SWOT analysis of Ryanair
This is a detailed SWOT analysis of Ryanair. It aims to analyse the strengths and the weaknesses of Ryanair. It also aims to explore the opportunities and the threats facing the airline. Ryanair is a low-cost airline, headquartered in Dublin, Ireland. It was founded in 1984 by the Ryan family.
Strengths of Ryanair
Ryanair carries over 130 million passengers a year on more than 2000 daily flights. As of December 2018, it flies to 215 destinations in 37 countries. In 2017, it became the first European airline to have carried over 1 billion customers (Ryanair, 2018).
Ryanair is the pioneer in the low-cost airline business model and has accumulated a great amount of expertise in the industry over the years. Being cost leader in Europe enables it to enjoy a significant cost advantage over all other EU airlines. Indeed, it ranked 11th Best Low-Cost Airline in the world in 2018 voted for by travellers. It also ranked 4th Best Low-Cost Airline in Europe in 2018 (Skytrax, 2018).
The size and the average age of Ryanair fleet are also impressive. Ryanair is the largest European airline by the number of passengers carried. It only uses Boeing 737-800 aircraft and the average age of its planes is 5.5 years. As of December 2018, it has over 300 aircraft in operation and aims to increase the size of the fleet to 585 by 2024. With such massive and streamlined fleet in action and more to be added soon in the portfolio, Ryanair is and will be able to lower its fares further and carry more passengers. In fact, it aims to carry 200 million passengers per annum by 2014 (Ryanair, 2018).
Ryanair reported a 10% increase in profits in May 2018. The profit after tax for the year ended on 31 March 2017 was €1.31 billion, while €1.45 billion for the year ended on 31 March 2018. The airline also reported a 9% traffic growth and a 3% decline in average fare for the period between 31st March 2017 and 31st March 2018 (Ryanair, 2018).
Weaknesses of Ryanair
Ryanair’s weakness in managing employee relations was evidenced in the summer 2018 when walkouts by pilots and cabin crew over pay and work conditions forced it to cancel flights to some of the major holiday destinations. The airline should indeed take necessary steps to avert the return of similar disruptions in the future.
Ryanair has positioned itself as a low fare and safe airline. However, customer perception of the brand has been a problem for the airline. For instance, Ryanair’s Buzz score (YouGov) has declined from -13 to -35 recently (Shakespeare, 2017). Though the decline has been mostly attributed to strikes and flight cancellations, it is also true that the airline has performed poorly in a range of polls and surveys for many years.
Opportunities for Ryanair
Ryanair has a very strong presence in countries such as the UK, Germany, Italy, and Spain. Undoubtedly, these markets present further growth opportunities for the airline. Likewise, introducing new routes is also worth exploring. In fact, Ryanair announced over 200 new routes in the summer 2018. These new routes include but not limited to markets in Jordan, Turkey, and Ukraine. In addition to introducing new routes, Ryanair can also explore opportunities to diversify into other complementary segments of the aviation industry in Europe and beyond.
Threats to Ryanair
Threat is the last element to address in the SWOT analysis of Ryanair. There is no doubt that Ryanair faces a number of fierce competitors. EasyJet, Norwegian, Eurowings, Jet2.com, Vueling Airlines, and WOW Air are some of the major competitors of Ryanair in the low-cost airline markets in Europe.
Ryanair faces legal challenges as well. For instance, the UK’s Civil Aviation Authority is taking legal action against the airline over its refusal to compensate thousands of UK customers affected by flight disruption over the summer in 2018 (BBC, 2018). While such legal actions may not cause a financial havoc for the airline, it may damage its corporate image in the market.
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Last update: 30 December 2018
BBC (2018) Ryanair compensation claims to go to court, available at: https://www.bbc.co.uk/news/business-46451702 (Accessed 30 December 2018)
Kellew, J. (2018) Ryanair faces legal action over refusal to compensate cancelled flights, available at: https://www.theguardian.com/business/2018/dec/05/ryanair-faces-legal-action-over-refusal-to-refund-cancelled-flights (Accessed 28 December 2018)
Ryanair (2018) Ryanair full year profits rise 10% to €1.45BN, available at https://investor.ryanair.com/wp-content/uploads/2018/05/Ryanair-FY2018-Results.pdf (Accessed 30 December 2018)
Skytrax (2018) World’s Best Low-Cost Airlines 2018 https://www.worldairlineawards.com/worlds-best-low-cost-airlines-2018/ (Accessed 29 December 2018)
Photo credit: Pixabay
Author: Jo David
Jo David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.