Module code Business Environment Module leader: Matthew Obonyilo

and title:

Assignment No. Case study report (2000 words) Assessment 50%

and type: weighting:

Submission On or before: 2pm March 3rd, Target feedback 3 weeks from the date of final
time and date: 2023 time and date: submission

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 Table of Contents
Introduction......................................................................................................................................3

Section 1: Summary of Ryanair.......................................................................................................4

Business overview........................................................................................................................4

Size of the business......................................................................................................................4

Sector and industry operation......................................................................................................4

Direct and indirect competition....................................................................................................5

Organisational structure and leadership team..............................................................................5

Section 2: Impact of changes in the internal environment..............................................................6

Impact of Brexit and COVID-19 on Ryanair's internal environment..........................................6

Impact of UK government's recovery plan on Ryanair's internal environment...........................6

Section 3: Impact of changes in the microenvironment..................................................................7

Impact of UK government's recovery plan on Ryanair's microenvironment...............................7

Impact of Brexit and COVID-19 on Ryanair's microenvironment..............................................7

Section 4: Analysis of Ryanair's macro environment......................................................................9

PESTLE analysis..........................................................................................................................9

Conclusion.....................................................................................................................................11

References......................................................................................................................................12

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Introduction

The aim of the study is to examine the context in which Ryanair does business in the United
Kingdom and elsewhere by reviewing relevant resources such as the case study, the UK
Government's Tourist Recovery Plan, Ryanair's Annual Reports, and any other relevant
documents. The term "internal business environment" refers to the conditions inside a company
that have an impact on its day-to-day operations, as well as its level of performance and the
choices it makes. This comprises the company's culture, structure, resources, personnel, and
management methods, as well as its strengths, weaknesses, opportunities, and threats. Also
included in this category are the company's opportunities and dangers. The term "micro business
environment" refers to the particular elements that have an immediate and direct influence on the
operations of a firm within its sector. This encompasses the company's rivals, customers,
suppliers, and partners, in addition to the market tendencies, regulations, and economic situations
that have an impact on the company's performance and profitability. The term "macro business
environment" refers to the larger economic, social, political, and technical variables that
influence the operations of a firm as well as its performance. This comprises elements like as
regulations enacted by the government, economic circumstances, demographic trends, and
technical breakthroughs that have an effect on the market and industry in which the firm works.

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Section 1: Summary of Ryanair

Business overview

Ryanair is one of the UK's low cost airline companies that run their operation from the
headquarters of Ireland. The company started its journey from 1985 with a capacity of flying
daily flights on fifteen seater turboprop aeroplanes. This is a public-quoted firm that has its share
trades on London, New York and Dublin stock exchanges (Morlotti et al. 2020). The company
runs the largest airline service in Europe and the UK. They run the business with a "low-cost
leadership model". With its ability of offering low fares to passengers makes this airline
company one of the toughest competitors for any new entrants in this industry.

Size of the business

Ryanair's annual revenue for the twelve months ending December is $6.478 billion, which shows
a 48% increase each year. In the last year, the company's annual revenue was $5.581 billion
(Worthington et al. 2018). This figure represents nearly a 192% increase compared to the 2021.
According to the annual report of Ryanair, total assets of the airline company are worth €12.32
billion and total equity is €4.647 billion. Nearly 19,000 employees work in this company
according to the data. The company makes money from low-cost ticket sales and charges for
additional services (Rodríguez-García et al. 2020).

Sector and industry operation

The company belongs to the airline sector. The operational strategy of this company is to
establish a business by offering low-cost flight tickets to its customers. Their operation focuses
on maintaining a low cost while increasing customer traffic. Ryanair is seen to provide
maximum focus on containment and operational efficiency. The "unique selling point" of
Ryanair's operational strategy is their low-cost flight tickets (Brinkman et al. 2014). Most of the
customers buy tickets from this airline due to this USP.

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Direct and indirect competition

The company uses a focus strategy to expand their business. Their idea is to "cost focus strategy"
to gain a thorough market grip (Ahmed et al. 2019). Some of the competitors of this company
are Finnair, easyJet, Flybe, Lufthansa and much more.

Organisational structure and leadership team

The board of Ryanair consists of one executive and ten non-executive directors. A large majority
of the board's members are "non-executives". The chairman is a "non-executive" and each board
member is regarded as independent. The organisation uses an "autocratic leadership strategy" to
oversee a huge workforce of workers for this company (McMahon, 2021). The CEO makes all
business decisions on his own. The board of directors guides the CEO in making appropriate
decisions.

