Rayn Air Strategy Analyses

Table 1 2 3 3.1 3.2 3.3 3.4 3.5 4 4.1 4.2 4.3 4.4 5 5.1 5.2 6 6.1 6.2 6.3 6.4 7 1. of Abstract: Introduction: Environmental Social Legal Economical Political Technological five and Threats to EasyJet: European SWOT Strengths Weaknesses Threats Opportunities Conclusion: railways: analysis: Power: of entry: Rivalry: Analysis: Contents 3 4 5 5 6 6 7 7 8 8 8 9 9 9 9 10 11 11 11 12 13 13 Abstract:



Porter's Buyer Supplier Power Barriers Industry Competitor

forces: Substitutes:

The purpose of the report is to critically analyze Ryanair strategy of lowering ticket prices in the era marked with global credit crisis and recession and strategy of massive future expansion. The analysis part of the report starts with the analysis of the external environment by using SLEPT model and the analysis of the airline industry by using Porter’s five forces model. In order to distinguish principal competitors, Competitors analysis has been utilized. All information gather in aforementioned models is been used to assemble the SWOT analysis. To conclude this report, we have presented our views about Ryanair strategy of lower ticket prices and future expansion. The SLEPT analysis revealed that recent credit crisis and the recession in the European countries has brought social change towards using cheaper alternative. The Porters Five Forces model showed a clear picture of Ryanair having the bargaining power over suppliers and presence of two major rivals in the commuting industry. Moreover, this model showed that due to the lack of liquidity in the credit market and lack of margins in the Low-cost airline industry makes it difficult for the new companies to be profitable. The competitor analysis helped us to recognize the strategically and financial situation of the principal rivals namely easyJet and European railway services. The similarity in the business models of EasyJet and Ryanair makes it easy for both airlines to adapt to each others strategy but intimidation of future European high speed train network is a threat to both. The SWOT analysis illustrated some strengths of Ryanair that are young aircraft fleet with efficient fuel

consumption ratio, impressive cash reserves and an ability to offer lowest ticket price in Europe. The opportunities are the recent social trends toward cheaper alternatives, forecasts of lower oil prices and discount on future aircraft deals. Taking these factors into consideration, we believe that the strategy of lowering ticket prices may assist in attracting more customers in the short run. A wise use of available resources in the expansion process and constant screening of competitors’ strategies will result in higher market share in the long run 2. Introduction: Aim: The aim of this report is to evaluate Ryanair’s strategy of lowering fares and massive expansion in the times when Europe in facing a global credit crisis and recession. Rationale: This report • will consider and analyze the following factor: the external environment of the Ryanair by using SLEPT analysis • the industry forces by using Porter’s five force model. • the Ryanair fare and expansion strategy

Methodology: For the purpose of achieving the above goal, the report will make use of relevant academic material, industry reports and reviews of the recent developments. The report will not accommodate for any primary research on the topic. Background: The recent global credit crisis and recession in the main European economies are affecting the behavior of public and business towards cost reduction and efficiency (Wilder, R. 2008). In order to capitalize on this trend and further strengthen its market share, Ryanair has launched a strategy of lowering ticket prices in the short run and expansion plan in the long run. In anticipation of the success of these plans, Ryanair has forecasted to carry 90 million passengers a year by 2012 (Mulligan, J. 2008). The market environment Definition: A low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services (Wikipedia). Growth and market share: The European airline industry achieved its finest financial results in the year 2007. The high fuel price and the global credit crisis are expected to have an adverse effect on the industry’s growth in 2008 (AEA. 2008). Albeit the overall growth in the European airline industry is expected to fall short of its targets, the low-cost airlines such as Ryanair and easyJet have shown improvement in their performance in August, 2008. The amount of seat sold per flight (load factor) in August was 90%, a 15% increase compared to the same period in the previous year for easyJet. Correspondingly, Ryanair’s load factor was 91%, a 19% increase compare to the same period in the previous year. Consequently, Ryanair and easyJet experienced the growth in the passenger numbers in the same month with 5.9 million and 4.6 million respectively (Milmo, D. 2008a). With 55.12 million annual (from August 2007 till August 2008) passengers, Ryanair is the market leader in the European Low-cost airline industry (Ryanair news, 2008) 3. External Environmental analysis

So.EU nationals regarding limited shares and interest rate on shares while there is up and down on EU Regulation policy. Ryanair. Environmental Regulations are subject to change. In order to acquire more customers. Europe's . body corporate or other entitles as well put interest on referred share for Non-EU nationals. 2.com). immigrants. Consumer attitudes and Social Opinions Besides of the economic slowdown. if consequences appeared due to rules and regulation. Economic Economical Trends G20 meeting is going to held in Washington to overcome the recent global crisis due to negative report of higher unemployment comment by UK and Germany (Euractiv news. 2008). a huge number of people are moving towards cheaper alternatives rather than expensive. The growing number of consumers shows the positive impact on Consumer attitudes. Environmental Legal Regulations In order to meet with the EU regulations and to avoid disputes. It could affect the growing number of multinational companies. Law Changes factors EU Regulation 2407/92 requires that. The group carried almost 5. while it filled 90% of available seats. an increase of 19% on a year earlier. As director has to set up all ordinary shares for Non-EU nationals according to time. limitation on Shares for foreign nationals and giving more priority to EU Share holders can affect the European Market.2008). Ryanair should have to create flexible environment for Non. Ryanair has pledged to cut down prices up to 20 % by this winter (Robertson David. taking the total for 12 months to August to 55 million( Victoria Thomoson. In order to analyze macro environmental factors the SLEPT model (Johnson el. its Ryanair responsibility to follow the regulations made by the government.8 million passengers in August.Germany.com). 2007). foreign investors and others who are engaged in share holder business. EU Regulation 2407/92 does not specify what level of share ownership will confer effective control on a holder or holders of shares (share capital.The macro environmental analysis of Ryanair helps organization to identify the main factors affecting the operation of Ryanair. 1. 2006) is used. 3. 2008). due to the effects of the credit crunch. shares amount decreases below 40% for the Non-EU nationals (Share capital. in order to obtain and retain an operating license. Passenger's numbers are increasing rapidly every month of this year. Moreover. Ryanair has spent in excess of $10 billion over the last five years in acquiring a fleet of brand new Boeing aircraft. Ryanair keeps a separate record of the individuals. an EU air carrier must be majority owned and effectively controlled by EU nationals. there is a huge increment of passengers. Rynair. which have reduced the fuel consumption by 45% and noise and CO2 emissions by 50 per cent per seat (cheapflights.

