Pestel Analysis

Topics: European Union, Low-cost carrier, Airline Pages: 3 (809 words) Published: October 31, 2008
PESTEL Analysis
In this part all factors, which influence the company as a whole but are out of their direct control including wider social, political and economic factors shall be explained. The analysis of those factors of the macro-environment is therefore often known as PESTEL analysis.3

PESTEL is an acronym for the six key strategic areas of change: Political, Economic, Social, Technological, Ecological and Legal and a technique for understanding the various external influences on a business4. Each single area has the potential to fundamentally change the competitive environment your company operates in. Due to the fact that the airline industry is very much influenced by changes taking place in the environment and has undergone rapid and dramatic changes during the last decades, this analysis is especially important for Ryanair.5

A detailed matrix of all single points of the areas of change – Political, Economic, Social, Technological, Ecological and Legal – can be found in the appendix. Furthermore the PESTL Analysis is made within the important points of the airline industry.

Ryanair targets in the first instance, as the largest and most successful of Europe’s low fare airlines, leisure travellers and the visiting friends and relatives segment of the market. Describing itself as “lowest cost scheduled airline” means basing the airline’s financial strategy on the average number of seats sold per flight in place of on the revenue made per sold seat. As a result every environmental issue, which either affects basic costs of flights or affects the likeability of customer to book a flight is important for Ryanair.6

The past decades have brought many events, which affected flight security in the eyes of the customer. 11th of Septembers and “Sars” have shown that global dangers heavily affect the air-travel. As an European airline and following an effective promotional strategy Ryanair sales increased irrespective of this danger. However the...
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