Impact of External Factors on Ryanair: A PESTEL Analysis

This report discusses the impacts of external factors on Ryanair, an Irish low-cost airline, and the airline industry as a whole. It provides background information on Ryanair and explores the airline industry using a PESTEL analysis framework. The report covers political, economic, social, technological, legal, and environmental factors affecting Ryanair's operations. It also highlights the challenges and opportunities faced by the company in the current COVID-19 pandemic.

RYANAIR

Table of Content
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of the company...................................................................................................3
Discussion of the airline industry in which Ryanair operates with the help of PESTLE
framework...............................................................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Airline industry includes those businesses and companies that provide air transport
services for travelling passengers and freight. There are several different airline companies exist
in the world that are responsible for Air travels and transportation taking place within the World
(Christodoulou and Cullinane, 2019). The sub sectors of the airlines string include operations,
maintenance, marketing and finance divisions. Travelling services that are provided by the
airlines industry to their customers, passengers and cargo are using aircrafts such as airplanes,
jets and helicopters. Airline industry and aviation industry are two separate industries but
sometimes people use both the words interchangeably. Airline industry is developed buy
alignment of different businesses rendering air transport services to all those paying consumers
on the other hand the ration industry stands fore and includes all aviation related businesses.
Therefore it is stated that airline industry is a sub sector of the wider aviation industry as industry
also include those businesses which are involved in manufacturing a craft and companies
offering non-commercial flights, aerospace companies regulation authorities and those who are
tangled in conducting research and development. Choose an organisation for the present report is
Ryanair which was founded 1984 and commenced its operations in 1985. The report will be
exploring and discussing the impacts imposed by different external factors over the company and
the airline industry with the help of using PESTEL analysis framework.
MAIN BODY
Background of the company
Ryanair is an Irish low cost airline which was founded in 1984 and headquartered in
Ireland. The company has its primary operational base at Dublin and London Stansted airports
and its parent company is Ryanair Holdings Plc. The airline organisation serves its which around
to 25 destinations and has number of operational units around the world. In 2016, company was
denoted as the largest European budgeted on airline organisation and was recognised for carrying
more International passengers then any of its competitors. Ryanair operates with more than 400
Boing 737-800 aircrafts. The company is recognised for its very potential characteristic that is
rapid expansion which was attained by it as outcome of the regulation of the aviation industry
took place in Europe in the year 1997. This act provided the company and opportunity to succeed
its low cost business model. The company has its routes networks which are serving in 40

Europe countries, North Africa that is Morocco and the Middle Eastern region such as Israel
Jordan and Lebanon. There are certain criticisms against Ryanair which exist in the market
which are related to its poor working conditions, generating controversies in order to game free
publicity, lacking customer services and huge extra charge being used in operations.
Discussion of the airline industry in which Ryanair operates with the help of PESTLE
framework.
Airlines industry is often grouped with number of different categories of airlines and
when a broad analysis is conducted it can be determined that the industry has three different
types or major components which combined together builds the airline industry as a whole.
These three types of airlines are International, National and Regional (Zahari and Romli,
2019).
 International Airlines include those businesses who are high profile and most successful
in the industry as they earn their revenues in billions every year and operate on a very
large passenger jets. These are those lines which critically concentrate on their efforts for
presenting the international and global services to their customers by offering them travel
services over large distances.
 National Airlines are the second type of industry businesses in which both medium sized
and large sized jets are used by companies to offer travel services. These companies keep
their focus on offering services to customers to areas in the domestic market and home
country and some of them offer access to International destinations as well.
 Regional Airlines are those businesses which are the smallest and the 3rd main type
offering services to certain precise regions. In simple words they deliver facilities to
passengers to specific locations of the world with very less requests and for those
destinations in which no other national or international airline are reaching.
PESTEL analysis is a framework which is used by experts and researchers as well as
companies in order to identify and understand the external environment of the business along
with identifying the factors which are imposing both positive or negative impacts on their
operations. The framework focuses upon macro level environmental factors which affects the
entire industry and the businesses flourishing in the respective industry. Ryanair is a large
commercial airline company which deals and exist in number of locations offering their services
to different destinations of the world. Therefore, company deals with number of macro industrial