2008). The forecast for oil prices by the .2008) and primary motive for those sales is to cover demand rather than driving rivals out of business. 2008). barriers to entry.2008) and favorable deals with the aircraft producers (Noonan. Ryanair had fuel hedges for the first three quarters of year 2008 and negotiated 25% of fuel hedges for the 1st and 2nd quarter of year 2009 at a price of $75 a barrel of oil (Mulligan..g. because Eurostat Data published on 14th Nov. 2008).2008). this is a good opportunity for Ryanair while deducting air fare (Milmo D. The recent travel tax increase in the Irish budget means Ryanair has to pay a £10 tax on average £40 fare. threat of substitutes and finally the degree of industry rivalry on Ryanair. Taxation Issues. Ryanair has able to achieved fuel saving as well as passengers in commercial view by calculating maximum passenger number per flight in order to use fuel and Co2 emissions over the number of passenger (Ryanair . extending a 0. L. Supplier Power: For Ryanair it is essential to have low fuel prices (Liang. Knowing the fact that the flood of recession in Europe split over UK and Germany. Ryanair has paid the price for not hedging the fuel prices (Done K. we will analyze the affect of different elements e. In previous years. unemployment figures have hit their highest level. Including the latest aircraft and engine technology and efficient seat configuration and high load factors. 08 clearly states that 15 countries under EuroZone are also in Technical Recession (Euractiv.000 jobless in the last quarter. 2008). This increase puts an extra burden on Ryanair and on passengers (Ryanair. Porter's five forces: In this section. In order to have a certainty in the fuel costs. I. It clearly states that recession in Europe is in remote situation and has not totally influence the European economy. bringing the total to 1.825 million (Euractiv news. there is a forecast of more airline bankruptcies due to the recent credit crisis and recession in the major European economies. 2008).4% drop in the previous one as the German statistical office reported on 13th Nov (Euractive news. This technical process of combining scientific and commercial view to consume fuel will help Ryanair extensively in promoting business in different countries. 2008). suppliers' and buyers' power. The introduction of "airport development fee" at Black Pool airport from 5th January 2009 will result in the closure of Ryanair's service at this airport (Sky News. 2008). 4. 2008). Technological Fuel consumption Ryanair has minimized fuel consumption by reducing fuel burn and Co2 emissions per passenger kilometer flown. (Traveldaily news. has now officially meet the recession as GDP fell by 0. 4. 5.5% in the last quarter. since 1997. The pace of the recent downturn will also drag other Europe's economy. J. 1.largest economy. In United Kingdom. 2008). Political Political Trends In the year 2009. as the UK statistical office reported an increase of 140.

Additionally. 2008). 5. due to the recent credit crisis. the competition among Europe's two biggest airlines i. Industry Rivalry: European Airline industry is facing challenges in the form of recent high oil prices and global financial crisis. The lack of credit in a situation of future credit need when hedging fuel costs may result in a lost opportunity. S. 2008). 2008b). Negotiation between Ryanair. S. These tow budget airline giant were competing over lower ticket prices (Hawkes. Ryanair is continuously making it difficult for a new entrant to be profitable. In these testing times. 3. P. forcing airlines to be more transparent (BTN Online. the recent credit crunch. 2008) proved fatal to the numerous airlines such as "Sterling". Buyer Power and Threats of Substitutes: The EU regulations. 2008). Adding to the misery. Boeing and Airbus are in progress that may result in the delivery of 400 new aircrafts to Ryanair from 2012 (Arnott. S. M. Previously. there is illiquidity in the hedging market and the bankruptcy of Lehman Brothers resulted in the collapse of many hedging deal (Bowker. Ryanair has negotiated a discounted deal with Boeing. The 80% load ratio. However. low demand and rocketing oil prices (Smulian. 2. Analysis: EasyJet: . Barriers to entry: By perusing a belligerent pricing strategy in order to increase its market share (Milmo. consumer protection laws and the availability of substitute in the airline industry give consumers a buying power over Ryanair.e. 2008b). D. Ryanair and easyJet is amplifying. Sensing the gains. The reason for this discount was the decrease in air travels after the 9/11 terrorists attacks in New York (Hoskins. D. P. Moreover. Low oil price presents an opportunity for a budget airline like Ryanair to negotiate fuel hedge at lower prices. the demand for air travel is decreasing due to recent global economic crisis. 2008a). J. Competitor 1. 2008) but recent Ryanair's announcement to compete head to head with easyJet for the two holiday destination will result in some drastic measures by easyJet (Woodman. 2008). these airlines are not only competing with each but also with the railway services in Europe.International Energy Agency (IEA) is low in year 2009 due to the global economic slowdown and reduction in oil demand (Arnott. The hostility of the airline industry environment may keep the investors from investing in an airline. to protect consumers against the unfair pricing strategies of several European based airlines including Ryanair. 4. Aforementioned global economic slowdown and the recent credit crunch are carrying the same effects as the 9/11 terrorists attacks that may force Aircraft manufacturers to sell their product on discount price thus giving Ryanair the bargaining power while negotiating this deal. Air France-KLM is gearing up to invest in the rail services that will have an effect on the market shares of budget airlines (Economist. To maintain the rate of 80% seat sold/plane and prompt a reluctant flyer to fly with Ryanair and preventing consumers to use the rival budget airlines like easyJet. 2008). The high speed Eurostar and TVG rail services are gaining stature and competing directly with airline on certain routs.). is resulting in price cuts (Milmo. 2008.

