Increases attractiveness in secondary airports 11 tax

increases attractiveness in secondary airports ($11 tax on European
departures). 0.05 2 0.10
Threats:
1. New IAA Rules on flying hours and aircraft regulations could increase
future expenses. 0.05 3 0.15
2. Unpredictable and uncontrollability of rising fuel costs; €350 million in
2012 regardless of hedging. 0.09 4 0.36
3. Ryanair plans to ground 80 aircraft in the winter months of 2012 as
opposed to 40 last year because overall traffic is expected to be lower. 0.05 2 0.10
4. Last year 14,000 Ryanair flights were cancelled due to volcanic ash
disruptions, airport snow closures and repeated ATC strikes. 0.08 2 0.16
5. The majority of Ryanair’s profits are subject to Irish Corporation Tax at a
rate of 12.5% and a raise may adversely impact Ryanair’s cash flows,
finances and operations. 0.02 2 0.04
6. Already paid 88 million in claims last year due to the EU 261 regulations
where the airline has to cover accommodations and compensation. 0.08 2 0.16
7. In the future legislation will require airlines to pay about €1.4 billion for
emissions of carbon dioxide which will rise to €7 billion by 2020. 0.05 4 0.20
8. Too much growth too fast; Expansion into Eastern Europe means
competing with already existing players in the market and operating on
even tighter margins. 0.03 3 0.09
9. Increased competition from alternative forms of travel. 0.05 2 0.10
Totals: 1 2.82
Table ?: Ryanair External Factor Evaluation (EFE)
28

They rating range from 4 to 1, where 4 means a major strength, 3 – minor strength, 2 –
minor weakness and 1 – major weakness. According to the table of Internal Factor Evaluation
(IFE) in terms of Strengths, Ryanair has a majority of rating is 4 and 3 which means a major
and minor strengths while in terms of weaknesses, Ryanair has a majority 2 and 1 which
means a minor and major weaknesses. This part is different from internal factor evaluation
(IFE) because this part it evaluate the external factor of Ryanair. The external factor including
the Opportunities and Threats, evaluate the external factor outside Ryanair Company.
If the weighted score is higher compared to the weights of the industry average means
Ryanair has good performance compare to the industry. Opportunities represent the strengths
and weaknesses opportunities of Ryanair Company. For example, based on the table one of
the strengths opportunities is
Customer base is expected to grow up to 85 million passengers.
Meanwhile, the weaknesses opportunities are Start flying into 10 to 12 primary airports (European
airports have shown interest). The strengths opportunities have contribute to high performance
compared to weaknesses
opportunities. But, it does mean the weakness opportunities do not
contribute to high performance. It just has a lower performance rating than the strengths
opportunities.
If the weighted score is lower compared to the weights of the industry average means
Ryanair has bad performance compare to the industry. Based on the table, if strengths threats
the threats not giving much impact to the viability of a project, product, place or person unlike
the weaknesses threats which is vice versa from strengths threats. For example, based on the