Ryanair airline Case Study Example | Topics and Well Written Essays - 3000 words

Ryanair airline - Case Study Example Yet it raises opportunities for the low-fare carrier segment, such as Ryanair that is a rising star in the skies of Europe, having been performing well post 9/11. The aim of this report is to analyse the overall performance of Ryanair in the fast-changing environment, and then few recommendations will be provided. Conclusions will be drawn at the end of this report. Irish-owned Ryanair, founded in 1985, began to introduce a low cost operating model in the early 1990s. The company primarily serves short-haul, point-to-point routes that target business commuters and leisure travellers by offering low, multi-tier fare pricing and sngle-classs air transportation. Having overtaken EasyJet, Ryanair is now the largest low-cost carrier in Europe In January 2000. (Doganis, 2001) The company offers approximately 475 scheduled flights per day serving 84 locations in 14 EU countries. The worldwide commercial aviation has suffered from terrorist attacks of 9/11. The tragedy dramatically decreases the number of passengers and pushed Airline industry facing deterioration in their financial positions. Similarly, impact of SARS and Iraq War reduce willingness of people to travel outside their countries. Since 1997, the Euro... For example, any airlines holding a valid Air Operators Certificate in the EU have right to operate on any route within the European Union, including flights wholly operating within another country. On May 1st 2004, ten new members joined the EU as part of EU enlargement. The era of single European sky related to Open-Sky Treaty, allowing point-to-point service between any EU countries is approaching and airline companies will benefit from consolidation; on the other hand, they will have to confront fiercer competitions against each other. (Loddenberg, 2004) The price-sensitivity for routes to and within accession countries is naturally suited to low cost airlines. The average Ryanair fare in 2003/4 was 40 and the expectation is a 38 average fare in 2004/5. The net margin fell from 28% in 2002/3 to 21% in 2003/4 and is predicted to fall to 18% in 2004/5. The net margin has thus fallen by 10 points in two years. While the margin exceeds the industry average, it may come under pressure from factors such as further falls in yields and the lack of scope for more reductions in an already low cost base. Economic factors Economic recession Overall, the world's economy is slowdown, which affects European economy as well. People are reluctant to spend money in leisure activities. Currency fluctuation In related to companies' operating costs, currency fluctuation affects those companies' revenues that are not in US dollars. Weakness in US dollars enables fuel cost reduction. Social and cultural factors Population intensity High level of population density in the EU region (six times larger than the USA) is likely to stimulate the growth of short-haul point-to-point routes within Europe, which provides major opportunities for low-cost

ASSIGNMENT ON EXTERNAL ENVIRONMENT AND ORGANISATIONAL RESPONSE Essay - 1

ASSIGNMENT ON EXTERNAL ENVIRONMENT AND ORGANISATIONAL RESPONSE - Essay Example It is against this background that this paper provides an in depth analysis of the external environment of the proposed Castle Hotel in light of the PEST model. To enhance coherence, the paper begins by justifying the entry into the hotel industry. As indicated earlier, the hotel industry in New Zealand offers a lucrative environment for sustained growth. The decision to enter into this business was informed by various factors. To begin with, the industry is all seasonal. In this regard, Hall (2000) indicates that the hotel industry deals with the most basic human needs and it is unlikely that one would miss clients at any point in the year. Preliminary researches indicate that Auckland City is a hub for tourists and business persons from across the globe. Providing a hotel with six star standards will probably give the investor a chance to explore this market niche with ease. PEST analysis reviews the political, economic, social and technological facets of the business environment. This is fundamental in enabling the investors to identify any opportunities for growth and seize them in a timely and effective manner. Furthermore, investors can use this information to minimize threats that compromise sustainable growth and development of a particular business. The political environment of any country greatly influences the performance of both local and international business. Respective governments have put in place rules and regulations that need to be adhered to by investors. If these are not supportive of economic growth, they can cripple relative development initiatives. With respect to the hotel business venture, the political environment in New Zealand offers distinct opportunities that can be effectively explored for growth and development. In his review, Elebiary (2012) indicates that the enlargement of the European Union has opened up the destination for increased international tourist arrivals. In addition, the government has huge incentives for the est ablishment and development of luxurious hotels. This according to Elebiary (2012) is due to the fact that the hotels contribute significantly to the country’s gross domestic product. However, there are political threats that are likely to affect the success of this business. Reportedly, governments charge huge taxes from these star hotels. In addition, there are stringent rules and huge penalties for hotels that fail to comply with the established health and safety rules. To address issues pertaining to huge taxes, the hotel will equally charge high prices to cater for all the operating costs. The economic facet of this analysis underscores the economic trends in the country which have direct impacts on the performance of this luxurious hotel. Being an international venture, this business will attract clientele from the international pool too (Birt, 2004). The first opportunity offered in the economic sphere pertains to the 17.1% rise of the global net worth of individuals (E lebiary, 2012). This implies that the industry is likely to receive more clients. Then, economic trends ascertain that this industry is not commonly affected by recession. Most importantly, the growing national Growth domestic product (GDP) of New Zealand and other countries in the European Union imply that more individuals will be able to afford the luxurious services that