Ryanair operates in a time of economic recession, but fortunately for Ryanair, both casual and business passengers tend to prefer low-cost airlines to full-service airlines as they search to reduce costs. One of the main concerns for Ryanair is the EU-US Open Skies agreement which opens the European market to US airlines. Higher completion would make it difficult for Ryanair to maintain its competitive advantage, especially when these airlines operate in an environment where operating costs are lower due to lower taxes and labor costs. Customers tooThe level of oil prices has a critical impact on Ryanair's business. The financial report reveals that fuel costs account for 34.1% of total operating expenses and with oil prices constantly fluctuating, Ryanair could have higher operating costs depending on the price level. Ryanair has used the fuel hedging strategy but this could be advantageous when oil prices rise above the level at which the hedge is set and could be disadvantageous when the price falls below that level. Ryanair has been forward thinking in addressing this through installing Winglets on aircraft to reduce fuel consumption. The government's decision to eliminate the Irish travel tax would represent an opportunity for Ryanair to further lower its prices making it even more competitive. The Telegraph has conducted a survey which reveals that the Ryanair Low fare could actually be higher than its competitor if all the add-ons are taken into account. It is in the company's best interest to reevaluate its marketing strategy so that this picture does not become clear to customers as it could lead to a decline in sales. Social-Although Ryanair prides itself on its customer service being the best... middle of the paper... determining factor when it comes to short haul flights. Air travel is the fastest means of transportation even when compared to high-speed trains. Even for longer distances, rail fares do not compete with the current low fares offered by airlines. Therefore the risk of substitution is low. General summary of Porter's five forces The analysis of the industry according to Porter's five forces model shows that it is an attractive industry and that Ryanair's position within the industry is strong. Barriers to entry are high, substitution risk is low, and supplier bargaining power is relatively low, given the opportunity for airlines to make a profit. Although the bargaining power of customers is high and the rivalry of existing competitors is high, Ryanair has a competitive advantage due to its low operating costs and the size of the market it controls.