The Air France-KLM has signed a joint venture with Veolia (French transportation service-provider) to provide high speed rail service between Paris and Amsterdam and Paris and London (BusinessWeek. French and Spanish markets. In Italy. easyJet has filled the gap on the map. 6. The recent integration of GB airways into easyJet has contributed significantly in the form of young fleet of 15 aircrafts in the exiting fleet of easyJet.7 million. 2008a). The use of railway system has ended Air service between routs such as Paris and Brussels (Matlack. Government policies. 2008b).18 billion in the year 2007. easyJet is focusing on Italian. Organization performance creating future opportunities and others influenced factors are mentioned. 2008a). The national railways of Germany. According to these the total revenues are up 31% to £2362. SWOT analysis: SWOT analysis especially focuses on threats and opportunities created under Micro and Macro Environmental condition. France. Fuel increment. EasyJet's fleet consists of 165 aircraft of which 75 are company owned (EasyJet. 2008a). In these markets new bases have been acquired and new routes have been developed. The higher numbers passengers choosing Eurostar over an airline has resulted in an increase of 15. 2008). easyJet is the principal competitor of Ryanair. The railway travel is expected to increase in the future.Due to the similarities in the business models.8 million compare to the £1797 million in the year 2007. Bari and Palermo (EasyJet. Beside the revenue and passenger numbers. . 2008). Concentrating on parts like Competitors threats. with this integration. in the era of rocketing fuel prices and higher level of environmental consciousness and troublesome security and baggage checks at airports making train an attractive alternative to air travel (BusinessWeek. Switzerland. EasyJet has announced its preliminary results for the three quarters of year 2008 ending on 30 September. operated by SNCF. 2. 2008b). Austria. the Netherlands and Belgium along with the Eurostar are forming a partnership in order to built high speed connections between the major cities of these countries (BusinessWeek. which was created due to the fall of Alitalia. carried 8. In order to further strengthen it market share. (Ryanair. by including domestic route such as Naples. Furthermore.26 million passengers in 2007 that amount of 70% commuters between London and Paris.4% in Eurostar's revenues to $1. easyJet has strong liquidity with £863 million in cash on the balance sheet. EasyJet's differentiate itself on the basis of it network that is consist of major and convenient airport in a bid to attract more customers. easyJet has acquired 18 new destinations and access to new bases such as Manchester thus strengthening its network and customer numbers (EasyJet. customers are opting for the railway travels for short haul destinations. C. 1. The passenger numbers have also shown improvement with the 17. The Eurostar service between London and Paris. European railways: The development in Europe's railway sector is decreasing the travel time between destinations. Strengths Ryanair is the first budget airline in Europe and still the Europe's largest low fare carriers. On the other hand. Due to this fact.3% rise to 43.

From the technological view. 2008). hence Ryanair performance in share market business is weak. 2008). 2008). 3. airport charges are low which Ryanair benefited from.2 billion is assisting Ryanair in its expansion plans and talk with airline manufacturing organization are going on that may result in the delivery of 200-400 aircrafts from 2012 (The Independent.8 years and with modern modification to achieve fuel efficiency has helped Ryanair to reduce maintenance and fuel costs (Ryanair. airport environment and not fulfilling the customer satisfaction resulted in lower ranks for Ryanair by SKYTRAX approved airlines (Airlinequity. . 2007). Government polices under Micro and Macro Environmental analysis. Having a strong brand. fuel increment. In the third quarter net profits. another impact of having a strong brand. 2. Ryanair has and continue to offer the lowest fare in Europe. Disputes between Mr. the oil prices are low and provides an opportunity to negotiate fuel hedge at lower price. 2008). Ryanair through its 14years in the Low-Cost carrier (LCC) market has developed well recognized brand name. Decrease in share value could make Ryanair to lose more shares in European market. low bag losses are the main factors control under customer satisfaction (Ryanair. high rate of flight completion. Fuel emission. Albeit. 2008). 2008). An attempt made by Ryanair CEO to the pilots to use less fuel (Swinford Steven.2008). Keeping the aircraft fleet of single type airplanes with an average age of 2. Ryanair shares fall by 27 % which weakened the company future trading process (RTE Business. immigrants and the foreign investors. Changes in government regulations. but any future increase in oil prices may result in higher costs and may ultimately effect the future expansion plans (Ryanair. O’Leary and Irish environmental minister in 2007 may hamper the promotional Strategy of Ryanair (Cheapflights. Threats This report has mentioned some certain threats of competitors. is one of the reason their best performance. Noise reduction. Ryanair create efficient way to operate in regional airport like Charleroi. Weaknesses Due to poor onboard Staff service delivery. The recent rocketing oil prices resulted in higher fuel cost for Ryanair. The cash reserves of €2. Ryanair always being keen on Customer welfare. Ryanair. 2008). Punctuality. Ryanair has reduced per passengers emissions through higher load factor (Ryanair.com) to Non-EU nationals may affect the growing number of multinational companies. 2008). 2008) is causing disputes which shows poor relation between employees. to make passenger air travel affordable and accessible to the European countries (Ryanair. Limited shared issued in the European market by Ryanair (Share capital.

mostly in London and other European market are high risk for Ryanair. Expansion strategy: Ryanair is planning to beef up its aircraft fleet in order to meet the future growth targets of 90 million passengers per year. Opportunities The International Energy Agency (IEA) forecast for Oil price is low in the year 2009 due to the global economical slowdown. Low fare strategy: The recent credit crisis and the recession in the major EU economies are forcing ordinary people and business to decrease cost in every aspect of their activities. there is an emphasis on using the cheapest mode of transportation. The steady growth in the passengers’ numbers over the years. Intercepting the easyJet’s strategy of flying to convenient airports and crafting routs that decrease commuters’ dependency on the future railway services may bring efficiency to the price decrease and expansion strategy. Ryanair is successful to achieve consumer confidence and can see that consumer are much interested intentionally as well as internationally. .pdf Accessed on 13h November 2008. Ryanair negotiating with Airbus and Boeing for new aircrafts. presence of € 2. this bargaining power could help Ryanair cut costs and improve revenues because the recent credit crunch and recessions are forcing these organization to sell their products on lower prices ((Arnott. Ryanair has to focus on its competitors such easyJet and European railway services. S. 2008). Due to the lowest fare in the European airline industry. Ryanair’s strategy of flying to the secondary airports that in some cases are far away from the main destination may limit the benefits of this strategy. C. when making a decision about flying to holiday destinations or flying company’s officials for business purposes. and directly effect the Ryanair's financial situation which will result in low passengers numbers (Ryanair. The massive development in the European railways transport sector is a future threat for Ryanair (Matlack.2 billion cash on the balance sheet. Association of European Airlines. higher bargaining power over aircraft manufacturers may provide strapping assistance in doing so.be/RIG/Economics/DL/SI_2008Maypub. 2008.aea. In order to compliment this expansion. Ryanair may become the first choice of transportation for masses. However. Increment on taxes and government policies are subject to change and any drastic changes in regulations or in taxes may affect the Strategy of Ryanair. 2008). Conclusion: This part will be divided in tow part in order to evaluate Ryanair’s strategy of Low fares and future expansion. S. The low oil price provides an opportunity for Ryanair to negotiate fuel hedges at lower prices (Arnott. 7. 2008). As mentioned on the micro environmental analysis. State of the industry. 2008). it's easy to measure consumer expectations for their massive expansion by 2012. Consequently. Reference: 1) AEA. 4. Available from: http://files.Future acts of Terrorism or significant terrorist threats.

