Navigating Challenges: A Comprehensive Analysis of Ryanair DAC and the Impact of Brexit

Introduction

Ryanair DAC is an Irish company formed in 1984. The Irish company is considered among the low-cost airlines operating in the European Union. Ryanair DAC has its headquarters in Swords in Dublin, where it has its significant operations take place in London Stansted Airport and Dublin airport. Ryanair DAC began its operations carrying passengers on short-distance trips from London to Waterford (Prichinet et al., 2020). However, as time went by, the company has improved and developed by purchasing Boeing aircraft, which carry long distances. By 2016, the company was announced as the largest firm offering European budget airlines across Europe (Dobruszkes and Wang, 2019). The company carries more international passengers throughout Europe than any other airline.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

The company has more than 300 aircraft which deal with carrying passengers and their properties across Europe. Most of the routes for Ryanair DAC airlines connect about 40 countries located in Europe, other countries in the Middle East such as Israel, Jordan and Lebanon, and Morocco, which is in North Africa. Michael O'Leary, the company's CEO, began the operations of forming long-haul transport services in 2009, which saw the separation of the company's short-haul transport from the long-haul carrier. Since the company placed the second takeover bid for Aer Lingus in 2008, the company operations improved, making it the second-largest low-cost airline worldwide. The airline targeted the major cities across Europe, offering services to different customer types (Dobruszkes et al., 2017).

Ryanair DAC is in the airline transport industry, consisting of other companies offering transport to different parts of the world (O'Connell and Williams 2005). The industry is competitive, but Ryanair DAC has gained a competitive advantage by providing economic airline services to its customers. Companies within this industry compete with the customers through different methods like price lowering.

The Internal and External Strategic Issues to Focus on

A strategic issue entails the issue that requires a solution if a business has to achieve its mission. When a company faces a strategic problem, there is an unresolved question waiting to clarify a future event. Ryanair DAC faces several issues in its internal and external environment, affecting its growth and future performance. The internal strategic problem the company is facing affects its ability to run the company operations well. One of the internal strategic issues the company is facing involves the loss of the shareholders of the company because they might become non-E.U citizens. One of the European Union policies' agreements is that members from the E.U. region can enter the U.K. with ease (Prichinet and Le Duc, 2020). There is no much documentation required when entering the U.K. compared to other foreigners from outside the E.U. Similarly, doing business within the European Community is simple when the members come from that region. Changing the citizenship means that the employers will have the same clearance foreign investors take when doing business in the U.K.

Ryanair DAC consists of shareholders from different parts of the European Community. The shareholders work together towards enhancing the success of the company and ensuring the business is running smoothly. However, since the United Kingdom pulled out of the European Union, the shareholders will lose their citizenship. Doing business within the nation will be difficult because of the charges imposed on foreign investors (Prichinet and Le Duc, 2020). For instance, the company will begin working as a foreign business in other countries because of tariffs' imposition after the U.K. left the E.U.

Losing the shareholders places the company at risk of falling in the market. Ryanair DAC faces competition from other companies, and when it loses its shareholders, this shows the company operations will fail because of lack of enough finance to support them. The shareholders may decide to sell the shares in the company and leave because of the citizenship issues. However, if this issue occurs, it will affect the company's stock price in the market. A company's stock price depends on the supply and the demand of the company stock (Morschett et al., 2015). Selling a large number of stores leads to an increase in stock supply, which affects the prices.

The U.K. is transitioning after leaving the E.U. The employers' position depends on the agreements that continue as the nations reach the deadlines at the end of 2020. The deals will determine if the free trade among the countries will continue or the governments will impose new tariffs on companies doing business in foreign nations. For instance, Ryanair DAC is an Irish company that enjoyed the United Kingdom's operations because of the European Union's agreements (Renehan and Efthymiou, 2020). The main challenge comes with the agreement between E.U. and U.K. for foreign companies operating in the U.K. to pay their tariffs after the two parties fail to meet a contract.

A financial challenge is a problem which the company faces from the execution of the Brexit. Ryanair DAC might face limited trips because of the closure of borders caused by the Brexit laws. This means that the company will have limited sales that limit the profitability within the company. The international activities are related to foreign direct investment (Morschett et al., 2015). There are institutions in the international trade that deals with controlling companies' activities and make policies that govern their movements. Therefore, this can be the case for Ryanair DAC, which faces operation restrictions since the Brexit policy occurred. The company may meet conditions that may affect its operations, thus reducing the company sales (Morschett et al., 2015).

