It also aims to explore the opportunities and the threats facing the airline. Paulius bagdanskas u1271535 travel and tourism management university of huddersfield module. In addition, this financial analysis supports ryanairs past and pending strategic decisions, based on being a low fare air carrier. Also, there is an important pressure on trading in an more ethic way. Airline industry mergers happen in line with changes in the dynamic economic conditions of the aviation industry. It has been operation in airline industry, therefore facing political, economical, technological, environmental and legal factors. Ryanair flies over 1500 different routes and carried more than 79 million passengers in 2012. One of the preconditions for the merger deal is getting appropriate. Ryanair immediately responds to opportunities and threats in order to cut costs and sustain the low cost basis e.
An economic analysis of the ryanair aer lingus merger case. Low large barriers to entry exist for airline industry associated with the large fixed cost for operations and startup, economies of scale, access to distribution channels and many more. Pestel or pestle analysis, also known as pest analysis, is a tool for business analysis of political, economic, social, and technological factors. Ryanair strategies eneri engel ekaterina blokhina lucy mcgee merikatre siim ilja lissov 12112014 thank you. Pestel framework was adopted to dissect in depth the current external macro environment of. The uks competition commission last year told ryanair that it must sell a 5% share of the 29. Following an indepth merger investigation, the commission prohibited the proposed takeover in june 2007 2007 prohibition, but did not force ryanair to divest the minority shareholding that it had built up during the. Ryanair pestle and swot analysis presented by ali hadi waqar ur rehman overview introduction pestle. Health will always be a concern, no matter your age. From the case study page 703 it states that the french government attempted to protect air franceklm by forcing easyjet and ryanair to. Ryanair the future of the leading low fares airline. Ryanair case analysis group 03 mm01 r1 free download as powerpoint presentation. In october 2006, ryanair announced a takeover bid for the entire shareholding of aer lingus the proposed takeover.
Pestel analysis has been undertaken to evaluate the external environment of ryanair. Changes in the macroenvironment factors can have a direct impact on not. Hospital management of swot and pestel assignment essay. Keywords airline industry, merger, market power, consumer welfare, price effects jel class l40, l93. Introduction recently, the commission prohibited the hostile takeover by ryanair of aer lingus. This report illustrates an analysis of ryanair competitiveness, adaptation to the macrolevel factors in the united kingdom and factors contributing to its current success. The eu commissions record in merger cases has been somewhat mixed. This chapter refers to two main fields of aviation literature, namely the analysis of the lowcost business model and the study of dynamic pricing techniques, with respect to the case of ryanair. Understanding ryanairs external environment and industry. Got it the dubai health authority has decided to set up a multi specialties to provide better quality treatment for the patients. Low costsaircraft equipment costspersonnel productivity customer service costsairport access and handling 1. Ryanair cut further jobs as a result of this tourist tax.
This report is based on ryanair holdings plc which was established in 1985. Ryanair case analysis group 03 mm01 r1 airlines low cost. A recent liberalization act came under the form of the euus. These factors could be positive for ryanair however, its depends company strategies how they respond to these factors. This pest analysis of the healthcare industry provides a glimpse into how the system works, and how it could change in the future. Low quality services and attitude toward customersdisabled peoplelow quality services opportunity threat 1. On the other hand, vertical analysis allows the management to compare each element in the financial statement and their impact. If the passengers tax increases to a higher rate from the existing low rate, it will have a negative impact on the sales of ticket. The nature of international aviation has changed dramatically as international markets have been gradually deregulated. This will involve investigating the organisations external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate key strengths and any weaknesses that need dealing with.
As already described in the introduction, the european airline industry has grown so quickly over the past two decades and to understand the challenges and opportunities that ryanair has, it is necessary to analysis its external environment and its industry. Why aer lingus acquisition is the best thing that never. This will involve investigating the organisations external environment, to identify opportunities and threats it might face, and its strategic capability, to isolate. This is the detailed pestel pestpestle analysis of ryanair which is renowned irish airline.
This objective report is to carry out an indepth analysis of the both the internal and external environments of ryanair by using the strategic models. Qualitative data analysis based on lcc passenger interviews also reveals interesting. Horizontal analysis allows the management to trace and track changes over a period of time. Thats because the best strategiesthe ones that position organizations for their best chance of success in a particular time periodare developed in large part based on external factors in which a company operates. The main area in which cvs care is dealing includes retail of pharmaceutical products, and pharmacy benefit management. Ryanair also offers various ancillary services including inflight sale of beverages and food, car hire services, internetrelated services etc.
Ryanair is a low cost passenger airline that operates short haul between ireland, uk and continental europe gill, 2005. The company is based in woonsocket, rhode island, u. Pestle analysis not only reveals all the significant environmental factors, but also analyzes the power of their impact on. Ryanair was the first airline established in europe following the lowcost airline business model, hence the organisation has a large amount of accumulated expertise in the industry creaton, 2008. The critical loss analysis the critical loss analysis cla builds directly on the definition of an antitrust market contained in the notice on market definition, that is. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals.
