Analyzinr Ryanair

Résumé du document

Ryanair is an Irish flying company which was founded in 1985 by the Ryan family. The initial capital invested constituted to just £1. The business vision and mission of this flying company is to offer affordable flights across Europe. It has grown from a small family company to a big quoted company with over 40 million passengers a year. Ryanair is owned by different investing companies, so despite the family company background it is not family-owned. As the flying business is presently going through a turbulent phase, our interest lies in the future of Ryanair and how the company wishes to weather the economic tsunami. The fuel prices are constantly on the rise and the markets are intense with competition at its brim. If weathering this much of inconsistency in the airline industry is unfathomable, there are many more such challenges to be encountered. It is observed that security issues are also preparing the flying business to face more trying situations. Studying the airline business in depth especially one of the leading airline companies across Europe (Ryanair) is an interesting and engrossing area. Therefore, analyzing Ryanair's strengths and its opportunities to nullify the effect of its weaknesses and threats is what our study will focus on. As a well known fact, if Ryanair's ordinary shares are primarily quoted on the Irish Stock Exchange Limited, how would it grapple with the bearish market?

Extraits

[...] Where possible, we incentivise your work so the more you do the more you get paid. We aim to offer competitive salaries with excellent benefits that are simple and easy to understand. We offer an excellent share option scheme, which ultimately allows you to own a piece of the airline and share in its success.” Although Ryanair tries to attract employees with the figures like the highest average pay of all airlines in Europe the company is often criticized by trade unions for the poor working conditions. [...]

[...] But Ryanair is also a very controversial company. It was the target of several issues concerning the treatment of employees, handicapped persons and was also accused of blackmailing airport companies which were unwilling to cooperate. But the company never made a big secret out of these matters and tells on its homepage barefaced that it will continue to do everything to keep it fares as low as possible. The key figures and forecasts seem to proof that the business concept of Ryanair is working and the company is the biggest on the LCC market with the highest profit by far. [...]

[...] Only operating margin has decreased. One reason to this is the growing fuel costs. Increasing operating costs make the business less profitable and the company has to increase its revenue even more to get the profit out of it. For more information see the income statement in the appendix 7 page Finance and balance sheet Aircraft The fleet is the biggest asset airline companies have. Some companies choose to use leasing and keep the aircraft out of the balance sheet, and some companies choose to own the airplanes. [...]

[...] The people are likely to spend more on non-business traveling. That means the potential market are quite enormous since according to the customer survey conducted by Ryanair, the main purpose of of the journeys are for leisure and are for visiting friends and family. Also, the state of the economy as a whole and the increasing convergence within EU will definitely boost the low-cost flying industry http://www.fluglaerm.de/hahn/oeffent/neues/nd080804.html Source: AEA, Economist, Merill Lynch; http://en.wikipedia.org/wiki/List_of_countries_by_population Analysis of Ryanair Ryanair's position in today's market As a pioneer of low-cost European airlines since its establishment, Ryanair has always kept its image with aggressive marketing and prices. [...]

[...] The big fuel costs really lower profitability. To measure the effect of the Fuel costs % of revenue fuel cost rise we made a simple calculation: If the fuel costs would have been on the same level as in the previous year, Ryanair would have made a profit of EUR 431 million instead of the profit of EUR 307 million Ryanair's principle is to guarantee Year fuel surcharges ever‖ unlike all its competitors. This makes it the cheapest airline company and it attracts more customers but being profitable and to generate profit to shareholders is even more difficult with this principle. [...]