There are also external strategic issues the company is facing in its operations. One of them is the issue of Brexit. Brexit involves the withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community (Clarke et al., 2017). The U.K. is the first nation to leave the European Union for almost 47 years since its membership in the European Union. Since the United Kingdom left the E.U., it seems like very little changed. The agreement made by U.K. and E.U. allowed for companies to sell the already processed materials without incurring the customers. Besides, the employees working in any of the two regions will continue to operate without visas (Renehan and Efthymiou, 2020).

The Republic of Ireland consists of the main headquarters for Ryanair DAC. The country would remain under the E.U. when U.K. goes its way with Northern Ireland. Therefore, this means that Ryanair DAC would operate from Ireland and control its operations from that nation or move to the U.K. and have restrictions entering other European Union states like The Republic of Ireland. Topham (2019) indicates that Ryanair decided to take its clearance to work within the U.K. and in the E.U. after realizing the Brexit effects.

However, this is because the nations reached several European community agreements to give time before the significant changes occur. The U.K. and E.U. agree on different things and how they should live, work, and conduct businesses together. When the U.K. was in the European Union, companies could run their operations in any state without paying the required tariffs because of the trade deals which exist within the European Union. If there were no trade deals within that community, it would mean that businesses will incur much expense selling products or services in another country (Clarke et al., 2017).

According to Topham, Ryanair DAC faces the risk of losing its license to operate within the European Union. The Brexit execution means that the U.K. will no longer be part of the European Union. This shows that companies operating within the United Kingdom will be required to have the nation's license. The license of operation within the European Union will cease to function within the U.K., affecting companies like Ryanair DAC, which operate using those licenses.

Since the U.K. is leaving the E.U., there are questions on the type of trade that will exist among the countries. Studies indicate that the U.K. has been reluctant to sign agreements with the European Union, which will enable the trade deals between the two parties (Strom, 2019). The failure of the U.K. to sign the trade barriers is another uncertainty which companies might face. There are several market barriers of trade that hinder companies from smooth operations. One of them includes the tariffs which a government imposes on goods entering the nation. Other market barriers like the procurement policies, quotas, and by-local campaigns affect the foreign businesses which operate in a country (Morschett et al., 2015). The market barriers are also applicable to the U.K. business region when the nation fails to make trade deals with other European Union members. Besides the company's restrictions from operating in the U.K. region after Brexit begins to work, the company also fears the deterrence of foreign investments within its area.

U.K. faces an unstable environment caused by the uncertainty which might occur because of the execution of Brexit. The tension might come with instability within the U.K.'s market, making it difficult for the companies to operate well (Walulik, 2018). The government plays different roles within the market which control the company operations. The functions might lead to the implementation of some policies, which in turn disrupt the businesses. For instance, the U.K. government has not determined the businesses' fate that operates within its region. Therefore, this becomes uncertain because the nation can implement policies that directly affect foreign companies like Ryanair DAC (Morschett et al., 2015).

One of the Brexit fears is that it may damage the U.K.'s economic growth, affecting companies and other businesses that operate within the region. Research shows that due to the uncertainty caused by the Brexit, the economic growth in the U.K. slowed in 2015 from 2.4% to 1.5% in 2018 (Amadeo, 2019). The British pound also fell because of the changes implemented. Therefore, the initial effects felt led to the prediction of an uncertainty caused by the Brexit. It is predicted that when the country imposes restrictions on immigration, this could affect its economic growth.

Questions Exciting and Relevant To Discuss

• How will Brexit's execution affect its operations within the European Union, especially companies like Ryanair DAC that operate in more than one nation?
• Taking the example of Ryanair DAC, can a company lose license of working in other nations within the European Community after Brexit takes place?
• With the current instability in the United Kingdom business environment caused by Brexit and what alternative options can British businesses like Ryanair DAC develop to meet custom made strategies?

A Well-Structured, Scientifically-Based Solution to the Questions Stated

The Brexit has several impacts on the European Union operation, especially on United Kingdom companies that operate in several countries, especially Europe. Firms in Britain will experience significant handles while offering monetary services in the European Union (Fidler, 2020). Brexit implies a change in tree trade terms in products across the European Union. The E.U. will determine the equivalence between its rules and those of Britain. The equivalence policy will lead to the fragmentation of financial markets between the European Union and Britain. The regulation implies that firms will depend on equivalence to conduct business transactions.