factors in separate locations of the world and manage time effectively. Henceforth, a PESTLE
analysis of Ryanair is conducted below and the discussion will be focusing upon separate factors
such as migration, National cultures and other governmental rules and regulations.
There are six factors in PESTEL analysis and the abbreviation of the word represents
each of the factors that are Political, Economical, Social, Technological, Legal and
Environmental. The analysis is as follows:
 Political- Ryanair being the biggest low cost airline in Europe operating from 84 basis
across 35 countries from continental Europe, it is clearly showcased the company has
wider scope of operations (Stevenson and Marintseva, 2019). Due to it, Ryanair needs to
follow and actually follows International series such as the Warsaw convention, the
Hague convention and the Vienna protocol. The company has been affected by numerous
travel custom and aviation regulations as well as rules imposed in in different countries
and destinations. These travel regulations and restrictions are specifically imposed by
different countries and destinations as well as their governments in order to combat the
coronavirus pandemic which have caused a huge setback for Ryanair and even the other
airline companies around the world. As per the advices made by WHO, the World Health
organisation and other health authorities of respective countries certain restrictions are
imposed over travel and tourism to contain the blowout of the virus and the disease.
Countries closed their borders and some of them capital then open which permit for
essential travel. These huge restrictions imposed upon the international travel cost future
set back to the tourism industry in general and for Ryanair. The World Tourism
Organisation which is denoted as UNWTO also stated that the world is facing and un
percentage to global Health, social and economic emergency due to the covid-19
pandemic showcasing that the businesses and airline organisations will be requiring at
least 2 to 4 years to rebound and return to normal conditions and revenue generation units
as of 2019 in regards to International tourism and travel (Whittington and et. al., 2020).
 Economical- The world economies have been suffering due to coronavirus pandemic and
outbreak of the disease called covid-19 due to which countries have to impose strict
lockdown in different cities. Borders were sealed by countries around the globe and
International travels were entirely restricted for a particular period of time which have
caused immense reduction in number of passengers and travellers. The International civil

aviation organisation which is a specialised agency of the United Nation (UN)
prominently issued a report which showcased that the aviation industry will be facing
huge losses by the year 2020 and will be continuing in the year 2021. Ryanair in
particular have been suffered a 99% drop in their passenger in the year 2020 due to travel
bands and the company actually declared itself in loss and resulted in layoffs of around
3000 members of its workforce that is around 15% in total. The economic factors have
critically imposed Syria economic centre back for the company and it is determined that
Ryanair will continue to be facing these setbacks in the coming months and years. Simply
the company will be taking around 2 to 3 years for recovering from these economic and
operational losses (Bauer, Bloch and Merkert, 2020).
 Social- The social aspect in regards to airline industry and companies focus on target
market and trends going on in respect to business and leisure travels. Due to the
coronavirus pandemic several countries were shutdown and borders were sealed. After
few months some of the countries started opening their borders slowly for international
travellers and tourists. But during this entire situation of covid-19 the migration factor
provided positive results to line businesses as well as to Ryanair. The company is a low
budget airline and thus, most people were willing to travel with Ryanair to reach their
homes from one country in which their workplace exist to their home countries.
Migration factor of positive results to Ryanair but there was still low as business travels
were not resumed by many countries and people are also concerned about their health and
safety. Business travel groups and travellers contributed to a huge percentage of revenue
that was earned by Ryanair. Thus, company is still affected without business travel
resuming and it is not likely that the brand can easily recover from current economic
setbacks (Loizia and et. al., 2021).
 Technological- Even after facing huge economic losses and around is 99% of decrease in
its passengers the company that is Ryanair is still looking forward for overcoming the
barrier and the challenges that caused by the pandemic. The brand is looking for to
prepare for a post economic situation when there will be an expected surge in flight
demands and the company is still planning to purchase new Boeing jets with updated
Technologies and services. The company have invested huge amount of money in
research and development which have resulted in a positive manner as the new

