Strategic Analysis: SWOT and PESTLE of Wizz Air Holdings Plc Report

This report provides a comprehensive SWOT and PESTLE analysis of Wizz Air Holdings Plc. The SWOT analysis examines the company's strengths, such as its strong financial performance and high market share in Central and Eastern Europe, as well as its weaknesses, including penalties on baggage an...Read More

SWOT and PESTEL Analysis
Wizz Air Holdings Plc.
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Table of Contents
MAIN BODY..................................................................................................................................3
Swot Analysis of Wizz Air Holdings..........................................................................................3
Pestle Analysis of Wizz Air Holding..........................................................................................4
REFERENCES................................................................................................................................7
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MAIN BODY
Swot Analysis of Wizz Air Holdings
SWOT analysis is the strategic analysis of the organization's strength, weakness,
opportunity and threats. It helps the organization in taking important decisions as these factors
affects the future performance of the company (Vlados, 2019). The SWOT analysis of Wizz Air
Holdings are as follows:
Strength
 Strong financial performance – Wizz Air is very good at executing the new projects and
have the ability to generate good return from the same. They have a successful track
record of building new revenue streams. There is strong demand because of their
reasonable fares they are making great profits.
 High market share in central and Eastern Europe – They have a good amount of market
share in main areas of Europe, and they also have a strong distribution network. They
have a very clear geographical focus.
 Have low unit cost and offers low fares – The focus of Wizz Air Holdings is on operating
in a low cost and offering the customer better services at low fares. Offering better
services at low fares is very attractive and drives demand and market share.
Weakness
 They put penalties on baggage – The baggage policy of Wiz Air is not so proper and also
categorized as unfair as they only allow a single small bag and the baggage that crosses
the size requirements can add on to the additional fee.
 Low frequency of flights – The low frequency of flights is a weakness for Wiz Air as
there are various competitors that are offering adequate frequency of flights as compared
to Wizz Air.
 Profits rely on season – According to a survey it has been found out that the earning of
Wizz Air is majorly dependent on summer as most of their profits reply on these months.
And also their forecasting is also not appropriative.
Opportunity
 Digitalization of customer journey – The company makes efforts to make their customer
journey more enhanced and personalized. It is also used to improve the competitiveness
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and mapping the customer journey from planning to their final destination. It helps the
company in building relationship with the customers (Huderek-Glapska, 2020).
 New emerging markets – there are many new markets that are emerging due to
government agreements and also inculcating the new technologies have opened new
doors for Wizz Air.
Threats
 Strong competitor – RyanAir is the major and biggest competitor of Wizz Air and
it has to make efforts to maintain the market share. They also have to offer
various discounts to the customers and others factors like high fuel prices are
threats to Wizz Air.
 Impact due to natural cause – The natural events such as Covid-19 has adversely
impacted the business of Wizz Air. The pandemic badly affected the Airline as
large number of customers were forced to cancel their trips because of the same
and reduced demand of travailing also caused a threat to Wizz Air.
Pestle Analysis of Wizz Air Holding
Pestle analysis is the tool which is used to identify the macro and micro environment of
the organization which influences its operation (Perera, 2017). The factors that impact the
operations of Wizz Air is as Follows:
Political
 The political factors include the government [policies, tax policies, law related to
environment etc. It is the degree of government intervention.
 The increasing political tensions among the countries in which Wizz Air is
operating is a matter of concern. There are many air strikes that are being done
between French and European government and this adversely impacts the
operations of Wizz Air.
 Also the taxation policy of the Uk government impacts the motivation level of
operating an Airline industry. As high level of tax can increase the cost for Wizz
Air and also they provide services at lower fares therefore it will turn less
profitable for Wizz Air.
Economic
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 The economic factors are inflation rates, economic conditions, disposable income of the
people etc. These factors determine the economic performance of the country.
 Covid-19 have adversely impacted the operations of Wizz Air as governments of
majority countries have put restrictions on travel and also many people have cancelled
the tickets which they have previously booked. According to certain study it is was
identified that the international passenger capacity reduced to 33% in March 2020. Due
to this pandemic they have also fired many employees as the company was not able to
cover the cost.
 The ups and downs in fuels prices also impacts the operation of Wizz Air as it affect the
costing of the company. Also, any fluctuation in the currency can stimulate the company
to alter their policies.
Social
 These factors determine the demographics of the population within which the Wizz Air is
operating.
 As there were new emerging markets and because of which the demand of pilots were
increasing. So Wizz Air took the opportunity and launched Wizz Air Pilot Academy
Program across the geographics to train and focus on brushing up the skills of the pilots.
 Also, they grabbed the opportunity of increasing customers spendings on travel. Wizz
Air took this opportunity and made efforts to give customers exclusive services by
innovating and seeking out maximum from the customers who are ready to pay for the
same.
Technological
 The innovation done in the industry related to technology comes under this head. It
includes research and development, automation and awareness about technology.
 Digitalization is an important aspect which has to considered when the company has to
gain competitive advantage. Therefore, Wizz Air took this opportunity and improved
their customer experience and also overcome the operational inefficiencies (Zahari. and
Romli, 2019).
 Also the company started using the artificial intelligence and machine learning to
increase their productivity.
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Legal
 These are certain laws which impacts the operation of Wizz Air. The company needs to
be aware certain factors which are legal and which are not.
 Wizz Air has to acquire a special licence from UK government for operating into the
airspace of UK and luckily the company got the same in 2019.
 because of the new baggage policy of Wizz Air they have to face a penalty of 1 million
which was lied by Italian anti-trust watchdog.
Environmental
 These factors include climate, weather and related to certain targets which are set by the
government to reduce the negative impact of the operations on the environment.
 The company which does CSR and make efforts to reduce their environmental footprint
becomes very attractive for the society and people. Therefore, Wizz Air took this
opportunity also and took measures for reducing the carbon footprint and adopted a
sustainable approach for their operations. They have launched a new aircraft named
A321 neo which emits low carbon and also the noise and nitrogen footprint is less.
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REFERENCES
Books and journals
Huderek-Glapska, S., 2020. 7 The air transport markets in Central and Eastern Europe. Air
Transport and Regional Development Case Studies. p.121.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
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.
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