SWOT analysis of Ryanair
Lowest cost base Ryanair’s focus on having the lowest costs in the marketplace. Its drives every main decision, such as the choice of airports in its network. Ryanair maintains low enough costs to enable ultra low cost ticket prices by operating a young, homogenous, medium sized fleet; flying in and out of smaller regional airports, charging ancillary fees, and paying less for labor than other airlines.
Airport choices As noted above, Ryan air derives a important cost advantage from its choice of airports. For reduce their cost, Ryanairs usually choice uncongested airports.
Ryanair has faced ample criticism for some of its ancillary fees, customer service, and employee relations. Ryanair touts itself as a no frills airline, yet has fees that exceed those of other European low cost carriers. They charge €6 for online check in per person, and €60 if the passenger does not bring his or her own boarding pass or requires a reprint. Since the €6 fee is unavoidable (except on special promotional fares), many complain that this should be included in the ticket price.
Ryanair seeks to cut costs in any way possible, often leading to either not providing or charging for services that most people consider morally obligatory. Some notable instances of poor customer are in 2002 when the company refused to provide wheelchairs for disabled persons at London Stansted Airport and, also in 2002, when the company reneged on an offer to give their millionth customer a free travel prize.
Although the lower labor costs and high labor productivity are strengths for the company, Ryanair faces frequent criticism for its employee relations. The airline refuses to recognize any unions, and one pilot won a lawsuit against the company after being fired for handing out a union form to one of his crewmembers.
Ryanair currently operates short-haul, point-to-point flights within Europe, primarily the EU. One opportunity for them is to expand the market that they serve. Although they had planned to expand to offer cross-Atlantic flights, Ryanair recently announced it was abandoning plans to offer long haul flights for the time being. Opportunities for growth outside of expansion revolve mainly around additional cost cutting techniques or additional ancillary fees.
Market share gains and market growth. Although notoriously cyclical and currently going through a sluggish phase, by common consensus, the European aviation sector remains a growth industry in the medium to long term.
Fuel price and currency movements The main threats Ryanair faces come from competition, uncontrollable factors such as jet-fuel costs, Ryanair has excelled at developing point-to-point routes in geographic regions with potential prior to other low cost carriers. Yet, as low cost carriers continue to gain a market share and full service carriers continue to adjust their practices in order to compete with low cost carriers, competition for Ryanair will increase.
Air travel taxes. Due to price elasticity, increases in air travel taxes reduce demand. Those place that potentially vulnerable to rise in air taxes in countries such as the Northern Ireland. That is why Ryanair says it will reduce its exposure to the Northern Ireland market.
Loss of management focus. Given Ryanair’s track record of profitable growth in all conditions, the most significant threat to its continued success is a loss of management focus.
Other uncontrollable factors that serve as threats to the airline industry as a whole are economic shocks, as airlines are hurt when the economy is worse, and natural disasters that may disrupt the ability for airlines to fly in certain regions.(full year result 2012) Airlines can offset risks of sudden and extreme volatility with fuel hedging, for which Ryanair spent €320 million to hedge 90% of its fuel17, but the future of oil prices are a threat regardless.( Daniel Geller 2013)