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Assessed on 25th Nov. M. Ryanair to cut fares by 20% to combat growing pressure on passengers numbers. Ryanair. 2003. Detailed Discussion and analysis. Assessed on 26th Nov. 2008.uk/features/how-oil-prices-and-credit-crunch-affect-aviationlaw-0 Accessed on 16th November 2008.pdf .ryanair. (1986). 36) Sky News.pdf . Assessed on 26th Nov. Ryanair fuel ration angers pilots.finance-magazine. Limitations on Share ownership by Non-EU nationals. Assessed on 27th. 37) Smulian. 2006.timesonline. 08. Available from: http://news.timesonline.com/site/SE/about.69-89 30) Ryanair. Assessed on 26th Nov. Environmental analysis units and strategic decision-making. the times.ryanair. 2008. Available form: http://www. 08. Nov. Ryanair warns against budget Travel Tax. Ryanair Europe’s Greenest airline.php?yr=08&month=oct&story=reg-en-131008. Assessed on . 41) Thomson Robertson.com.ryanair.com/site/EN/news.4461855. Available from: http://www. How oil prices and the credit crunch affect aviation law. Available from: http://www. 2008. 08. Ryanair news.ryanair. 39) Swingford Steven. Plane Daft : Ryanair Slams new free. 35) Ryanair news. Available from:http://business. 08. Available form: http://www. 2008. 2008. T.co. Available from: http://business.php?page=About&sec=environment . Available from: http://www.pdf .co. Available from: http://www. Lenz.com/site/about/invest/docs/2008/20F%202008.uk/tol/business/industry_sectors/transport/article5076102. Engledow. 08. how Ryanair does it. Ryanair’s Traffic Grows 19% in August.ece . 2008. 34) Ryanair.php?i=4203&n=335 .scotsman.ece . p.sky. The Law Society.29) R. 2008. 38) Sorahan Neil.lawgazette. 08. 31) Ryanair.com/site/about/invest/docs/ShareCapital. Treasury profile. Available from: http://www. Available from: http://www. 08.uk/tol/business/industry_sectors/transport/article4641399. 08. Jack L. The Scotsman. Available from: http://business.com/skynews/Home/Business/Budget-Airline-Ryanair-To-Pull-Out-Of-BlackooolAirport-Over-A-New-10-Pound-Charge/Article/200811415161306? lpos=Business_News_Your_Way_Region_7&lid=NewsYourWay_ARTICLE_15161306_Budget_Airli ne_Ryanair_To_Pull_ Out_ . Assessed on 26th Nov. Ryanair Holding Plc. Assessed on 26th Dec. 40) Robertson David.co.com/business/Ryanair-passenger-numbers-up. 33) Ryanair.ryanair.com/site/EN/news.com/site/about/invest/docs/2008/q4_2008_doc. 08. 2008. 2008. Ryanair passengers number up.php?yr=08&month=sep&story=pax-en-040908&view=email Accessed on 22nd November 2008. Assessed on 26th Nov.com/display_article.ryanair.jp. 32) Rynair. Assessed on 25th Nov.

To generate profitability the company focuses on maintaining low costs and efficient operations.traveldailynews. RGE Monitor. the ability to maintain market share and growth in a segment characterized by intense competition. Business Model & Strategy Ryanair operates as a cost leader in the low cost segment of the airline industry. Low-cost carrier. Ryanair not only charges the lowest prices in the industry. The key issues facing Ryanair include how to remain profitable in light of rising fuel prices and currency exchange risk. 2008. Assessed on 26th Nov. 42) Travel daily news. but they also enjoy the highest margins when compared to direct competitors. . As a budget carrier they aim to achieve high volume sales by attracting passengers with low prices.com/euromonitor/254576/the_irony_eu_gets_a_stimulus_package_together_before_the_usa Accessed on 13th November 2008 Ryanair Executive Summary Ryanair operates as a cost leader in the European low cost carrier segment of the airline industry.org/wiki/Lowcost_carrier Accessed on 15th November 2008. Ryanair to compete with rival on holiday routes. Many of these competitors are large companies that enjoy considerable market share and have established strong brand identity among consumers.timesonline. The irony: EU gets a stimulus package together before the USA. it is not mature and has continued to experience growth over the years. 43) Wikipedia.com/pages/show_page/27212 . Available from: http://en. 2008.co. Ryanair to emerge bigger as consolidates. While the industry is wellestablished. Ryanair has seen growth in traffic and reported record revenues. Available from: http://www. 08. In addressing these key issues. P. To remain profitable the company focuses on maintaining low costs and efficient operations. Available from : http://www. R.ece Accessed on 20th November 2008. 44) Woodman. Dominant Economic Features of the Industry The airline industry is a well established industry comprised of a large number of firms operating both regionally and globally. Wikipedia. The Independent. Costco will be able to maintain their position as market leader and continue to operate profitably in the discount membership warehouse segment of the retail industry.uk/tol/business/industry_sectors/transport/article1765284. available from:http://business. 2008. and whether or not it would be profitable to expand into the growing international/emerging markets and internet retailing space.rgemonitor.wikipedia. As a result of charging some of the lowest prices in the industry. As a cost leader they aim to achieve high volume sales by attracting customers with low prices. 08. it is recommended that Costco focuses on opportunities in the internet retailing space to grow bottom and top line growth as well as increasing market share.25th Nov. It is also recommended that they remain committed to their low cost high inventory turnover strategy in order to continue to offer consumers the lowest prices and achieve high inventory turnover. By taking these initiating the strategies summarized above. 45) Wilder.

