Ryanair SWOT Analysis 2022 ❤️

Ryanair SWOT Analysis of the Leading Low-Fare Airline Ryanair is Europe’s top low-cost airline that offers the most affordable fares on the market for airline tickets. 

The question is, however, how this small Irish firm could count 103 million international travelers in the year of fiscal 2015 thirty years more (Ryanair 2015). 

What is the reason why Ryanair enjoys a strong recognizability value for its brand despite having its advertising internally and only distributing using websites? 

Furthermore, Ryanair does not offer loyalty programs for customers, they don’t offer complimentary drinks or meals on board as well as they do not require external power to cleanse their fleet. 

ryanair swot analysis

Why is it that not any other low-cost airline, such as Easyjet as well as Lufthansa’s sister company Germanwings did not take advantage of Ryanair’s competitive advantage in setting the price on the market? 

In reality, they tried, but it was not successful. What makes Irish Airlines? Irish Airlines and how successful they are in their competition with airlines today, will be explored further by using SWOT analysis.

Introduction

Ryanair’s agreement to acquire 100 Boeing 737MAX planes and 100 options for delivery between 2019 and 2024 allows Ryanair to moderately increase the amount of traffic. 

In the aftermath of four years of explosive growth in passenger numbers by 3%-5 percent per year, It is expected that this number will grow to 6% annually beginning in FY 2016 (year from March). 

The MAX’s better fuel economy and increased quantity of seats will lead to substantial reductions in operational costs per seat for Ryanair. 

Because of its negotiation power, Ryanair is expected to reach favorable agreements with Boeing and gain an advantage when it comes to costs of ownership per seat.

The company’s recent development of its services and products have brought new features to the foundation of competition. 

The low-cost prices (based on lower costs) will remain the company’s primary competitive advantage. 

We examine Ryanair’s main strengths and weaknesses, as well as opportunities as well as threats, in the study.

 Strengths In The SWOT Analysis Of Ryanair’s

Ryanair began operations with an aircraft that could seat 15 passengers around 35 years ago. The airline’s staff who were less than 5’2’2′ could work in the cramped cabin. Ryanair as well as its subsidiaries have 470 aircraft.

Ryanair has a fleet of 350 planes. Michael O’Leary, the CEO of the company, is looking to increase the number of aircraft in the fleet to 600 aircraft. Other airlines are reducing their fleets. Ryanair is believed to be having talks with Boeing to purchase the purchase of a 737 MAX, as reported by Forbes.

Ryanair has a solid financial position With an end-of-year cash equivalent of 3.8 billion euros according to a document that was filed with the Irish Stock Exchange. Ryanair in a separate press release expects the company to earn 1 billion Euros in the fiscal year.

business model: Although other carriers attempted to reduce expenses during the crisis the business model of Ryanair is built on making expenses as minimal as they can. Ryanair is the only one that reduces costs by charging more for less essential services.

Performance of the Stock Market: Ryanair’s rating was upgraded to 83 from The Investor’s Business Daily. Its RS Rating compares the performance of a company’s stock with the overall market over the last 52 weeks. Ryanair is rated 83 which makes it among the top airlines for investors to consider investing in.

Routes Ryanair is the airline with the most route options on earth and has 1831 routes. Second in the list is American Airlines provides 1106. The difference gives Ryanair an edge over the next airline which has greater than 65 percent more routes.

Despite its challenges: Ryanair has been in a position to sustain its growth because of its business plan. Ryanair is a leader in the field of managing as a low-cost airline. Though some airlines forecast that the sector will be booming in 2023 Ryanair intends to surpass the old record by bringing in 190 million people every year.

 Weaknesses In The SWOT Analysis Of Ryanair’s 

EasyJet is Ryanair’s primary competitor. EasyJet however, on the other however, has been badly hit by the downturn in the economy. In The Financial Times, EasyJet is in the process of turning a profit at the beginning of over 25 years. The problems with Ryanair stem from internal issues more than the competition.

Customers are furious about Ryanair’s policy on returns: Just five percent of refund requests were handled within the timeframe allowed by law According to Ryanair. The customers are also dissatisfied with Ryanair’s decision to issue them with coupons with a time limit instead of cash returns.

Layoffs and groundings: In June of the previous month, Ryanair shut down 99 percent of its fleet of aircraft. In the wake of the restructuring, the company also cut 3,000 employees. The company has cut 15% of its employees dismissed, and Ryanair will face a difficult task to achieve its lofty expectations of exceeding its results in the coming year.

Controversies Michael O’Leary, the CEO of Ryanair has stated that running an airline using social distancing is stupid. The comment is one of many instances where the CEO has been against the norm.

Bad Reputation Ryanair came in at the worst in a poll of 7901 people, and a score of 40 percent. For the last seven years, Ryanair is in this position. Ryanair’s complicated pricing system, which makes customers wary of hidden costs is the reason for the poor scores of customers.

