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Environmental And Western european Airline Industry Analysis

History

Ryanair is continuing to grow since 1985 with only 25 workers and a single 15-seating turbo-prop commuter plane soaring between Waterford and London. By 2001 there are more than 1500 employees doing work for Ryanair and much more than 10 million people are taken to 56 metropolitan areas in 13 Europe. Nowadays the company is named as the most popular airline online by Yahoo and also approved out British Airways to become the UK's most liked airline in UK and throughout Europe.

Mission and Objectives

Ryanair does not publish a formal eyesight or mission assertion. Because of the increase of people, the business has re-launched as a "no frills" flight to meet the needs of traveling at the lowest price. It is designed to extend its market show, and increase more routes and areas. Therefore it could become the 1st largest airline and keep maintaining the position on the market.

Reasons for success

The reason of Ryanair success since it implements different marketing strategy to help make the company survive in the competition and to be able to gain competitive position in the air travel market. For instance, it's "no fills" strategy. To be able to position itself available on the market, Ryanair controls own its costs to own most affordable fares possible and stay profitable.

2. 1 The PESTEL Analysis

The Political Factors

The European countries Union (EU) has widened before few years, and it'll be a huge factor affects the path and strategy planning for Ryanair. Plus some countries give preferential treatment to companies from other own country, i. e. , France government has the coverage to support its own national carriers which impacts the extension of Ryanair.

The Economic Factors

The unstable fuel price has effects on the business. In the face of rising fuel, hedging on future buying of gas to stable the cost as gasoline is a major cost for every air travel. Also, the depreciation folks dollars impacts Ryanair because customers from USA will cut their purchases as US us dollars are depreciating.

The Socio-cultural Factors

The increasing travelling lifestyles turn into a factor to have an impact on the business enterprise of Ryanair. Nowadays people will be more enjoy a going lifestyle, i. e. , graduation excursions, backpack excursions etc. They want to travel all around the world. Therefore, these people become the major customers for the company.

The Technological Factors

Technology is rapidly improving means the complete industry is changing, becoming more environmentally friendly and efficient. Far better infrastructure in the international airports means that some international airports can charge the airlines more for landing there.

The Environmental Factors

Under the new laws, the flight industry has to be more environmentally friendly. Therefore the manufacturers, designers and air travel companies have to combat this together to reduce carbon dioxide emissions and less harmful to the environment so it is order to adhere to EU laws.

The Legal Factors

The entire industry is seriously regulated due to laws plus they have to constantly adapt to new changes in the law, such as not allowing liquid up to speed. After 911, the tighten security measure has also damaged the business, the federal government reinforce security, it increases costs, and forcing to force the airfare ticket prices up.

2. 2 The Five Pushes Analysis

Competitive Rivalry

Ryanair has highly competitive rivalry because the large numbers of opponents and especially because the air travel industry market is completely saturated. There already are many "no frills" airlines, i. e. , easyJet, Monarch Airlines, and Air Berlin etc. If those companies decide to compete on a single basis as Ryanair, you will see much pressure on prices and margins to Ryanair.

Suppliers bargaining power

The bargaining ability of suppliers is high for Ryanair. Price of aviation petrol is immediately related to the expense of oil. The expenses from one company to the other are high because all technicians and pilots would have to be retrained. Therefore, Boeing is the key suppliers of Ryanair. For all those bigger international airports where Ryanair's opponents operate, have greater bargaining electric power. Ryanair's insurance plan is attempted to avoid these international airports and concentrate on the regional airports.

Buyers Bargaining Power

The bargaining power of customers is medium. As customers are price sensitive to choose Ryanair, they only decide for cheapness not quality. Therefore the prices are increased or a competition has a lesser price they will switch to some other airline.

Threat of New Entrants

The risk of potential entrants is low because create an air travel is high capital investment and the risk is high. Also there are a few barriers to entry, like a lot of rules and the pressure to lessen carbon emissions.

Threat of Substitutes

The risk of substitutes is high as a result of competition with buses, trains, vehicles and ferries. These can all substitute the low-cost airlines like Ryanair.

2. 3 The Scenario Analysis

According to the socio-cultural factors, the marketplace is becoming more competitive because of experiencing the emerging and developing countries, more folks want plane tickets therefore more airlines to be able to support this and it could decrease the profits in the market share. Furthermore, Ryanair is facing the increasing trade-union pressure in Europe. Some of the countries in Europe have shaped a trade-union among each others, thus it gives the pressure for Ryanair to do business in these countries.

Chapter 3 SWOT Analysis

3. 1 Strengths

Ryanair is rolling out a very well recognized brand name by leading low cost airline. It provides high seat thickness and high service performance: punctual, higher rate of flight completion, low baggage damage, these give a good image of the company's reliability. Ryanair has first mover advantage in strong bargaining electric power in airport bargains and reduces barriers to its entry into new markets and airports. Over 94% of most seats can be purchased online so the cost of syndication by using internet reservation is leaner than phone reservation, also eliminates the necessity of travel companies. Furthermore, the one style of Boeing aircraft will save you on training, maintenance and supervisory costs.

3. 2 Weaknesses

Ryanair is dependant on "no frills" strategy, it restricted expansion likelihood. The long distances of its air-port from city centers can become less attractive as markets mature. As time passes customers may find this a huge hassle. Besides, the morale of staff is low. The weakening employee relations are damaging to success in virtually any services industry. Other weakness of Ryanair is high turnaround would raise the fuel use and carbon dioxide emissions, therefore the costs will be increased.

3. 3 Opportunities

As the EU enlargement, there will be a whole lot of new spots exposed and complete deregulation of airline industry in every EU market segments. During any financial downturns, the new fleet could be leased out to undercut other options and increase entrepreneurial activities will be a source for current economic climate air travel.

3. 4 Threats

There are several risks on Ryanair. First, impending legislations for environment security and customer compensations increase costs. Second of all, the increase in market show at the price tag on network airlines may possibly also increase airport terminal service charges which are low. Then, traditional airlines are also reducing fares and costs which could affect the marketplace share of Ryanair. Finally, additional fleets may necessitate new terminals and extra airports which imply Ryanair would need to bear higher cost.

4. 1 Evaluation

There is a point-of-difference between Ryanair and bigger airlines such as British isles Airways (BA). Ryanair is the Europe's largest low-cost carrier and offer only basic-level service but BA is a high-class airline company which provides high identified service, plus they focus on difference position and aim for customers so it is very difficult for larger airlines to imitate the strategy. A lot more than that, Ryanair's "no frill" strategy is ecological for discovering their aim for customers who are price-sensitive and desire to spend low price to fly securely.

4. 2 Recommendations

A low-cost image of Ryanair that has become its brand label will be difficult to erase when it wants to moves up the value chain, and the upper-middle course economy tourists may seek better value proposition, not simply for low fares. It is suggested Ryanair add more routes with their already extensive network and arrange for expanding procedures into non-European markets in the near future. Furthermore, consolidation and integration would become essential to expand further in maturing marketplaces which could help Ryanair to offset pressure on its costs and fares.

Reference Lists

Case Analysis on Ryanair, the largest low-cost European Air travel (Jan, 2008) [online]Availablefrom [Accessed 21/07/10]

Thomas M. Package (2005), RYANAIR (2005): SUCCESSFUL LOW PRICED LEADERSHIP, [online]

Available from

[Accessed 20/07/10]

Yahoo Knowledge (2007), Assignment for strategic evaluation, [online] Available from

[Accessed 20/07/10]

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