There are a variety of websites that allow consumers to compare prices among competitors and find the best deals available. as well as airlines that are not currently competing in the low cost space. in poor economic conditions a longer car ride that will cost less may be more favorable.8% of total passengers in 2005 (see Exhibit # 1). This segment is comprised of a large number of companies that operate regionally throughout Europe. and are unable to switch. competitors are continually looking for new ways to decrease costs and improve efficiencies in order to offer passengers the lowest fare option. Overall. Threat of Entry (Moderate): High capital costs and regulations make threat of entry for the airline industry very low. and number of destinations serviced. also increases supplier power. Adding to the rivalry is the presence of excess capacity. Similarly. Ryanair and easyJet. budget airlines have seen an increase in this threat as a result of the expected growth in the segment. will enter the market to increase profitability and gain market share in the industry. Because price is the main driver of purchasing decisions. together they served 55. short haul carriers. ancillary offerings. providers of airplanes and fuel make supplier power in the industry high. Airlines protect themselves from these volatile prices by entering into hedging contracts.Within the European airline industry is the low cost carrier segment. the attractiveness of alternative methods of transportation varies depending on several external factors including. Suppliers of airplanes have very high power in the industry. The segment’s two main competitors. It is likely that new companies. Rivalry (High): Rivalry in this segment is high. If their hedging is unsuccessful. Supplier Power (High): There are two main types of inputs for low cost airlines: planes and fuel. There are only a few large companies that sell airplanes throughout the world. Recently the segment has seen a large amount of new entrants. Substitutes (Moderate): Substitutes for the airline industry include cars. 5 Forces Analysis: Low Cost Carrier Airlines (Highly Competitive) Buyer’s Power (High): Buyer’s power in the low cost carrier segment of the airline industry is high. While the convenience of getting to a destination more quickly may be an added incentive for customers. Low cost airlines operate in a highly competitive environment. the economy. this is an increase of 3% from the previous year. Taking into account contracts. such as new high margin ancillary services in order to increase revenues and differentiate themselves among the competition. Fuel is a commodity product with highly volatile prices. Airlines typically lock into long term contracts with suppliers to either purchase or lease aircraft. they are stuck with higher than market costs. in 2006 the segment made up 18% of the European airline market. This has led to moderately differentiated service offerings as companies attempt to separate themselves on the basis of price. The second input for the industry. a sign that the market expects growth to continue in the near future. have established strong brand identity among consumers and enjoy considerable market share. These contracts will lock them into a specific price that they forecast will allow them to beat the market in upcoming periods. Together. variety of services. quality of service. the high cost of planes and considerable length of time between order and delivery makes it more difficult and more expensive to switch suppliers if airlines are unhappy with the service or products they are being provided. The average load factor among major industry . perceived airline safety and the distance passengers are traveling. For low cost. however. Competitors actively launch new offerings. trains and boats. There are approximately 19 different carriers in this space that are continuously looking for ways to increase market share and profitability. Overall threat of substitutes is moderate. fuel. There are a large amount of companies competing to gain market share and increase profitability. Low cost carriers have seen growth in recent years. these characteristics make new entrants a moderate threat to low cost competitors. heightened terrorism alerts or recent crashes may make travailing by rail or car more attractive. There are a large number of buyers that incur little to no costs when switching to competing brands.

a portion of the additional cost gets passed on to passengers in the form of higher air fare. Passenger Check-in and Luggage Handling: Ryanair recently instituted web based and priority check-in services to minimize the need for check-in personnel. The intense rivalry will cause companies to continue to differentiate themselves by offering new services and finding new innovative ways to attract customers. They also began to charge customers for checking in bags. Non Union Employees: Ryanair is the only airline in the industry to do operate with a non-unionized work force. Insulation from Competitive Forces As a cost leader in a highly competitive market. FORCES OF CHANGE The expected growth in the low cost airline industry will increase rivalry as competitors continue to fight for market share and profitability. In order to do this. . This is a sustainable competitive advantage in the near term over carriers that have mixed fleets. Airport Charges and Route Policy: Ryanair services point to point only routes and chooses hubs that are typically based in less congested airports. it is extremely important for airlines to max out their capacity and fly full planes on every route. While there has been criticism and negative results from not allowing their work force to unionize it has yet to be detrimental to their performance. This is a sustainable competitive advantage as it gives them a significant cost savings and allows them to under price the competition. Lowest Fares among Low Cost Carriers: Ryanair has the lowest fares in the industry. as well as. These measures help Ryanair insulate themselves against the competition as they are able to cut down on costs and be more efficient. This is not a sustainable competitive advantage as other airlines are likely to adopt similar measures and processes that will give them the same benefits. a lighter airplane load increases travel speed and decreases fuel burn per trip. Youngest Fleet among European Carriers: By having the youngest fleet in the industry. Ancillary Revenues: Ancillary revenues for Ryanair are an important competitive advantage. Finally. Aircraft Commonality: Ryanair uses one type of aircraft across their fleet which helps them minimize training and maintenance costs. adding to the rivalry is the absence of switching costs for consumers when deciding which airline to fly with. Even if these competitors plan to move to a more common fleet. Ryanair benefits from having more fuel efficient and environmentally friendly planes that significantly reduce costs and allow them to offer the lowest fares in the market. This competitive advantage will diminish over time as companies with older planes begin to update their fleets while Ryanair’s planes become older. competitors have to fight for passengers by offering low prices and additional services that will attract customers when they make their purchasing decisions. it is essential that Ryanair operates on a low cost strategy in order to maintain growth and profitability. This is a competitive advantage over carriers such as Air Berlin who offers connecting flights. encouraging passengers to travel with fewer bags. this could take several years considering the high cost and lengthy time table of obtaining additional aircraft.rivals is 76% (see exhibit 2). This insulating factor allows them to save significantly on costs. While Air Berlin and easyJet may offer more convenience. The company enjoys several competitive advantages that help to minimize costs and operate efficiently in order to insulate themselves from the competitive forces in the industry. This is a sustainable competitive advantage as price is the most important purchasing decision for passengers when selecting an airline carrier. such as Air Berlin. Due to high fixed costs. This has the benefit of adding an additional revenue stream. Non scheduled services provide the company with a high margin revenue stream that directly affects their ability to provide the lowest air fare in the industry. this is a significant factor in their ability to minimize costs and maintain profitability. and easyJet who uses hubs in more centrally based airports. They have achieved this consistently over the years despite steep rises in fuel costs and unsuccessful hedging.

