Evaluate Ryanair's strengths and weaknesses.

Weaknesses

In an inverse way, Ryanair’s weaknesses can be listed and assessed to see whether any of them create critical vulnerabilities that impair Ryanair’s positioning and viability.

• Cost structure – aircraft utilisation in question with lowest number of hours per day of any budget competitors; older aircraft entail higher fuel and maintenance costs; currency fluctuations make fuel costs unpredictable.
• Overly cost conscious? Could be irritating to passengers, e.g. withdrawing free ice with paid for drinks – especially when budget rivals are actually adding perks, and mainstream airlines are discounting.
• Capital structure – very vulnerable to financial markets sentiment and high expectations, so any profit disappointment could be disastrous for share price, which is especially important in absence of dividends. Also, majority free floating shares could result in over 50% ownership outside EU →loss of airline licence.
• Staff issues – EU legislation regarding compulsory trade unions, alongside history of industrial relations problems; question marks over staff commitment and loyalty.
• Outsourced services outside Ireland may mitigate against employee commitment and intense company knowledge necessary to create superior customer service.
• Ryanair penalized more than other airlines by loss of intra-EU duty-free because cabin staff remuneration dependent on it; Ryanair had to compensate staff.
• Leadership – public resentment at high financial compensation awarded to themselves by Michael O’Leary and the Ryans.
• Reputation – Ryanair enjoys a mixed reputation among the public in its home base, Ireland. If it should be found wanting in any respect, its many opponents (trade unions, competitors, Aer Rianta, some politicians and journalists) would gladly use this to undermine the company. Trade unions protested when Tony Blair, Labour Party Prime Minister of UK and his family used Ryanair to travel on their holidays to France in the summer of 2001.