The strike: Ryanair was unable to get a favorable decision in the High Court to put an end to the 48-hour strike that was called by the pilot union. In the midst of ongoing disputes over pay and working conditions, 80 percent of union members expressed their displeasure.

 Opportunities In The SWOT Analysis Of Ryanair’s  

Assistance from the Government: The Bank of England’s COVID Corporate Financing Facility is designed to aid Ryanair which is one of 53 companies that will make a profit. Ryanair has taken out 800 million euros of credit under the scheme.

The survival: CNN reports that 20 airlines have either shut down or declared bankruptcy. Ryanair however, on the other hand, has proven its resilience through the two Gulf Wars, the 9/11 attacks on terror as well as the 2008 financial disaster, and the rising cost of fuel. Another way the financial crisis could benefit Ryanair is the sense that it eliminates its competitors.

Employment: Ryanair has the potential to recruit the best people, with thousands of highly skilled professionals such as ground workers, pilots cabin crews, and engineers who are vying for employment.

The decline within the Aviation Industry: Airbus the world’s biggest airplane manufacturer, is planning to eliminate 15,000 workers. The COVID restrictions on travel affected the production of airlines. But, there could be a chance for Ryanair to acquire planes for less.

shares market: Morgan Stanley forecasts an increase in Southwest Airlines stock if travel restrictions are lifted and air traffic goes in the direction of normal. Southwest’s European competitor, Ryanair, might see an identical increase in its stock’s value.

Threats In The SWOT Analysis Of Ryanair’s  

Restrictions for COVID-19 A variety of countries’ responses to the COVID issue are marked by uncertainty and confusion. The aviation industry could be making a back step with each step without an organized and consistent recovery program.

Video call: According to a report that was published by the Chicago Booth Review, firms use 50percent of interactions with stakeholders outside of the company using video conferences. The income stream generated by business travel would be impacted because.

Access to Vaccines United Airlines’ CEO expressed his worry that air traffic won’t recover until a vaccine becomes readily accessible. He plans to reach the goal by 2021. Also, people need to feel secure in a noisy setting. In the end, returning to normal is delayed.

Customer trust for Flight Travel: A roundtable of the most brilliant minds within the Middle East’s aviation sector focused on ways to improve customers’ confidence in flying. They predicted that the mood of travelers can be restored, but it will require an extensive, coordinated campaign.

Ryanair is an affordable airline operating in over 40 countries. Each country has developed its own strategy to fight the disease. Ryanair hasn’t been able to formulate an effective recovery plan because of this divergence. The biggest risk for Ryanair is inconsistency.

Limitations of SWOT Analysis for Ryanair Holdings Plc

While it is true that the SWOT analysis is extensively used as a tool for strategic planning, However, the analysis has some limitations.

  • Certain abilities or aspects of an organization can be both strengths and weak points at the same. This is among the main drawbacks of SWOT analyses. For instance, changing environmental regulations could be an issue for the company but however, but it could also be an opportunity in the sense that it can allow companies to be in a position to compete with its competitors or even gain an advantage over competitors when it is could develop the product quicker than competitors.
  • SWOT is not a method of determining how to gain competitive advantages and therefore it shouldn’t be a complete solution.
  • The matrix is merely an idea to begin discussions on how the proposed strategies might be put into practice. It also provided an evaluation window, but it did not provide any implementation plan based on the competitiveness in the strategic area of Ryanair Holdings plc.
  • It is a static evaluation and analysis of the current conditions with only a few potential modifications. As the environment, circumstances, as well as threats, and strategies, alter, the dynamic of the competitive landscape cannot be analyzed in one matrix.
  • SWOT analysis could make a firm overemphasize one external or internal element in formulating strategies. There are interrelations between the most important external and internal elements that SWOT cannot reveal, but could be crucial in determining strategies.

Weighted SWOT Analysis of Ryanair Holdings Plc

Due to the previously stated shortcomings of the SWOT analysis/ matrix, the corporate management has decided to assign an appropriate amount of weightage for every internal strength and weakness of the business. 

Companies also evaluate the probability of the events that will occur in the near future and what the effect can be on the performance of the company.

This technique is known as the Weighted SWOT analysis. It’s better than a simple SWOT analysis since with the weighted SWOT analysis Ryanair Holdings Plc managers can concentrate on the most important aspects and eliminate the less important ones. 

This also helps solve the problem of a long list which is when organizations make lengthy lists but not addressing any is considered to be important.

Key Takeaways

Ryanair’s model of business is sound. Interactions between employees and customers however are affected by the model of the company. 

But, over the last several decades, the company’s strategy has yielded steady profits for all stakeholders and has aided its continuous expansion. Therefore Ryanair’s future is positive.