Pdf strategic management practices by morrison plc, uk. Ryanair does not have material influence over aer lingus. Analysis of ryanair and its business environment 1871. Strengths ryanair is the biggest european airline company. Introduction to the pestle analysis tool pestle analysis is a useful tool for understanding the big picture of the environment in which you are operating, and the opportunities and threats that lie within it. This aircrafts homogeneity leads to lower cuts maintenance costs. You can click the link to directly to go to the relevant section. The way coffee houses produce coffee is becoming more and more submitted to high standards of quality. One strategy for ryanair would have been to merge with another competitor such as aer lingus to gain. The kraft heinz company pestel analysis is a strategic tool to analyze the macro environment of the organization. It summarises all the external factors, which might create opportunities or cause significant threat to ryanair s operations see. The uk government increased the tax more than three times in the last 24 years both on the long distance and short distance journey. Strategic management practices by morrison plc, uk. It is quick and easy to fly any where in europe with ryanair.
Ryanair holdings plc exact name of registrant as specified in its charter ryanair holdings plc translation of registrants name into english republic of ireland jurisdiction of incorporation or organization co ryanair limited corporate head office dublin airport county dublin, ireland address of principal executive offices please see. Ryanair is an irish airline established in 1984 and is headquartered in dublin, ireland. Pestel analysis political some countries give preferential treatment to companies from their own country. This section highlights the major forces which are present in the external environment of the company and explains the way they are giving opportunities, posing threats, or impacting its strategies and corporate objectives. In this post, we will share with you some of the key pestle analysis examples. Figure a5 political the political institution european union affects ryanair s strategy and operations by. An analysis of airlines financial performance and its influencing factors aarhus university school of business and social sciences department of business administration bscb 6. In 1986, ryanair manage to be the top of the aer lingus or british airways high fare cartel on the dublinlondon route. Feb 22, 2016 ryanair industry analysis a case study report 1. Oct 01, 2015 ryanair may have to reduce its stake in aer lingus 30. Ryanair s aim is to keep costs minimum so with continuing rising costs of production, ryanair has to continue to reduce its staff numbers. Pestel and swot analysis of ryanair management essay. Ryanair marketing strategies ryanair marketing strategies pestle analysis. Pestle analysis pestel analysis for merger of the ba and.
This can be done by use of promotions, and possibly the idea of flying for free if the passenger flies for free. It helps to take out sale agents commission and special offers would directly reach the customers without any discrepancies. Market penetration ryanair can increase the number of air passengers using the airline in its current market. Companies we have covered in this article are given below. Vision to firmly establish itself as europes leading lowfares scheduled passenger airline through continued improvements and expanded offerings of its lowfares service. An analysis on the competitiveness and lowcost strategy of europes leading lowcost carrier ryanair kindle edition by muller, christoph. For example, at starbucks, their strategy is totally based on this trend. This flexibility can be noticed whenever changes and innovations occur in work practices. Since 2004, 15 mergers in the airline industry have eeen suemect to regulatory clearance under the eu merger regulation guidelines henceforth eumr ey the. Ryanair has been deploying boeing 737800s, same fleet community in all its routes. The analysis of these factors affecting the decision is detailed as follows. An analysis of airlines financial performance and its. People worry about exclusivity, new diseases, less treatment, and how much access they can have. Ryanair obtains permission from the regulatory authorities to challenge the british airways and aer lingus high fare duopoly on the dublinlondon route.
Executive summary this report looked into ryanair s industry, its position in the competitive industry. Merger and acquisition in airline sector term paper. Econometric and survey evidence in the competitive assessment. Taxes cause a lot of confusion in merger models and lbo models, and even fulltime bankers rarely know how to treat everything 100% correctly. Macro environment of a company, pestle analysis, swot analysis will be discussed on this report. It is also the largest airline in europe, transporting more passengers than any other airline in the region. This detailed pestel analysis of the uk aims to address some of the political, economic, social, technological, environmental, and legal issues affecting the uk today. Mission ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost commitment and operating efficiencies. This includes any remedy requiring ryanair to divest its minority shareholding, or part of that shareholding. Ryanair boasts having the best customer service in the industry. This report has presented the financial analysis of two of the leading airlines of the world, ryanair and easyjet. Ryanairs main aims are to be the market leader of lowcost airlines, to attract new potential customers from smaller and bigger airlines and to sustain its low cost policy and value. It was founded as a merger of cvs pharmacy and caremark in 2007.
Mergers and acquisitions in the airline industry springerlink. It is the largest european carrier in terms of passenger volume in 2016 lufthansa wrestled the top spot in 2017 and is largely characterized by the successful implementation of the lowcost business model. From our analysis of the ansoff model above, we recognise that the strategic options available to ryanair include. The organisation selected for the paper is ryanair, which is the primary lost cost airline of europe and provides customers low fare flights for all places. Services are launched with two 46seater turbo prop bae748. Pestel analysis is used to analyze international companies as well as industries that are engaged in exporting and depend on international markets.
