1.

Introduction
Industry: Aviation, Budget Airline
1st budget Airline in Europe inspired by the U.S Budget
Airline, Southwest Airlines
Leadership: Michael OLeary (CEO)
Company Vision: To firmly establish itself as Europe's
low fare, schedule passenger airline through continued
improvements and expanded offerings of its low fare
service
Company Mission: To become Europe's most profitable
low cost airline by rolling-out proven low fare, no-frills
service in all markets in which we operate to the benefit
of passengers, people and stake-holders
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2. External Environment Analysis

PESTEL
POLITIC
AL

ECONOM
IC

Explanation

Supporting Case Evidence

Increase flow of
migration which leads
to increase
passengers

European Union expansion

Tighten security

Security systems regularly

monitored & maintained

Increased operation
cost affection growth
& profitability

Rise in fuel prices

Reduction in
distribution costs from
customers adapting to
online check-ins

Depreciation of US dollars

2. External Environment Analysis

PESTEL

SOCIAL

TECHNOLOGI
CAL

Explanation

Supporting Case Evidence

More people travel

from region to-region
for work, leisure

European Union expansion

Increased operating
market, segmentation
and productivity

European Union expansion

People can fly

frequently

Low fares strategy

Enhancing revenue
through ancillary
services

Availability of satellite
Television & Internet services
on flights

Change market focus

from third-party
agents to on-line
bookings

Technology expansion

2. External Environment Analysis

PESTEL
Explanation
ENVIRONMEN
TAL

LEGAL

Supporting Case Evidence

Noise level controls,

Social responsibility policies &
global
environmental protection
warming, green house
laws
gas effects

New rules to cover

overbooking that
result in boarding
denials to passengers
by
airlines

European Union regulation

EU decision at the Central

Company's image and
London Country Court, a
reputation
disabled man won a landmark
case
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2. External Environment Analysis

Conclusion on PESTEL
The most significant PESTEL factor would be
Technology.
Whilst fast changing technology seems like a threat, it
would be an opportunity for companies who have the
agility to innovate fast
Overall, the PESTEL is favourable due to the
opportunities in new technology and positive economic
climate
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3. SWOT
Strengths
- Low cost operation
- New and maintained aircrafts (low
turnaround time)
- Good financial health

Opportunities
- Low airfares enable customers to
switch to budget carriers during
recession period
- Online services increase sales
while reducing unit cost and
provide convenience to
passengers
- Selling ancillary products during
the flight that has high margins

Weaknesses
- Poor customer service
- Negative reputation and
controversial advertising and
publicity
- Too dependent on internet website

Threats
- Increase of government tax and
airport charges
- Increase in fuel charges
- Global recession
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