destinations served. this has been illustrated by Ryanair’s ability to achieve record profits despite a perception that they are the world’s least favorite airline. Finally. Airlines may consider parking planes and pulling back on the amount of routes offered in order to keep capacity at a profitable level. These services help minimize costs as it reduces staffing needs. but have much lower price points. Terrorist activities would be another force of change in the industry. As the maps depicts. poor economic conditions will still have an impact on the industry as a whole. they offer the lowest fares in the industry. Increased costs would force the industry to improve operating efficiencies and minimize costs in other areas to remain profitable. they have slightly lower fares and service much fewer destinations. Ryanair’s operations are focused out of less congested airports. Ryanair offers web based check-in and priority boarding. The . the operating environment will become dominated by a few very large players. In order to maintain profitability and growth in this new regulatory environment. Smaller companies may find it harder to compete as larger companies may benefit from economies of scale that will allow them to charge lower prices while maintaining profitability. convenience and additional services offered. Another important factor that determines competitors market positions are the additional non-scheduled services that airlines offer. While short-haul budget carriers are less effected by economic downturns than more expensive airlines. changing economic conditions will be a force of change in the industry. These two companies do not operate on a pure low cost model. the two that are most important to purchasing decisions are price and destination. Some budget airlines have said that fees are out of proportion to the fares actually paid by passengers.Intense competition will continue to be a primary driver of change in the industry. people will travel less. price. Passengers have shown that price far outweighs any other deciding factor. Destination is the second most important factor as a passenger will not choose an airline if that airline doesn’t service routes to their desired destination. Of these factors. While they don’t service as many locales as Lufthansa and British Airways. they offer connecting flights and operate beyond a regional level. The strategic group map below shows competitor’s market positions in terms of price and number of destinations serviced. they fill a gap in the industry by operating out of many more airports than their low price rivals. The new passenger assistant regulations that went into effect in 2005 have led to a dramatic increase in costs. If this trend continues. this is a strategic element of their low cost business model as it helps to minimize costs and improve operational efficiencies. Air Berlin and Aer Lingus are located in the low right hand side of the map. as illustrated above. making it more difficult for airlines to operate on full capacity. longer check-in processes and heightened security measures. airport costs and streamlines operations. Lufthansa and British Airways service the most destinations and charge the highest fares compared to their competitors in the industry. Another force of change in the industry will result from new regulations and taxes that are currently being introduced. Market positions of key competitors Buyers in the low cost carrier segment of the airline industry make purchasing decision based on several factors including. FlyBE and easyJet service a similar amount of locales. The final competitor on the map is Ryanair. In recessionary times. Any future incidents will have similar affects and may lead to decreased demand for air travel and higher costs for the airline. airlines in the industry differentiate themselves based on these 4 factors. airlines will be forced to look for ways to improve operations in order to avoid increased operating costs and minimize the impact of costs that cannot be avoided. All these competitors service more centrally located airports in addition to less congested ones. Both airlines offer connections and operate long haul routes. Recent incidents that have occurred have lead to higher insurance costs. There is evidence of a trend toward consolidation in the market as many airlines have been overtaken or have merged with competitors to try and better position themselves.

As the airline industry operates on high fixed costs it is likely that some companies will see benefit from merging operations. To improve profitability. Industry Success Factors A key success factor in the airline industry is the ability to offer low prices. fighting to maintain a non-unionized work force and high insurance fees are some of the strategies that have led to poor brand perception by the general public. has recently struggled in terms of profitability. In order to return to profitability. as well as create synergies by combining operations. to help expand in a cheaper more efficient way. for example. Poor customer service and employee relations are a direct result of their strict focus on decreasing costs. snacks and newspapers. they reported a pretax loss of €60 million in 2006. The low cost airlines that will most likely expand into these spaces are the ones that have been operating successfully and have access to the capital necessary to make the investment. Michael O’Leary has continually fought to keep costs low. this is part of their strategy of catering to business customers. and launching new service offerings. considering that their brand is the 5th most recognized brand on Google and that they have the largest travel website in Europe. Strategic Moves Rivals are likely to try and differentiate themselves among competitors in the industry in order to increase market share and fuel growth. While Ryanair has intentionally positioned themselves in the industry as a profitable low cost airline. This move is likely as the considering the expected growth in the segment. companies will focus on decreasing costs. Ryanair’s CEO. they are well positioned to increase profitability by moving into this space. particularly considering the rising fuel costs. and the merging of two airlines in the industry. His unwavering commitment of executing strategies that are closely aligned with the company’s business model has stirred controversy and contributed to a poor brand image in the industry. EasyJet. less intentionally. this calls into question his leadership skills and as a result the brands poor in terms of public perception. Competitors such as Ryanair will likely take advantage of this. and increase costs stemming from newly introduced regulations. There are regions in Europe that are underserved with considerable demand. In order to offer low such low prices. the additional cost associated with this has a direct effect on their profitability. Low cost airlines are also likely to enhance web site capabilities and take advantage of the revenue opportunities in the ecommerce market. current airlines that are not in the low cost space may make a strategic move to buy a smaller low cost carrier as a way to enter the industry and increase market share. Other likely strategic moves include the takeover of smaller budget airlines by larger airlines. Air Berlin deviates from this low cost model and provides customers with free in-flight drinks. poor employee relations and untactful leadership. Additionally. increasing ancillary revenues.ancillary services that airlines offer not only allow competitors to differentiate themselves. offering the companies the opportunity to gain market share and increase profitability. however. Moves to consolidate in the industry are likely. Ad revenue is an extremely attractive possibility for companies as the revenue associated with this has virtually no costs yielding an extremely high margin. high fees for wheelchairs. the high number of law suits filed by and against the company are a direct result of O’Leary’s conduct. Their poor performance is mostly due to high costs associated with operating out of congested airports. they have also been positioned. and remain a low cost provider the company will likely focus on decreasing costs and increasing ancillary revenues to improve profitability. one of the most important factors for passengers when choosing which airline to travel. This may differentiate them in the market place. Another likely strategic move is the expansion of operations by increasing capacity and moving into new markets. Many passengers who have a poor perception of the company will continue to fly with them as long as they continue to offer the lowest prices in the industry. but they are also an important source of high margin revenue. airlines must continue to focus on . as having poor customer service.

