Ryanair Holdings was the first founder of a low-cost scheduled passenger airline in Europe. The headquarters of the company is in Dublin, Ireland. Ryanair goes to 34 countries mainly in Europe. Their business model means their profit was €1.
3bn last year. The cost is low because they only have one class in every aircraft, more seats for their customers and only travel short flights. They fly from their base in the UK. PEST is an acronym for political, economic, social and technology. This analysis is all external factors. A company cannot control what happens.
A PEST analysis helps to determine how the factors will affect the performance of the business in the long-term. The political aspect can refer to the hackers in the world. It is easy to hack into someone data.
For example, the Egyptian plane crash due to loss of signal. The other political aspect is the fuel availability in the earth. The oil is an unrenewable resource and it is hard to get when it is finished. The price of the fuel is rising and it could cost more for the Ryanair to buy the fuel for their aircraft. The tourism can also affect the Ryanair because many people want to travel to another country by smaller airlines.Brexit is the main unknown in the future of UK.
It can cause a major problem for Ryanair. This is because the Ryanair is based in Ireland. If it changes to be based in the UK, it could be easier and cheaper because they do not need to pay more. In addition, the ‘open skies’ policy can affect the Ryanair. They need to pay tax to go in the European Union (EU) because the UK is no longer in the EU. There will be no free movement of goods and services.
So, the Ryanair may raise the price of the ticket to cover the payment. Economic factors focus on the Spring statement that was issued by Philip Hammond, Chancellor of the Exchequer. This makes the economy going slower and more people are saving their money and spent less money. However, it might be a benefit for Ryanair because it is a low-cost airline. Next, the interest rate and exchange rate between other countries. For example, in January 2018 the exchange rate for British Pound to US Dollar is $1.41.
As the price is high, people may substitute to another way to travel such as high-speed trains.The social analysis generally refers to the people around. Nowadays, people in the UK are overweight or obese. This can affect the sitting area in the aircraft. The airline needs to widen the sits and reduce the sits in each aircraft. For example, if each row has four seats, they need to reduce it by two or three for the obese people to sit. This can make it lose their profit because fewer people are on board. The technological focus on the advancing of technology.
Most of the airlines are doing boarding passes, so there is no comparative advantage. In today’s invention, drones can fly in the sky. This can affect the Ryanair because it may collide with the plane and cause the plane to crash. In February 2018, there was a helicopter trying to avoid a drone and then crashed into the forest.