acquisitions of 737 MAX Boeing jets will enable the brand to be e ahead of its
competitors and gain a competitive edge. Although the current political and economic
environment is totally dependent on the health measures and restrictions which will be
kept along by different countries. But the success of Ryanair and its survival in the
industry is still dependent upon the global public Health situation which is why increased
it is important for the brand to improve their research and development which will be
offering them new opportunities and survival chances in the competitive and aggressive
as well as saturated marketplace (Ellis, 2020).
 Legal- The aspect have always been in favour of Ryanair or in other words it has been a
very factor in success of the organisation. The company gained its success after the
aviation industry in Europe was deregularised and the European airline industry was open
to low cost business models. Hence, in the past the legal factor has provided positive
results to the brand. On the other hand at present during the covid-19 era, the company
questioned the impositions and travel restrictions imposed by the Irish government as it
effects it operations. This step taken by the organisation resulted negatively for the
company as the high court of Ireland dismissed Ryanair’s claims and upheld the company
to take travel advice on the movement restriction. Along with it before the panda nagrani
was also import actions in the year 2018 and 2019 because of the labour complaints
against poor pay and working conditions by the cabin crew of its Portugal, Spanish and
Ireland based employees. This resulted in increasing problems of Ryanair’s in which the
company reacted by forcing land job cuts and pray reductions in the light of the pandemic
which will be a huge consequence again for the brand (Guno, Collera and Agaton, 2021).
 Environmental- The transportation businesses are considered as the largest contributor
to greenhouse effect and gas innovation. In this regards airline industry is highly
criticized you for its continued massive carbon footprint. In response to the same Ryanair
committed towards reducing their carbon footprint through initiating carbon offset. Along
with the align also vows for eliminating its non recyclable plastic used on flights by the
end of the year 2023 and commit themselves to use cutlery made of wood and paper
materials along with encouraging its passengers to do the same. With the carbon offset
initiative the company will be requesting the customers and services user to pay €2
carbon offset fee if they are willing to diminish their flights carbon footprint and

influence over the environment. The money generated through this initiative will be did
you on environmental projects Andre for restoration efforts which are being planned by
Ryanair (Kardes, Flynn and Dugan, 2020).
CONCLUSION
The above report concludes the airline business and industry is highly affected due to the
covid-19 pandemic and there are several macro-level factors which affect the brand overall.
Although the company have suffered huge losses and casualties in IT operations due to the
economics and political setback but there are several macro-level factors which are supporting
businesses in the current critical times of coronavirus. The social and technological factors have
played a very vital and positive impact upon the brand and will be helping in surveying the
pandemic and recovering from it.

REFERENCES
Books and Journals
Bauer, L. B., Bloch, D. and Merkert, R., 2020. Ultra Long-Haul: An emerging business model
accelerated by COVID-19. Journal of Air Transport Management. 89. p.101901.
Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges
from the implementation of a port energy management system: A SWOT/PESTLE
analysis. Sustainability. 11(21). p.6046.
Ellis, D., 2020. Developing a strategic framework of analysis for air transport
management. Transportation Research Procedia. 51. pp.217-224.
Guno, C. S., Collera, A. A. and Agaton, C. B., 2021. Barriers and Drivers of Transition to
Sustainable Public Transport in the Philippines. World Electric Vehicle Journal. 12(1).
p.46.
Kardes, I., Flynn, L. R. and Dugan, M., 2020. Online retailing: determinants of competition
between multinationals and local firms in emerging markets. International Journal of
Retail & Distribution Management.
Loizia, P. and et. al., 2021. Measuring the level of environmental performance in insular areas,
through key performed indicators, in the framework of waste strategy
development. Science of The Total Environment. 753. p.141974.
Stevenson, I. and Marintseva, K., 2019. A review of Corporate Social Responsibility assessment
and reporting techniques in the aviation industry. Transportation research procedia. 43.
pp.93-103.
Whittington, R. and et. al., 2020. Exploring Strategy Text and Cases. Pearson UK.
Zahari, A. R. and Romli, F. I., 2019. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics. 192. p.104901.
Online:
Airline Industry: All You Need to Know About The Airline Sector, 2021. [Online] Available
Through: <https://www.revfine.com/airline-industry//>