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Section 2: Impact of changes in the internal environment

Impact of Brexit and COVID-19 on Ryanair's internal environment

The UK's stockholders continue to possess the common shares they previously owned as of
January 1, 2021, in the post-Brexit era (Nowak, 2019). However, these ordinary shares have lost
their voting rights under the "Article 41" of "Ryanair's Articles of Association". To avoid any
misunderstanding, the company's announcement from 5th of February 2002 that "non-EU
nationals" were not permitted to purchase ordinary shares of "Ryanair Holdings PLC" still
stands. UK nationals will therefore not be able to purchase "ordinary shares" in the Business
starting on Hard Brexit Day. As a result of Brexit, regulations controlling airline control have
undergone major change. Future airlines in the UK and Europe must be successfully managed
and controlled by residents of those respective nations. They should also have a licence and be
incorporated in their own nation (Hoffman, & Georg, 2018). Exempt are airlines flying out of the
UK.
Due to the implementation of travel restrictions and the reduction in travel confidence, the
COVID-19 pandemic has a substantial impact on the airline business. Since the future of the
industry is unpredictable, environmental scan enables knowledge development and fills in
research gaps (Christoffer, 2019). The pandemic has transformed the economic and competitive
landscape of Europe. This has restricted the airline industry from executing their business goals.
Several cases of cancellation and refund demands have reduced their revenue. Customers are
scared of stepping outside their homes, which has reduced their intention of buying flight tickets.

Impact of UK government's recovery plan on Ryanair's internal environment

By the end of this year, the government wants to see the UK's world-class tourist industry sector
fully recover and return to its pre-COVID state. Aviation is one of the topmost industries that are
related to tourism (Harvey and Turnbull, 2020). Ryanair's internal atmosphere may be affected
positively or negatively by the UK government's recovery strategy. In 2019, Ryanair carried
more over 35 million passengers, making it the biggest airline in the United Kingdom according
to the Civil Aviation Authority. Internally, Ryanair may gain from rising demand for air travel
because of the positive impact on the company's sales and earnings. The “UK government's

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COVID Corporate Financing Facility (CCFF)” has helped Ryanair by providing emergency
funding throughout the epidemic. The CCFF contributed €400 million to Ryanair in March of
2021. The International Air Transport Association predicts that beginning in 2021, the airline
sector in the United Kingdom will begin to recover, with passenger demand rising to 2019 levels
by the end of the decade (Slocum et al. 2020). The industry's potential for growth means that
Ryanair might face more competition in the future.

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Section 3: Impact of changes in the microenvironment

Impact of UK government's recovery plan on Ryanair's microenvironment

The business acknowledged that the UK government had offered numerous forms of assistance
to the airline sector during the pandemic. The objective is to provide enterprises with a
wholesome timeframe for conducting business (Richard Brunet-Thornton and Felipe Martinez
2018). The corporation planned to reduce fares to increase demand, and it wanted to see up to
roughly 70% of the usual passenger traffic. Ryanair was the subject of "criminal proceedings" by
the "Civil Aviation Authority" because it transported German and Italian tourists to the UK. The
corporation acknowledged that the government was supporting its employees through the
furlough programme, but it also stated that the airline was unable to afford to supplement pilot
and attendant wages to regular levels. Ryanair, meanwhile, has also slammed the government's
"recovery plan" by claiming that ministers had been appalling in their provision of other
assistance (Theguardian.com, 2021).
The company is thankful to the government's "global travel taskforce" that held several meetings
to prepare possible overseas leisure trips. The taskforce has been supported by the aviation
minister, who claimed that while the government sought to reach certainty as quickly as possible,
it was impossible to advise people or families what they should do for the summer. There is a
threat assessment component since people must offer themselves alternatives and are conscious
of the consequences of booking conditions and coverage (Mrňa and Badánik, 2021). It is
essential for the aviation sector to accept these government recovery measures.

