Environmental And European Airline Industry Analysis

environmental And European Airline Industry psychoanalysisHistoryRyanair has cock-a-hoop since 1985 with only 25 staff members and a single 15-seat turbo-prop commuter carpenters plane flying amongst Waterford and London. By 2001 in that location argon to a great extent than 1500 employees functional for Ryanair and more than 10 million passengers are carried to 56 cities in 13 European countries. Nowadays the comp any is named as the most popular air passage on the web by Google and alike passed out British Airways to plump the UKs favourite air lane in United Kingdom and throughout Europe. foreign missionary work and ObjectivesRyanair does not publish a formal vision or mission statement. Due to the accession of passengers, the company has re-launched as a no frills flight path to meet the wants of travelling at the depressedest price. It aims to expand its trade overlap, and increase more routes and destinations. in that respectfore it can become the 1st libera lst airway and importanttain the pip in the industry.Reasons for successThe reason of Ryanair success because it implements opposite marketing strategy to make the company survive in the opposition and to be able to gain competitive position in the flight path market. For example, its no fills strategy. In ordinance to position itself in the marketplace, Ryanair controls aver its be to offer the lowest fares possible and remain profitable.Chapter 2 Environmental European Airline Industry Analysis2.1 The PESTEL AnalysisThe Political FactorsThe Europe compass north (EU) has expanded in the past few years, and it leave behind be a big factor affects the direction and strategy planning for Ryanair. And some countries turn back preferential treatment to companies from their own country, i.e., France government has the policy to support its own national carriers which affects the expansion of Ryanair.The Economic FactorsThe unstable give notice price is change the task. In the face of rising displace, hedging on future get of fuel to stable the constitute as fuel is a study cost for e really airline. to a fault, the depreciation of US dollars affects Ryanair because customers from United States will tailor-make their orders as US dollars are depreciating.The Socio-cultural FactorsThe increasing travelling lifestyles become a factor to affect the business of Ryanair. Nowadays people are more enjoy a travelling lifestyle, i.e., graduation trips, backpack trips etcetera They cope to travel all around the world. Therefore, these people become the major customers for the company.The technical FactorsTechnology is rapidly improving means the whole industry is changing, bonnie more environmentally friendly and efficient. more effective infrastructure in the airports means that some airports can charge the airlines more for landing there.The Environmental FactorsUnder the impertinently law, the airline industry has to be more environmentally friend ly. Therefore the manufacturers, designers and airline companies gestate to combat this together to reduce ampere-second dioxide emissions and less harmful to the environment so its order to comply with EU regulations.The Legal FactorsThe whole industry is heavily regulated due to laws and they cod to constantly adapt to new changes in the law, such as not allowing liquid on board. After 911, the tighten security measure has also affected the business, the government reinforce security, it increases costs, and forcing to push the airline ticket prices up.2.2 The five Forces AnalysisCompetitive RivalryRyanair has full(prenominal)ly competitive rivalry because the large number of competitors and especially since the airline industry market is completely saturated. There are already many no frills airlines, i.e., easyJet, Monarch Airlines, and Air Berlin etc. If those companies decide to compete on the same basis as Ryanair, there will be a heavy pressure on prices and margins to Ryanair.Suppliers negociate proponentThe bargaining power of suppliers is high for Ryanair. Price of aviation fuel is directly related to the cost of oil. The costs from one supplier to the other(a) are high because all mechanics and pi divides would have to be retrained. Therefore, Boeing is the main suppliers of Ryanair. For those bigger airports where Ryanairs competitors operate, have greater bargaining power. Ryanairs policy is tried to avoid these airports and focus on the regional airports.Buyers Bargaining PowerThe bargaining power of buyers is medium. As customers are price sensitive to deal Ryanair, they only choose for cheapness not quality. Therefore if the prices are increased or a competitor has a lower price then they will drop to another airline.Threat of New EntrantsThe threat of potential entrants is low because tack up an airline is high capital investment and the risk is high. Also there are some barriers to entry, such as a lot of regulation and the press ure to reduce carbon emissions.Threat of SubstitutesThe threat of substitutes is high because of the competition with buses, trains, cars and ferries. These can all substitute the low-cost airlines like Ryanair.2.3 The Scenario AnalysisAccording to the socio-cultural factors, the market is becoming more competitive because of having the emerging and ontogeny countries, more people want flights therefore more airlines in order to accommodate this and it might decrease the profits in the market share. Furthermore, Ryanair is cl leaveing the increasing trade-union pressure in Europe. Some of the countries in Europe have formed a trade-union among each others, thus it gives the pressure for Ryanair to do business in these countries.Chapter 3 SWOT Analysis3.1 StrengthsRyanair has developed a very well recognized brand name by leading low cost airline. It hand overs high seat density and high service operation punctual, high rate of flight completion, low baggage loss, these give a go od come across of the companys reliability. Ryanair has first mover advantage in firm bargaining power in airport deals and reduces barriers to its entry into new markets and airports. everywhere 94% of all seats are sold online so the cost of distribution by using internet booking is lower than sound booking, also eliminates the need of travel agents. Furthermore, the single model of Boeing aircraft saves on training, alimony and supervisory costs.3.2 WeaknessesRyanair is based on no frills strategy, it restricted expansion possibility. The capacious distances of its airport from city centers can become less attractive as markets mature. Over time customers may find this a big inconvenience. Besides, the team spirit of employee is low. The weakening employee relations are detrimental to success in any services industry. Other weakness of Ryanair is high turnaround would increase the fuel consumption and carbon dioxide emissions, therefore the costs will be increased.3.3 Opport unitiesAs the EU enlargement, there will be a lot of new destinations opened up and complete deregulation of airline industry in all EU markets. During any financial downturns, the new fleet could be leased out to undercut other sources and increase entrepreneurial activities will be a source for economy air travel.3.4 ThreatsThere are several threats on Ryanair. First, impending legislations for environment protection and customer compensations increase costs. Secondly, the increase in market share at the cost of mesh topology airlines could also increase airport service charges which are currently low. Then, traditionalistic airlines are also cutting fares and costs which could affect the market share of Ryanair. Finally, additional fleets may require new terminals and secondary airports which mean Ryanair would need to bear higher cost.Chapter 4 Evaluations Recommendations4.1 EvaluationThere is a point-of-difference between Ryanair and larger airlines such as British Airways ( BA). Ryanair is the Europes largest low-cost carrier and provide only basic-level service but BA is a high-class airline company which provides high perceived service, and they focus on difference position and target customers so it is quite difficult for larger airlines to imitate the strategy. More than that, Ryanairs no frill strategy is sustainable for identifying their target customers who are price-sensitive and regard to spend low price to fly safely.4.2 RecommendationsA low-cost image of Ryanair that has become its brand tag will be difficult to discharge when it wishes to moves up the value chain, and the upper-middle class economy travellers may seek greater value proposition, not just for low fares. I suggest Ryanair add more routes to their already extensive network and plan for expanding operations into non-European markets in the near future. Furthermore, consolidation and integration would become necessary to grow come on in maturing markets which could help Ryanai r to offset pressure on its costs and fares. fictitious character ListsCase Study on Ryanair, the biggest low-cost European Airline (Jan, 2008) onlineAvailablefrom Accessed 21/07/10Thomas M. Box (2005), RYANAIR (2005) SUCCESSFUL LOW COST LEADERSHIP, onlineAvailable fromAccessed 20/07/10Yahoo Knowledge (2007), Assignment for strategic analysis, online Available fromAccessed 20/07/10