Jet2.com, WOW Air etc. who are also low-cost airlines. The economic
condition of Europe is becoming healthy which means that people can now spend more
money on flights which can lead to a decline in the demand of low-cost airlines. Also,
new-entrants in the market can also pose a threat to Ryanair. Apart from all this,
fluctuations in the currency, tax rates, fuel prices and other external factors can also pose
threat to the company.
PESTEL Analysis
 Political Factors – Before entering a new market, Ryanair should analyse various
political factors such as political stability, tariffs and trade regulations, tax rates etc.
Brexit is one of the major political factors that have impacted on the business operations
of low-airlines. Increase in the tax rates can raise concerns among tourists in the way that
they prefer local transport instead of a flight for short distances.
 Economic Factors – Economic factors such as type of economy, skill levels of the
employees, productivity level, labour costs can influence the operations of Ryanair
(Borbely, 2019). Therefore, the company should keep these factors in mind while
conducting business. A sudden economic crisis like a recession can lead to a decline in
the number of passengers travelling from one destination to other through airlines.
 Social Factors – Passengers look out safety when they travel by air and if the airline is
able to provide a sense of safety and security, they refer travelling with it again. In case
of an emergency or mishap, passengers will lose the sense of security and might not
consider travelling with Ryanair again. This can affect its performance adversely. Thus,
the company should consider these factors on priority.
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 Technological Factors – Technology advancements have changed the way in which
businesses carry out their operations. Facilities like video conferencing has reduced the
demand of people in businesses to travel often for work which can influence the airline
business. Thus, Ryanair should implement latest technology like providing facilities of
movies and audio songs during the flight, software providing information about all the
products and services of the company. This will enhance the productivity of the
respective company.
 Environmental Factors – The awareness among people about environment is increasing
day by day due to which airlines have been facing a lot of problems (Costantino and et.
al., 2016). Ryanair can adopt policies that the government has formulated to protect the
environment from any kind of harm. This will help it in biding a positive image in the
industry as well as attract customers in large numbers.
 Legal Factors – There are various laws that have been developed by International Air
Traffic Agency which all airline companies are expected to adhere to in order to provide
a netter service to customers. If Ryanair fails to follow these legislations and rules, it will
not be able to provide an effective service to its customers and gain a competitive
advantage in the industry against competitors.
Main Problem faced by Ryanair
Ryanair has been facing a lot of problems lately regarding customer service. The
company has eliminated its in-flight traditional services like complementary meals, allocation of
seats and offering newspapers. The company is extremely sensitive to changing its fare and also
does not have very good employee relations. The working conditions are poor for example- the
employees, including piolets and cabin crews are not allowed to charge their phones while on
duty, they are paid less for the amount of efforts they put in etc. Also, the employees are
supposed to pay for their training sessions as well as uniforms (Gummesson, 2017). This has led
to an increase in the staff turnover which can influence its overall position in the market. The
main reason behind this problem is that employees from their side, work hard but are not valued
for the same. They work non-stop without any break and get exhausted which makes it difficult
for them to deal with passengers. If this problem continues to grow, Ryanair will lose its brand
image of being Europe’s largest low-cost airline. Also, it will lose its customers because of poor
services, tired and unmotivated employees.
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Moreover, the company has been telling its piolets that in order to graduate to newer
aircrafts they will have to pay a retraining fee. This can somehow affect the experience of the
customers as there are a lot of complaints about the staff not being trained well enough etc. The
company does not pay enough attention to its employees and is only concerned about retaining
its position of the low-cost airline and competitiveness in the market. Since the employees of the
company are not provided any kind of break, they are not able to give in their best inputs and
perform well (Heo, Blal and Choi, 2019). Also, the company recently increased charges for
check-in luggage which has led to customers giving it a second thought before booking their
tickets with the airline. Although, it has a record of punctuality and always being on time with its
services, its current situations have put the company in problem. This issue, if not resolved can
lead to serious consequences which can further lead to shutting down of the airline.
Other reasons include job insecurity among the employees, poor organisational culture,
and non- recognition of their performance. The company does not appreciate the amount of time
and efforts its employees put in to help it retain the position of Europe’s largest low-cost airline.