Impact of Brexit and COVID-19 on Ryanair's microenvironment

Ryanair's flight schedule had to be 99% reduced due to travel restrictions in Europe, which had a
huge negative impact on both "cash burn" and "financial loss" (Sheng et al. 2020).  In
comparison to 13.5 million passengers in April 2019, Ryanair only carried 0.04 million
passengers in April, causing a lower capacity factor. The announcement of positive FY20 results
gave stakeholders motivation. Despite the fact that Ryanair was required to reimburse passengers
whose flights were cancelled. The analysis found that the majority of visitors still desired a
refund (Geary, 2022). Ryanair currently has a poor reputation among both its staff and

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consumers, which harms its future opportunities. In addition to numerous prior financial losses,
"fuel hedging methods" have harmed Ryanair million dollars of revenue as the crude oil price
entered history's first-ever negative territory.
According to the CEO of Ryanair, the period of "ultra-low fares" is over, and Brexit is partly
responsible for the chaos brought on by a staffing shortage at airports during the busiest traveling
season. Even though individuals would still travel overseas, they are likely to be more "price
sensitive" and shop around before they fly because rising food and utility prices would make it
harder for them to save money. Ryanair has urged politicians in the UK and the EU to bring
deflation back down to approximately 2%, arguing that doing will sometimes severely harm
people's income and assets (Theguardian.com, 2022).

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Section 4: Analysis of Ryanair's macro environment

PESTLE analysis

This portion is going to discuss about six factors that are responsible for restricting the general
business flow of Ryanair. A detailed macro environmental analysis of Ryanair is attached below,
Political factors
The company runs their operation with a wide scope and diversity. The aviation giant follows
international treaties such as "Vienna protocol", "the Hague convention" and "Warsaw
convention" (Efthymiou et al. 2021). In 2021, Ryanair was involved in legal disputes with the
UK government over the travel restrictions imposed due to the COVID-19 pandemic. In 2019,
Ryanair faced criticism from the French government over labor laws and was fined €8 million.
Economic factors
Travel restrictions started to be increasing during this period, which has pushed this company to
face a huge issue (Mendonça, 2020). The airline industry is highly sensitive to economic
conditions. Economic downturns can lead to decreased demand for air travel. Ryanair's revenue
in 2021 was €1.6 billion, down from €2.3 billion in 2020 due to the impact of the COVID-19
pandemic on travel demand. In 2019, Ryanair's profit after tax was €1.02 billion, up from €0.84
billion in 2018 (“World Bank 2020”).
Socio-cultural factors
The company targets mostly the customers from the UK to maintain a decent profit. Consumer
preferences and attitudes toward air travel can impact Ryanair's operations. In 2019, Ryanair
carried 152.4 million passengers, up from 139.2 million in 2018. In 2019, Ryanair faced
criticism from customers over its treatment of staff and its policies regarding seating assignments
and baggage fees (Kulina, 2021).
Technological factors
The airline is preparing for the post-pandemic market because there will probably be more
demand for in-flight amenities. By November 2020, they hope to complete a $17 billion deal to
purchase "Boeing 737 MAX jets". Ryanair has several plans of launching their operation with
expanded technological upgradation within their service offerings.

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Legal factors
The Irish government's policy to impose travel bans has been contested by Ryanair (Milligan,
2021). In 2019, Ryanair faced criticism and legal challenges related to its treatment of staff and
its employment practices. In 2020, Ryanair was fined €1.2 million by Italian antitrust authorities
for unfair commercial practices.
Environmental factors
The airline has additionally faced criticism in the past for promoting claims that they are
Europe's greenest and lowest-carbon carrier. Ryanair replied by announcing that it would put its
"Carbon Offset Program" into action to cut carbon emissions. As part of this scheme, the airline
will impose a €2 carbon offsetting cost on passengers who wish to reduce the carbon footprint of
their trips (Carinci and Henke, 2019). In 2019, Ryanair announced plans to reduce its carbon
emissions by 10% by 2030 and to eliminate all carbon emissions by 2050.

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Conclusion

On the micro level, Ryanair should focus on enhancing its customer service and experience by
improving its seating arrangements, baggage fees, and other policies. Additionally, the company
could expand its routes and destinations to increase its market share and reach new customer
segments. Internally, Ryanair could invest in employee training and development to improve job
satisfaction and reduce turnover rates. This could lead to a more motivated and productive
workforce, which in turn could improve the overall quality of the airline's services. On a macro
level, Ryanair should focus on implementing a more sustainable business model to address
growing environmental concerns and consumer demands. This could include investing in more
fuel-efficient planes and reducing the airline's carbon footprint. Additionally, the company
should stay up-to-date with technological advancements in the industry to stay competitive and
meet the changing needs of its customers. Ryanair can benefit from the UK government's
tourism recovery plan by collaborating with the government to promote domestic tourism and
attract more international visitors. The airline could offer special deals and promotions to
encourage travel within the UK and support the recovery of the tourism industry. Additionally,
Ryanair could work with the government to promote sustainable tourism practices and reduce the
environmental impact of travel. This would help to align the airline with the government's goals
and enhance its reputation as a socially responsible company.

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