Ryanair Pestle Analysis 2021
Ryanair is the Europe’s largest airline, the largest low cost carrier and also one of the world’s largest airlines globally in terms of passenger numbers. Ryanair operates in a very competitive environment, a challenge that has today been escalated by COVID 19 impact on travel. In March 2020, the air industry came to a standstill following widespread national lockdowns, by April the overall number of passengers had fallen 92% from 2019 levels, international travel dropped by an average of the 98% cent while domestic travel fell by 87% in domestic air travel.
Despite the loosening of travel restriction and lockdowns with the rollout of vaccination, the industry is not likely to get back to its normal levels any time soon as new variants keep coming up and the fear of travel and infection impacts consumer decisions. Besides, consumer confidence has been crashed by growing unemployment, looming recession and the uncertainty surrounding COVID 19.
Besides, it should be noted that the industry was already overcrowded with players competing on price, a fact that has pushed profitability to the lowest levels leaving consumers with a lot of bargaining power. This is a situation that is likely to worsen as supply exceeds demand, in fact, smaller airlines are likely to continue to collapse while major players consolidate to gain market shares.
Using PESTLE analysis, the report examines the political, economic, social, technological, legal and ecological environmental Ryanair operates in and how it is impacting its growth.
Magezi, K. Prudence (2021) "Ryanair Pestle Analysis 2021" 123 Writing [Online] at https://www.123writing.com/sample/ryanair-pestle-analysis-2021
Magezi, P.K. (2021). Ryanair Pestle Analysis 2021. 123 Writing. Retrieved 21 September 2021, from https://www.123writing.com/sample/ryanair-pestle-analysis-2021
Magezi, Prudence, K. "Ryanair Pestle Analysis 2021" 123 Writing. 2021, https://www.123writing.com/sample/ryanair-pestle-analysis-2021. Accessed 21 Sept 2021.
Magezi, Prudence. K. 2021. "Ryanair Pestle Analysis 2021" 123 Writing. https://www.123writing.com/sample/ryanair-pestle-analysis-2021.
RyanAir Pestle Case Study
Key Learning Outcomes
- Understand the broad macro-environment of Ryanair and the UK airline industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- To apply strategy business models and frameworks such as Pestle/Pest/Steeple, etc to real company cases.
Founded in 1984, Ryanair is Europe’s largest airline and the lowest cost carrier with itsprimary operational bases at Dublin and London Stansted airports. The airline operates a low cost carrier scheduled passenger airline that serves short haul point to point routs between Ireland, the UK Europe, Israel and Morocco. Alongside its air passenger services, Ryanair offers a number of ancillary services including in-flight beverage and food sales, internet related services and merchandise among others. Through its website MY Ryanair, the airline markets accommodation services, travell insurance as well as hotel and accommodation services (Reuters 2021). As a result of COVID 19, Ryanair’s net loss for the year that ended March 31 2021 was 1.02 billion euros ($1.24 billion) compared with a net profit of EUR648.7 million in fiscal year 2020 ( Goriainoff 2021).
Ryanair operates in a very competitive industry where major players have resorted to consolidation in order to grow their market share. With supply now exceeding demand and most travelers opting for low cost carriers, major brands have also resorted to cutting costs in order to match low cost carriers. This has resulted in price wars which have left the industry less profitable, pushing small companies into bankruptcy. As of 2020, low cost carriers (LCCs) in Europe had 44.5% of the total seat capacity in the region. Despite a difficult year, Ryanair is still the busiest airline group in Europe, transporting 51.7 million passengers in 2020 as shown in figure 2.
Being the lowest cost carrier across Europe, Ryanair is likely to benefit more from today’s challenges as cash strapped consumers seek to get away on shoestring budgets.
Ryanair operates in a very competitive industry where major players have resorted to consolidation in order to grow their market share. With supply now exceeding demand and most travelers opting for low cost carriers, major airline brands have also resorted to cutting costs in order to match low cost carriers. This has resulted in price wars which have left the airline industry less profitable, pushing small companies into bankruptcy.
As of 2020, low cost carriers (LCCs) in Europe had 44.5% of the total seat capacity in the region. Despite a difficult year, Ryanair is still the busiest airline group in Europe, transporting 51.7 million passengers in 2020 as shown in figure 1 (below). Being the lowest cost carrier across Europe, Ryanair is likely to benefit more from today’s challenges as cash strapped consumers seek to get away on shoestring budgets.
Figure 1: Leading airlines in Europe in 2020, based on number of passengers (in millions)
In the following sections, the report examines the political, economic, social, technological, legal, and ecological environment Ryanair operates and how it is impacting its growth. The environment that organizations such as Ryanair operate in is increasingly becoming more complex, ambiguous, and volatile. This has made it essential for organizations like Ryanair to keep up with the changes in the wider environment in order to survive.
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