Ryanair PESTLE Analysis
PESTLE is the acronym for political, environmental, social, technological, legal and environmental, and this tool, devoted to carry out analysis considering the external influences to an organisation’s activity, is of fundamental importance to properly develop a reliable strategy.
The political aspect of this tool considers the possible political influence on the strategy pursued by the organisation. For Ryanair this aspect has represented a considerable advantage, in that the European Union is a completely stable political region and the EU integration has allowed the carrier to expand its activity and routes. On the other hand of it, the airline is affected by the decisions posed by other political organisations like the OPEC, the organisation that unite the oil producer countries and that decide on the oil costs, determining its output quantity, distribution and global supply chain. The incredibly high cost of fuel has strongly affected ...view middle of the document...
On the other hand of it, it is very likely that the younger generations are much more likely to use carriers for their travels and are the more and more enjoying the benefits of a common European area where they can move from a capital to another in an average 1 hour 45 minutes time at very low prices.
As for the Economic factors, one of the most relevant indicators is represented by the increase pro capita income, which let transpire increasing possibility for the industry. Currency fluctuation, especially with reference to the fuel hedging activity put in place by Ryanair, could affect the carrier strategy and bring in business risks. The migration trend within the European region, nonetheless, can bring benefits to the airline development and revenues.
As for the technological PESTLE aspect, the video conferencing system could deter business people to travel in many circumstances, but not leisure travels. It must be said that technology has been crucial for Ryanair’s success and it’s likely to be important also in the future. Internet, in particular, has allowed the organisation to avoid lot of costs. But also the aircraft new generation engines, in terms of less emissions and less fuel consumption will allow the organisation to move on through its cost reduction strategy.
The legal aspect has had and could still have negative effect on the carrier’s activity, the emission constraints set by the European Commission, its activity on implementing and monitoring antitrust law and policies, and the EU legislation on working time regulation and union recognition, sooner or later will affect Ryanair’s policies and this could seriously threaten its revenue result.
As for the environmental aspect, the more and more attention is provided to the environment in terms of both emissions and noise pollution and the presence of many non-for-profit organisations fostering and endorsing a law on the quality of air, supported by the European Union, could represent a future threat, mostly as already seen for the likely imposition of new taxes. Ryanair, anyway, has already given evidence of being sensitive to the issue and of being adopting the necessary measures to control the phenomenon.