543.57x in 2006 to . This is particularly important when it comes to highly volatile fuel costs. The first half of 2007 saw revenues of €1. an increase of more than 5% compared to the end of 2006. Debt-to-Assets Ratio: Ryanair’s debt to assets ratio is strong as it has decreased from .3% in 2005 to 6.00x. so while new assets maybe on the books. As a cost leader. ``````````````````` investment. By operating more efficiently and having more productivity per employee. In the first half of 2007 they had a gross margin of 41. Return on Equity: ROE has decreased from 16. It is extremely important that airlines fly routes as close to full capacity as possible. In order to be profitable. while operating costs remain flat. There is a large time lag between airplane purchases and delivery.5%. .7%.decreasing costs and streamlining operations in order to be profitable. The company generates enough revenue to cover all operating and business costs allowing them the ability to finance future growth. Ryanair is able to minimize costs. such as poor economic conditions.5% in 2006 to 15. Revenues: In 2006.5% in the first half of 2007. 54x in the first half of 2007. however recent growth initiatives may be the culprit behind the declining trend. making it likely that Ryanair will see an increase in revenues for the full year. Key Financial Ratios (See Exhibit 3 for complete analysis) Gross Margin: A margin analysis reveals that Ryanair is the one of the most profitable airlines among industry competitors (see exhibit 4). Revenue/Employee: Exhibit 5 shows that Ryanair operates much more efficiently compared to competitors in terms of revenues per employee. While the decreasing trend is not positive. these locales must also have a high demand for travel so that the airlines are able to maximize capacity. it is essential that airlines focus on maintaining full capacity.46x in the first half of 2007. In 2005 Ryanair’s gross margin was 41. destination is also a major factor. compared to Lufthansa’s €487. they may not be in use and generating revenue for the company. The company is not very reliant on borrowed funds to finance the firm’s operations considering their debt-to-assets are well below 1. in 2005 their net margin of 21% was more than 10% higher than any other competitor. a low load factor leads to a decrease in revenues.86% in the first half of 2007 revealing a declining trend for return on total investments. ROE is above average and indicates that investors are earning a healthy return on their investments. While purchasing decisions in the industry are largely based on price.690 and €384. ratios above 2.00x reveals that the firm is liquid enough to pay all short term liabilities. These revenues will help them to absorb costs stemming from new regulations in the industry. Ryanair saw revenue growth of 27% over the previous year. terrorism and airline crashes. A final key success factor is offering routes to destinations that are convenient for customers and in popular geographic areas where there is high demand for travel.55x in 2005 – 2. a direct result of an increase in passenger traffic over that same time period.801. It is essential that a company be able to successfully hedge fuel so that they do not get burned in times of both rising and declining oil prices. a decreasing ROA is concerning as it suggests that the their operations are not being managed in accordance with their strategy. Current Ratio: Ryanair’s current ratio has decreased from 2.1 billion. To be successful budget airlines must be able to offer flights to destinations where customers want to go. Return on Assets: Return on assets has decreased from 7. With such high fixed costs. a key factor in the ability to remain profitable as a cost leader. In 2005 revenue/employee was €506. A second key success factor in the low cost segment of the airline industry is load factor. significantly higher than their competitors who operated on gross margins ranging between 20% and 30% that same year. the impact of decreasing demand stemming from external factors beyond their control. however if the ratio continues to decrease over time the trend would be concerning. a crucial factor in being able to operate profitably. more than 75% of 2006’s full year revenue. as well as. The company also outperforms competitors on an operating and net margin basis.

poor employee relations and untactful leadership by CEO. ALTERNATIVES Below are several alternatives that should be considered in order to address the key issues outlined above and position the company to obtain continued profitability and increased market share in the future. The fact that the industry as a whole operates with excess capacity reveals excess supply. Maintaining Profitability * Hedging Poor Brand Perception * Institute a new employees training program that will instruct employees on how the company wants . Strengths: * Lowest fares in the market * Continuing profitability despite significantly higher fuel costs * Largest travel web site in Europe * Strong brand recognition (5th most recognized brand on Google) * No fuel surcharges passed on to customers * Focus on ever decreasing costs * Number one for punctuality among European airlines * Fleet commonality * Point-to-point service | Weaknesses: * Poor employee relations * Extra capacity creating uncertainty of success of new routes and locations * Historically unsuccessful hedging * Untactful leadership by CEO Michael O’Leary * Poor brand perception: voted least favorite airline * Poor public image * Insurance fee charge through to customers is extremely high * Poor on board sales * Airports far from central locations | Opportunities: * Market growth * Route expansion * Convert web site traffic into e-commerce and advertising revenues | Threats: * High fuel costs * Intense competition * New regulations and taxes would lead to an increase in operating costs * Increased terrorist activity could lead to higher insurance premiums. Poor alignment between certain ancillary services and customer’s needs are another key issue facing the company. This is a key issue facing the company especially if customer’s perceptions evolve and service becomes more important. They have been successful at aligning their strategies with their low cost business model by offering point-to-point only routes. Flying planes with excess capacity has a significant effect on their bottom line. The SWOT analysis below summarizes the above analysis. it is likely that the company is missing out on additional revenue from those customers that are willing to pay an additional price to get better service. as well as a offering a large amount of destination options.16x. Ryanair has very poor perception in the industry. Ryanair must give themselves leeway in defending against these external factors in order to maintain profitability and increase market share. As a low cost airline any increases in operating costs have a large affect on their bottom line.00x is concerning and suggests that they have excessive debt and lower credit worthiness. a direct result of poor customer service. Michael O’Leary.30 in sales per passenger. While consumers in the industry have proven that they will still fly with Ryanair despite poor customer relations. SWOT Analysis The situation analysis reveals that Ryanair is operating in a unique segment of the industry by offering the lowest prices. and a decrease in travelers | KEY ISSUES FACING COMPANY Increasing costs as a result of unsuccessful hedging and newly adopted regulations are a key issue facing Ryanair. avoiding congested airports and taking advantage of ancillary offerings. a ratio above 1. Low credit worthiness may make it more difficult for the company to borrow to fund growth initiatives.Debt-to Equity Ratio: Ryanair’s debt-to-equity ratio is currently 1. They have made several poor investments for on board revenues as they are generating only €1. There expansion efforts have been increasing capacity and without an increase in customers the cost of the expansion will be larger than the return on investment. Low load factors are a second key issue facing the company.