Ryanair s first attempt to acquire aer lingus was blocked by the european commissions decision of 27 june 2007 the 2007 decision. A swot analysis focuses on the micro environment of one of the above entities, i. In particular, it has been strongly criticised on occasion both by the european courts and by economists and other observers for inadequacies in its analysis. Hedging policy ryanair remains unhedged although pestel analysis concluded an instable environment ryanair added too much capacity in a short time frame overcapacity may lead to deteriorating load factor and danger of high fixed costs. In 1978 the deregulation was helping the industry to grow, which was began in us from which the deregulation act was shifted the control over the air travel from political to. In legal terminology, mergers and acquisitions can be defined as follows. Preferential treatment of home base airlines in some countries, at the same time they prevent thriving foreign companies and inflict them in more operational cost. A true merger in the legal sense occurs when both businesses dissolve and fold their assets and liabilities into a newly created third entity. Pestle analysis is a strategic tool that classifies the influence of environmental factors surrounding the business in the following categories. Ryanairs mission is to give the lowest fares at all times on all routes. In 2012, ryanair had a team of more than 8,500 employees and carried over 78 million passengers. The proposed merger would therefore have removed the currently vibrant competition between ryanair and aer lingus on all these routes where. S, however its services headquarters are based in nashville, tennessee. Bhh 4002 strategic management for the hospitality, travel and tourism industries module leader.
According to pestle analysis the key drivers of change are economic, political and legal factors as those factors threaten ryanair s business the most. You can use our pestle analysis examples and get good grades in your marketing assignment at the university. Using pestel framework in order to identify the challenges the company is likely to face in the future and what strategic advice would you give to volvo. Ryanair started in year 1985 with only 57 staff members and with one 15 seater turboprop plane from the south of east of ireland to londongatwick which carrie d 5000 passengers on one route. The ryanairaer lingus decision indicates that such criticisms have been taken on board by the commission. Discuss about the strategic management for ryanair. Ryanair is a flexible company thanks its nonunion work force. At the end of february 2012 ryanair announced that it plans to cut 300 jobs in edinburgh due to the high airport charges there. A full joining together of two previously separate corporations. Eu blocks ryanairaer lingus merger financial times.
Introduction ryanair, established in 1985, is one of the biggest airline carriers of europe with 1,600 low fare routes, a workforce of 9,500 and an. Ryanair was set up in the year 1985 by ryan family with a. A strategic analysis of ryanair johannes walder studienarbeit bwl unternehmensfuhrung. Strategic analysis of ryanair essay 4047 words bartleby. It thus benefits from scale over and above its rivals. An empirical analysis of a merger between a network and low. Ryanair lambasted the commission for singling it out while it was rubber stamping every other european airline merger with considerably fewer and less effective remedies than it proposed. It aims to analyse the strengths and the weaknesses of ryanair. Swot tows analysis of ryanair is a framework to evaluate the factors that create an impact on the airline industry at large and wield its influence on ryanair. Analysis of ryanair summary ryanair, one of the most famous low cost airlines, attracts attentions from people and researchers all over the world. Who are ryanair s customers 15 years into the future pestel ryanair political worldwide tourism if tourism continues to grow at the same rate it is now governmental regulation as a whole governmental security regulation breaking up of the eurozone if a. As the financial crisis and the european debt crisis have an obvious negative influence on the global economy, the aircraft industry has experienced some decline for the last few years. In tourism, one might use pestel analysis that helps assessing the global behavior of tourism demand.
Financial analysis for ryanair and easyjet propapers. Who are ryanairs customers 15 years into the future pestel ryanair political worldwide tourism if tourism continues to grow at the same rate it is now governmental regulation as a whole governmental security regulation breaking up of the eurozone if a. The company has reported an increase in the revenues in the year 2011 by 21. The walt disney company pestel analysis is a strategic tool to analyze the macro environment of the organization. Ryanair s further development and improvement towards customers, swot and pestel analysis of ryanair, placing ryanair in. Several papers have examined the effects of mergers in the airline market. Ryanair is an airline registered in ireland ryanair, 2017, however, as the airline maintains large bases in the uk, unfavourable brexit outcomes could negatively influence not just ryanair, but other lowcost airlines operations in the uk kilpatrik, 2017. Pestel analysis is a very useful tool that helps business strategists to understand the impact of the macroenvironmental factors on their businesses. In this article we will discuss political, economic, social, and technological, legal and environmental factors impacting woolworths. Existing strategies existing strategies directional.
Initially, the porters fiveforce model entails analysis of the threat posed by buyers, suppliers, industrial rivalry, substitutes and entrants. Understanding ryanairs external environment and industry commerce essay. This is particularly true in the european union where ryanair primarily operates. The facts of this case differ from previous airline merg.
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