There have been cases when the company deducted unnecessary amounts from its employees’
wages and no opportunities of promotion is offered to the workforce which is why there is a lack
of motivation among them. Whenever the employees raise their concern about low salary, the
company simply pushes them off and does not consider the same. Besides, this the organisational
culture of the company is not supportive which is why sometimes the employees become
frustrated and lose their interest in what they are doing. This has led to a rise in absenteeism, low
levels of productivity and morale, situations of conflicts, strikes and resistance to change.
With an increase in economic globalisation, competition in the aviation industry has
increased like no other. There are several other low-cost airlines that offer better working
environment as compared to Ryanair. Therefore, because of being treated bd, the employees of
the company have been seeking opportunities outside (Santos, 2018). The company’s efforts in
order to retain them have been aggressive which is another reason why there are poor employee
relations. The managers of the company do not have any idea about training requirements of the
employees and also do not treat their team members nicely. Also, there is no flexibility in the
working hours but a tight schedule for the staff. This impacts the relation that they share with
employers adversely.
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The management of Ryanair Holdings is also not honest with the employees and does not
communicate important information to them on time. This also affects the relation that
employees share with each other as well as their employers. It is a known fact that a company
cannot function successfully without having employees who are productive and committed to
their jobs. Thus, healthy as well as positive employee relations foster growth and a good working
environment in an organisation (Song and Lee, 2020). Ryanair should take this problem
seriously and find different ways to resolve the problem in order to retain its employees and
maintain position of Europe’s largest low-cost airline by gaining a competitive advantage over
others in the market. This will boost the morale as well as confidence of the employees and they
will perform their jobs efficiently.
Solution to the Problem explained with two management theories
The main problem that is identified above is that Ryanair Holdings does not have very
good employee relations in its system due to which the customers’ service is also getting
affected. The solution to this problem is explained below with the help of two management
theories.
Situational Leadership Theory – According to this theory, a leader should create an
environment wherein the employee feels free to reach out to him in case of any issues. He should
adopt various style of leadership patterns to train the staff as per individual understanding of the
people. Ryanair has such efficient leaders who have the appropriate characteristics (i.e. structure
and culture of the organisation, goals etc.) in order to be a symbol for the staff. Some of the
positive factors of situational leadership are that it is easy to understand considering a well-
efficient leader who reaches to the level of individual employee needs. In context with Ryanair,
the company has kept such leaders who adapt the situational theory by building employee
relations so that it becomes easy to communicate any orders.
In order to resolve the above stated issue of maintaining an equal balance between the needs of
employee as well as that of the company, Ryanair should apply this management theory which
will define some set of rules that will guide the managers to manage their team members.
Ryanair can use this theory to organise in-house trainings and campaigns for its employees
which will boost up their confidence, skills and improve their performance when delivering
customer services (Wróbel, P., 2016). One of the most important assets for an organisation are its
employees as they are the source through which a company gains goodwill and generates
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revenue. So, in order to maintain an equal balance between the company and employee, effective
leaders with appropriate skills should be appointed who help in facilitating effective relations of
the company with its employees.
Principles of Administrative Management – This theory was developed by Henry
Fayol and it states that managers have six basic responsibilities when it comes to managing
employees. These are organise, command, control, coordinate, plan and forecast. Keeping these
responsibilities in mind, Henry Fayol developed 14 principles that explain how managers should
lead their team members. Therefore, Ryanair Holdings should implement this theory of
management in order to improve its employee relations. This theory can help in providing
insights in order to make efficient decisions (What are Management Principles?, 2020). The
management will be able to deal with various situations that come up. The principles of
administrative management can be applied to various situations, one of them being handling poor
customer service as well as employee relations.
Adapting this theory will help the employees in adapting to any kind of change that is
being implemented into the system. Since there are 14 different management principles, they can
be applied to various situations. Therefore, when a situation changes, the suitable management
principle can be used. They also help in improving the understanding of the management about
what should be done to enhance customer service by managing the employees effectively.
Ryanair Holdings will be able to improve its organisational structure by using the theory of
Principles of Administrative Management. It can form teams during training programs that can
help it in improving relations with employees. They will feel more confident as well as
motivated for their job and will put in best efforts to provide excellent service to the passengers.
