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Ryanair SWOT Analysis
Introduction
Ryanair's deal to purchase 100 Boeing 737MAX aircraft, plus an additional 100 options, for deliveries during 2019 and 2024 permits the airline to moderately increase traffic growth. After four years of rapid growth in passengers carried by 3% to 5% per year, it appears that this will increase to 6% per year starting in FY2016 (year to March). The MAX's superior fuel economy and a bigger number of seats will result in considerable operational cost-per-seat reductions for Ryanair. Because of its negotiation strength, Ryanair is expected to negotiate favorable conditions with Boeing, giving it a competitive advantage in ownership cost per seat.
The company's current product and service evolution have added new aspects to the competition's foundation. Cheap fares (based on low expenses) will, nevertheless, continue to be its fundamental competitive advantage. We look at Ryanair's primary strengths, weaknesses, opportunities, and threats in this research.
Ryanair's Strengths
Ryanair started operating with a 15 seat aircraft 35 years ago. Only airline staff less than 5''2' could operate in the cramped cabin. Ryanair and its affiliates already have 470 planes.
Ryanair has a fleet of around 450 aircraft. Michael O'Leary, the company's CEO, wants to expand the fleet to 600 planes. Other airlines are shrinking their fleets, and Ryanair is reportedly in talks with Boeing for a 737 MAX, according to Forbes.
Ryanair has a strong financial position: with a year-end cash equivalent of 3.8 billion Euros, according to a statement filed with the Irish Stock Exchange. Ryanair, in a separate release, forecasts a profit of 1 billion Euros for the fiscal year.
Business Model: While other airlines tried frantically to cut expenses during the epidemic, Ryanair's business strategy is based on keeping costs as low as possible. Ryanair, in particular, keeps expenses down by charging more for non-essential services.
Stock Market Achievement: Ryanair's RS Rating was improved to 83 by Investor's Business Daily. The RS Rating compares the performance of a company's stock to the rest of the market over 52 weeks. Ryanair has an 83 rating, making it one of the best airline companies to invest in.
Routes: Ryanair has the most routes of any airline on the planet, with 1831. In the second place, American Airlines provides 1106. The differential gives Ryanair a commanding advantage over its next competitor, with over 65 percent more routes.
Despite the difficulties: Ryanair has been able to maintain its success due to its business strategy. Ryanair has a natural edge in the art of running a low-cost airline. Although some airlines predict that the sector will recover by 2023, Ryanair is aiming to break its previous record of 190 million persons each year.
Ryanair's Weaknesses
EasyJet is Ryanair's main competition. EasyJet, on the other hand, has been heavily damaged by the economic downturn. According to the Financial Times, EasyJet is on track to make a profit for the first time in 25 years. However, Ryanair's problems are due to internal concerns rather than competition.
Customers are furious with Ryanair's return policy: Only 5% of the refund applications were processed within the legal period, according to Ryanair. Customers are also dissatisfied with Ryanair's decision to provide them with time-limited coupons rather than a cash return.
Grounding and layoffs: In June of last year, Ryanair halted 99 percent of its aircraft. Due to restructuring, the corporation also laid off 3,000 people. With 15% of its staff let off, Ryanair will face an uphill battle to meet lofty ambitions of exceeding its performance in 2019.
Controversies: Michael O'Leary, the CEO of Ryanair, has argued that managing an airline with social distancing is dumb. The remark is one of several instances in which the CEO has gone against the grain.
Bad Reputation: Ryanair was ranked worst in a survey of 7901 participants, with a customer satisfaction score of 40%. For the past six years, Ryanair has been in the same situation. Ryanair's complex pricing structure, which makes the passengers leery of hidden expenditures, is the cause for the poor customer score.
Strikes: Ryanair was unable to obtain a favourable judgement from the High Court to put an end to a 48-hour strike called by the pilot union. Due to persistent disagreements over working conditions and pay, 80% of the union's members voiced displeasure.
Ryanair's Opportunities
Help from Government: The Bank of England's COVID Corporate Financing Facility will help Ryanair, which is one of 53 firms that will profit. Ryanair has borrowed 800 million euros under the plan.
Survival: CNN reports that 20 airlines have closed or filed bankruptcy. Ryanair, on the other hand, has demonstrated its resiliency in the face of two Gulf Wars, the 9/11 terrorist attacks, the 2008 financial catastrophe, and increasing fuel prices. In other ways, the crisis may benefit Ryanair by removing Ryanair's competitors.
Hiring: Ryanair has the potential to hire the best possible personnel, with thousands of qualified professionals like pilots, ground workers, cabin crew, and engineers fighting for re-employment.
The slump in the Aviation Industry: Airbus, the world's largest airplane maker, proposes to cut 15,000 employees. The COVID travel limitations had a significant impact on airline manufacturers. However, there might be an opportunity for Ryanair to obtain planes at a lower cost.
Shares Market: Morgan Stanley forecasts a surge in Southwest Airlines stock if travel restrictions are lifted and air traffic went back to normal. Southwest's European counterpart, Ryanair, might see a similar increase in stock valuation.
Ryanair's Threats
Restrictions for COVID-19: Many countries' responses to the COVID situation are characterized by confusion and unpredictability. The aviation sector may be taking a step back with every stride forward in the absence of a structured and consistent recovery plan.
Video Calling: According to a report published in the Chicago Booth Review, firms conduct 50% of their encounters with external stakeholders using video conferencing. The revenue stream from business travelers would be jeopardized as a result.
Vaccine Access: United Airlines' CEO expresses his concern that air traffic will not start recovering until a vaccine is widely available. He intends to achieve the goal by the end of 2021. People also need to feel safe in a crowded environment. As a result, the return to normalcy is delayed.
Customer Trust in Air Travel:A roundtable of the brightest brains in the Middle East's aviation industry addressed how to increase customer confidence in air travel. They indicated that optimism will return to normal but that it will take a massive, collective campaign.
Ryanair is a low-cost airline that operates in 40 countries. Each country has devised its strategy for combating the pandemic. Ryanair is unable to establish a clear recovery strategy as a byproduct of this discrepancy. Ryanair's biggest threat is inconsistency.
Ryanair SWOT Analysis Mind Map
This is a comprehensive Ryanair SWOT analysis. Its goal is to examine Ryanair's strengths and weaknesses. It also tries to investigate the airline's potential and dangers. Ryanair is an Irish low-cost airline with its headquarters in Dublin. It was formed by the Ryan family in 1984.
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Key Takeaways
Ryanair's business model is solid. Customer and employee interactions, on the other hand, are hampered by the company model. However, throughout the previous few decades, the strategy has provided stable returns to stakeholders and supported the sustained expansion. As a result, Ryanair's prospects are bright.
When it comes to the airline business, COVID-19 is now a clear concern. As a result, the manufacturing economy reduced its expenditures. However, Ryanair's operations have always been based on keeping costs low. As a result, Ryanair is the best-prepared airline to deal with the pandemic's aftershocks. This is what sets Ryanair apart.
This study has observed the advantages of developing, executing, scaling, and defending a strong business strategy. There's a lot you can still learn with mind maps as it has all the key information about Ryanair. You can have the pre-made template from EdrawMind to properly edit the mind map.
