This is the detailed PESTEL/PEST/PESTLE analysis of Ryanair which is renowned Irish airline. It has been operation in Airline industry, therefore facing political, economical, technological, environmental and legal factors. These factors could be positive for Ryanair however, it’s depends company strategies how they respond to these factors.
Ryanair is the Irish airline and it is the low cost short haul airline, which is operating its flights on limited number of destinations. This airline has the vision to fly at the cheapest rates on their destinations and it is, perhaps, the most suitable airline from the passenger’s point of view. Due to economic recession in Europe, the airline was suffered badly and there was serious decline in their earnings during last year and it is trying to overcome the loss of previous year. Now it has started its growth at 3% in the first year and it will be stabilize at the 4.8% in the midterm. The PESTEL analysis will help to understand the possibilities of market, the growth rate and the profit of the company in the current economic position within the country.
The political system in the country and their relationships with other countries has great impact on the airline industry. Ryanair is small and low cost airline and it has limited number of destinations, on which it is operating flights, so there is great effect on its business. Many airlines are flagship airlines and they have to abide by the political policies of the country. They think the free competition between the airlines can be threat to the state. The European Union has finished this trend as a result of liberalization of the airline industry. With this policy, the airline will make innovative pricing policy and product differentiation (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.48).
EU has issued directives for prohibition on subsidies by the government to airlines to establish level playing fields and this approach has shown the political developments in different countries (UK Essays, 2015).
The economic state of the country has great impact on airline industry. It has the direct relation with economy and trade cycles and the low cost airlines like Ryanair is less affected if compared with other airlines. When the business activities are reduced, then the number of passengers are reduced so the airline do not have enough passengers on any specific destination, which cause loss to airline (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.50)
The economic crisis result into downfall of the passengers to travel through their airlines and their revenues were also reduced and the passengers made booking of the seat at last time. The economic recession has bad impact on spending of the individuals and families. When the business activities are reduced due to economic recession, then the airlines observed the shortfall in their revenues (UK Essays, 2015).
The passengers look for the safety in the airline and if the passengers feel safe, then they will prefer to travel from the airline. In case of any mishap or fear of terrorist attacks, passengers will avoid getting boarding and the revenue of airline will decrease. There may be some health issues like avian flu or swine flu, it can shatter the trust of the passengers. If there is change in the demographics of the European Union, it can affect the airline industry. When the low cost flights are available then most of the people will like to travel by air and it will not remain a luxury for the people (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.51).
Ryanair is Irish airline and the staff of the airline is very polite and hospitable. The passengers impress with their habits and well beings. The airline provides excellent ground and in air services to the passengers. The passengers will surely prefer this airline due to their hospitality and low cost of their tickets and enjoy with this unique chance to travel through this airline.
The emergence of internet and development in the technological innovations has created new change in industry. The video conferencing has provided the facility to people and especially to businessmen and they do not feel necessity to travel anymore and they can deal their business through this innovative technology. The airlines develop their webpage and they can get information on the internet about their flights and they can get booked their seats online (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.52).
The airline provides the facilities of audio songs and movies during the flights on their LCD screen and passengers can enjoy during their flight, so it can become great chance to enjoy with latest technology. The passengers can get complete information about any airline online and they can know the time and fair of the flight to any particular destination. The airlines have introduced new and latest software for providing information and providing services. With the advancement in technology, the business is spreading quickly and it provides more and more facilities and solve the issues of the passengers amicably.
Due to increasing awareness about environment, the airline industry has to face various problems from the environment protection agencies and also from the passengers. The governments have made policies for the protection of environment and introduce the EU Emissions Trading Schemes and it will control the CO2 emissions to encourage the industries to improve efficiency of CO2. The airlines will have to follow the environmental rules and they will help the governments to safeguard the environment by using latest technology and equipments (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.52).
Environmental issues have key focus for any global airline and the demand of the airline has been increased considerably to share in lowering impact of carbon footprint. Now it becomes the big airline as it has large number of airplanes and they fly to different destinations daily. With the increase in getting the goal of environmental awareness, Ryanair has to minimize the impact of carbon footprints on the environment (UK Essays, 2015).
IATA is the international air traffic agency and it has made some rules and regulations to operate the flights across the world. The airlines have to follow these regulations and provide necessary benefits to the passengers. The airlines have to face the issue of airport ownership in which some of the airports are government owned and some are fully privatized. They can give the monopoly to the management and it can give the competitive advantage but the privatized airports can have to face the operating cost. EU has issued the recent legislation to provide the better and sufficient rights to passengers, who travel from EU countries (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.49).
UK Essays (2015), PEST Analysis of Ryanair, available at https://www.ukessays.com/essays/marketing/pest-analysis-of-ryanair-marketing-essay.php
UK Essay (2015) (1), PESTEL Analysis of Ryan Air Management Essay, available at https://www.ukessays.com/essays/management/pestle-analysis-of-ryan-air-management-essay.php
Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana (2009) Page 47, Valuation of Ryanair, available at, https://www.scribd.com/doc/45679258/73/PESTEL-Analysis