Ryanair Environmental Factors

4. Discuss the impact of any two (2) external environmental factor that challenges Ryanair company to remain competitive in the airline industry? (20 marks)

Political or legal processes and legislation is one of the external environment that influence decision making made a firm that must comply with regulation which is how organization try to influence government and how government affects businesses. Among the challenges that face by Ryanair is increasing legislation in Europe that give negative impact to their business model and also increasing the cost of operation of their business. The increased cost of operation in Ryanair was adverse the aim of this company that wants to offer lower fares to their customer besides lower costs-

There is a risk to the productivity-based incentive system, due to Ryanair need to hire more employees. Other than that, Irish Aviation Authority (IAA) will oversee the safety aspects. That means government provided full security system to the Ryanair. However, the tightened security system could increase operating costs whereby it will incur regular activities of monitoring and maintenance. If Ryanair fails to fulfill the criteria of the security system, Ryanair may fail to get a Certificate of Airworthiness so they can 't run their business. This will give an advantage to their competitor due when Ryanair did not operate that 's means they can reduce their competitor in the airline industry. Besides, the Department of Transportation (DOT) was enacted legislation in response to European Union legislation requiring compensation and assistance to passengers in cases of delays or cancelled flights. Ryanair claims this matter is beyond the control of the airline. In addition, the European Union might increase the emission fees. Although Ryanair disagrees or dissatisfied with the rule and regulation of the European Union, there needs to

Economic segment is how the economy had affected to business in terms, interest rates, taxation, general demand, exchange rate and European and global economic factors. Besides, it also indicates how the company will analyse and make strategies to deal with economic factors. Commonly, decreased in air travel will affect to falling revenue in the airline industries. The economic downturn has reduced the purchasing power of customers with fewer people travelling by air. When there are good in economic growth, consumer’s discretionary income rises and there is often an increased demand for air travel that people like to travel and spend their leisure time with vacation and others. But, when economic downturn, demand for air travel will decrease. Therefore, these economic factors have affected Ryanair’s profits. Ryanair needs to make a new strategy or adjust their plan in order to meet the economic condition. This is because to avoid wastage during low travel periods besides taking the opportunity when there is peak-time travel. When there is economic recession, customers will re-evaluate their flying choices with fewer travelling in business class rather than economy