Concerning the business of airlines, COVID-19 is now an obvious issue. In the end, the economy of manufacturing has decreased its spending. But Ryanair’s business has always been focused on keeping costs down. 

This is why Ryanair is the most prepared airline to handle the repercussions of the pandemic. This is the thing that makes Ryanair from other airlines.

This study has highlighted the benefits of creating, executing, scaling, and defending a solid business plan. 

There’s plenty to still learn from mind maps since it contains all the essential information regarding Ryanair. 

You can download the pre-designed template provided by EdrawMind to make the correct edits to the mind map.

References

  • Reuters (2017). Ryanair seizes Lufthansa’s crown as Europe’s biggest airline by passengers. [online] Reuters UK. Available at: http://uk.reuters.com/article/uk-lufthansa-traffic-idUKKBN14U1P4 [Accessed 22 Jul. 2017].
  • Rodionova, Z. (2017). Ryanair is cutting back on flights from the UK after the Brexit vote. [online] The Independent. Available at: http://www.independent.co.uk/news/business/news/ryanair-flights-brexit-eu-referendum-easyjet-british-airways-fares-prices-a7154366.html [Accessed 22 Jul. 2017].
  • Ryanair (2016). Annual Report. [online] Available at: https://investor.ryanair.com/wp-content/uploads/2016/07/Ryanair-Annual-Report-FY16.pdf [Accessed 22 Jul. 2017].
  • Ryanair (2017). History of Ryanair | Ryanair’s Corporate Website. [online] Corporate.ryanair.com. Available at: http://corporate.ryanair.com/about-us/history-of-ryanair/ [Accessed 22 Jul. 2017].
  • The Irish Times. (2014). Ryanair in €17bn deal for 200 Boeing aircraft. [online] Available at: https://www.irishtimes.com/business/transport-and-tourism/ryanair-in-17bn-deal-for-200-boeing-aircraft-1.1922102 [Accessed 22 Jul. 2017].
  • Tovey, A. (2017). The aerospace industry warns against ‘hard Brexit’. [online] The Telegraph. Available at: http://www.telegraph.co.uk/business/2017/06/14/aerospace-industry-warns-against-hard-brexit/ [Accessed 22 Jul. 2017].
  • Wyman, O. (2016). Airline Economic Analysis 2016-2017. [online] Oliverwyman.com. Available at: http://www.oliverwyman.com/our-expertise/insights/2017/jan/airline-economic-analysis-2016-2017.html [Accessed 25 Jul. 2017].

FAQs 

What is the SWOT / Tows assessment of Ryanair?

SWOT / TOWS analysis for Ryanair is a method to analyze the elements that have an effect on the aviation industry in general and exert an impact on Ryanair. The SWOT analysis offers insight into the internal as well as external influences, such as strengths, weaknesses, opportunities, and threats for Ryanair.

What is the competitive analysis for Ryanair?

Competitive Analysis of Ryanair. Analysis of TOWS and SWOT of Ryanair is a way to assess the variables that impact the overall industry of airlines and exert influence over Ryanair. The SWOT analysis offers insight into the internal as well as external influences, such as potential, strengths, weaknesses, and threats to Ryanair.

What is the reason Ryanair’s score for customers is so low?

The reason for the low rating from customers is Ryanair’s opaque pricing structure, which makes consumers cautious about cost-of-living surprises.

What is the business model of Ryanryanair?

Ryanair is the leader in the business model of low-cost airlines and has built up a significant amount of experience in the field through the decades. Being the most cost-effective airline in Europe allows it to enjoy an impressive price advantage over the other EU airlines. Indeed, it was named 11th as the best low-cost airline worldwide in 2018, as voted by passengers.

Ryanair SWOT Analysis: Conclusion

Ryanair is a reliable business model that is stable. But, the business model can cause problems in the relationship between employees and customers. 

However, the business model has delivered steady income to those who participate and has led to steady growth over the past few decades. So, the outlook for the future for Ryanair is favorable.

When we consider the aviation industry, the most obvious and immediate danger is COVID-19. 

This has led to all industries cutting their costs. In the end, keeping costs low is a key tenet of Ryanair’s operation. 

This is why Ryanair is the most well-equipped airline to deal with the effects caused by the pandemic. This is one of the things that is distinctive about Ryanair.

This SWOT analysis highlights the benefits of having a sound business strategy, then implementing it, extending it, and protecting it. 

There’s much to learn from Ryanair and its achievements and the strength of its business. We hope that you’ve gained from this reading.

If you’d like to know more about SWOT analysis, you should start by reading our guide on how to perform a SWOT analysis. 

There are also four SWOT analysis templates to use. If you’d like to see other SWOT analysis examples similar to this one, be sure to look through the SWOT analysis collection.

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