Ryanair Airlines SWOT Analysis:Challenges for Ryanair, answers for the sameRyanair’s journey has not been a smooth run for the company over the years. Being inbusiness since 1985, it has carved a niche market for itself in being the most widely usedlow cost airline today. Global recession of 2008 definitely affected Ryanair in a hugeway. Its scope to increase fares and increase volume of passengers was hit hard. Sinceeconomies collapsed spending power of the regular consumer collapsed too.In this paper we are going to discuss the challenges and threats Ryanair has to face andwhat could be the probable recommendations for the same.As new opportunities become limited the low-cost carrier market’s growth slows downsignificantly. Ryanair must be prepared for the inevitable convergence of costs andconditions, but it will still retain the ‘no-frills’ advantage of high seat density and aircraftutilization coupled with lowest fares in any market. A SWOT analysis of Ryanair showsthat it would continue to dominate in the low-price market segment but it has toexpand to new routes and ensure services are going to better than before. Goodcustomer relations always help in creating customer value. This will require highemployee retention which is key to customer satisfaction. Ryanair has been previouslyaccused of being an adversely affected airline in the world with regards toenvironmental issues with a shortfall of 2.8 tonnes in CO2 allowances. This is in turncaused the airline loss of about € 40 million. Market conditions are always dynamic innature. Corporations have to constantly struggle to keep a foothold. To sustain andexpand in such a dynamic market requires critical analysis and planning on the part ofthe any corporation. Hence growth will slow down. Ryanair’s competition with otherlow-price airlines in such a market will require it to launch new routes and operations innon-European regions. This would help it to carve a niche market not just in the Europebut outside Europe as well like Turkey and Russia. This would require off-base (like crewlodging in areas not having home bases) service operations increasing operational costs.This will cut into its operating margins. At the same time, its improved services can havea positive impact on the share prices. Since stock market earnings are always based onexpansions and high operating margins they will continue to be vulnerable to marketdynamics. Ryanair is already the leader in the lower price segment and it needs to caterthe rapidly growing value segment to have total domination. The value segmentconstitute travelers interested to optimize time, comfort and price. Preferences would
have to be given to city-centric airports, convenient departure and arrival times, andbasic service. Competitors like EasyJet, Air Berlin, Basic Air, BMIBaby are catering to theValue market segment. They have been successful in establishing slots at some primaryairports and providing basic cost effective services. Acquisition of Aer Lingus has notonly enhanced Ryanair’s expansion plans and market share but also helped it to stay inthe top position of being in the low-price segment.The SWOT analysis given below explains how Ryanair can achieve its goals and missionby capitalizing on opportunities and utilizing its strengths and eliminating its weaknessesand threats.
STRENGTHSBrand Name (25+ yrs) Poor service Prone to bad pressRevenue Growth Low airport charges Secondary airports too far awayLow distribution cost Weak employee relations Micheal O’Leary’s aggressive Leadership High turnarounds (CO2 emissions)No hub and spoke Misleading website WEAKNESSES Low maintenance Niche Market BoeingsLCC market share can double Fuel costs THREATS EU enlargement Increase in low fare airlinesOpen skies agreement Launch of new routes Customers are price sensitive Fleet expansion Threats to security OPPORTUNITIES EU regulationsIncrease in entrepreneurial activities Dependence on economic cycle