The efficiency as well as productivity of the employees will improve and the company
will be able to achieve its desired goals and objectives (Asadi, 2019). The company will be able
to take a more realistic view of the situations and therefore make effective decisions. Thus,
Ryanair Holdings can implement the above explained management theories to resolve its
problem of employee relations due to which the customers satisfaction. This will help it in
retaining the position of low-cost airline in the market and gain an edge against others in the
market.
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Experience in writing the report
Writing the above report was a very nice experience for me as I got to enhance my
knowledge about the subject of low-cost airlines. I got to understand that there are various
problems that prevail in the aviation industry and that how to overcome them. I also learnt that
all organisations must treat their employees effectively and maintain healthy relations with them
in order to provide customers a memorable experience as well as attain their goals and
objectives. Companies can also gain advantage over their competitors by building a brand image
of having good relations with employees. Also, all important details should be communicated to
the employees effectively to provide them a sense of belongingness and being involved in the
decision-making process.
I also got a chance to learn about the different theories of management and how can
organisations use them in order to improve their performance as well as the overall productivity
of the people working for them. SWOT and PESTEL are two vey important tools that assist
organisations in identifying their strengths as well as weaknesses and work towards improving
the same (Gummesson, 2017). Opportunities and potential threats can also be recognised for
which effective strategies can be developed. If the strategies are developed carefully, they can
help in analysing the various external factors that can impact the overall functioning of a
company in the market. Thus, my overall experience of writing this report not only increased my
knowledge but also helped me in learning new concepts as well as their application in real world
scenarios.
CONCLUSION
From the above report, it can be concluded that organisations should perform SWOT and
PESTEL analysis in order to identify their strengths as well as weaknesses. They can utilise
various opportunities in order to grow and enhance their business operations. Also, at the same
time they can overcome various threats that can affect their functioning. Also, management
theories can be incorporated in order to resolve various issues that persist within a company and
thus gain a competitive advantage against other players in the market. There are various
management theories like situational leadership theory, contingency theory, systems theory etc.
Lastly, companies should have knowledge about any problem that are prevailing within their
system and should seek ways to resolve and overcome them to remain competitive.
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REFERENCES
Books & Journals
Ahmed, J. U. and et. al., 2019. Ryanair: A low-cost business model in the european airline
industry. SAGE Publications: SAGE Business Cases Originals.
Alsumairi, M. and Tsui, K. W. H., 2017. A case study: The impact of low-cost carriers on
inbound tourism of Saudi Arabia. Journal of Air Transport Management, 62, pp.129-145.
Asadi, S., 2019. Evolutionary fuzzification of RIPPER for regression: Case study of stock
prediction. Neurocomputing, 331, pp.121-137.
Borbely, D., 2019. A case study on Germany’s aviation tax using the synthetic control approach.
Transportation Research Part A: Policy and Practice, 126, pp.377-395.
Costantino, F. and et. al., 2016. Evolution of the intellectual structure of research on pricing
strategy of low cost carriers. Research in transportation business & management, 21,
pp.99-116.
Gummesson, E., 2017. Case theory in business and management: reinventing case study
research. Sage.
Heo, C. Y., Blal, I. and Choi, M., 2019. What is happening in Paris? Airbnb, hotels, and the
Parisian market: A case study. Tourism management, 70, pp.78-88.
Santos, C., 2018. Ontologies for legal relevance and consumer complaints: a case study in the
air transport passenger domain.
Song, W. K. and Lee, H. C., 2020. An analysis of traveler need for and willingness to purchase
airline dynamic packaging: A Korean case study. Journal of Air Transport Management,
82, p.101735.
Wróbel, P., 2016. Polish migration’s socio-cultural impact on Wales in the aftermath of 2004–
Preliminary findings from western Wales: An Aberystwyth case study. Studia Celtica
Posnaniensia, 1(1), pp.91-112.
Online
What are Management Principles?. 2020. [Online]. Available through:<
https://www.managementstudyhq.com/what-features-importance-and-objectives-of-
management-principles.html >.
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