it is recommended that Ryanair design a frequent flier program to reward customers for being loyal Ryanair passengers. Additionally. Absence a reward program. How Costco responds to intense competition. the passenger may choose to pay the higher price in order to take the more convenient route. If Costco stays away from these strategies and maintains those core competencies that are the centerpiece of their business model. In order to increase capacity. Because they are operating in a highly competitive environment there are many times when differentiated offerings from other airlines may sway a passenger to choose the competitor if there is not a large difference in price. it is crucial that Costco remains committed to their low cost strategy. a passenger that is looking to fly to a certain destination may have the option of flying Ryanair and arriving in a less centrally located airport or pay a slightly higher price to fly easyJet and arrive closer to their destination. only offering limited varieties of product in bulk sizes and other strategies that minimize their cost of operations. This strategy would be well aligned with their business model and allow them an additional revenue stream in order to protect against any unexpected increase in costs. they will be able to gain advantage over the competition especially in poor economic times. as well as currency exchange risk. For example. Their many strengths put them in a good position to deal with forces of change in the industry as well as give them the ability to address key issues threatening their profitability. This strategy will be more successful than increasing advertising and marketing spending. an uncertain economic environment and uncertainty surrounding how to allocate investments in expanding in growing markets will dictate their profitability and performance in the future. Their success is a direct result of their commitment to maintaining low costs in order to be able to offer their customers the lowest prices and achieve a high inventory turnover. It is strongly recommended that Ryanair leverage their website by entering into ecommerce in order to take advantage of the high margins revenues that could be generated through ad sales. To do this it is recommended that they continue to hedge against oil prices. if Ryanair had a loyalty program the added benefit of CEO Michael O’Leary needs to pick his battles CONCLUSION Costco has remained a successful competitor in the warehouse club segment of the retail industry over the years. especially considering the higher cost of expanding internationally.all * Capacity * * Leadership Ryanair Increase staff a * customers presence at to airports loyalty and be and on rewards advertising treated board program expenses Institute Increase passenger marketing RECOMENDTIONS It is important that Ryanair continue to focus on decreasing costs and improving operational efficiencies in order to maintain profitability. They have been able to execute this strategy profitably by insulating themselves from competitive forces in the industry by establishing strong distribution and supplier networks. Competitors are beginning to alter the fundamentals of the warehouse club segment by increasing costs to provide a more enjoyable customer experience and increase brand awareness. however. maintaining strong inventory management. Their historical success in catering to small businesses makes internet retail a more attractive and profitable endeavor over international growth prospects. It is recommended that Costco allocate more resources to growing their internet retail business over expanding in international markets. EXHIBIT 1: PASSENGER SHARE (EUROPEAN LOW COST CARRIERS) . Ryanair must reevaluate their on-board ancillary services to determine if they fit the needs of their passengers.

95 | 31.65 | Sum of Importance Weights | 100% | 41.50 | 1.1 2 1.9 | | | | | | | | | | | | | | | | CAPACITY INDUSTRY Passenger Miles | 18.6 | 147.70 | 6.00 | 1.20 | 7.50 | 5.20 | 7.20 | Overall | Strength | Weight | Ryanair | 41.36% 75.00 | 0.6 | STRENGTH | Available Seat Ryanair | Aer Lingus British Airways easyJet | Lufthansa | Southwest | Air Berlin FlyBE | EXHIBIT 3: Miles | Revenue 24.50 | 0.70 | Air Berlin | 31.2 | | 12.4 | 108.2 | 85.50 | 6.60 | 9.00 | 2.10 | .1 | 144.8 | COMPETITIVE Load Factor 77.9 32.40 | 6.00 | 1.00 | 2.50 | 0.50 | 2.40 | 7.40 | Destinations | 10% | 8.00 | 0.00 | 0.80 | 6.50 | 1.23% 68.30 | 6.3 | | 4.*OTHER Sterling/Maersk brmibaby dba Hapag Vueling Norwegian Virgin SkyEurope Wizz Wind Air Fly Jet2 Monarch Total EXHIBIT | | | Lloyd | Air Express | | Jet Baltic Me | Scheduled | 2: PASSENGERS | Express Shuttle | | | | | (MILLIONS) 3.37% 73.65 | Operational Efficiencies | 20% | 9.40 | 7.7 2.5 3 | 2.50 | 6.8 | | 3.50 | 1.5 | 2.66% 85.00 | 1.00 | 1.9 1.5 0.40 | FlyBE | 34.00 | 1.4 3.00 | 1.00 | 6.00 | 1.00 | 1.80 | 7.20 | Aer Lingus | 31.65 | 6.05 | 34.50 | 8.91% 75.5 0.50 | 6.80 | 7.50 | 1.70 | 8.2 | | 9.30 | easyJet | 39.8 3.00 | 1.50 | 6.00 | 1.80 | 6.42% ASSESMENT | | | | | | | | | KEY SUCCESS FACTORS | Weight | Ryanair | easyJet | FlyBE | Air Berlin | Aer Lingus | | | Strength | Score | Strength | Score | Strength | Score | Strength | Score | Strength | Score | Low Costs | 30% | 9.50 | 1.5 26.30 | Ancillary Revenues | 20% | 8.7 | 2.00 | 1.03% 70.50 | 8.20 | Load Factor | 20% | 7.9 | 27.40 | 39.60 | 7.66% 78.25 | 5.2 | 60.4 | | 111.00 | 1.50 | 0.50 | 1.10 | 31.00 | 1.50 | 1.9 1 1 0.50 | 9.40 | 6.

301 | 139.71x | 6.55x | 2.07x | 9.71% | 35.71% | 35.252 LEVERAGE RATIOS Debt-to-Assets | 0.844 | Fuel & Oil | 265.515 | 1.16x LTD-Equity | 0.90x | 0.9 | 955.672 | 164.288.384 | Airport & Handling Charges | 178.71% Net Profit Margin | 21.83x | 0.6% | 25.04% | 41.074 | Gross Profit | 550.91x | 5.349 | Gross Margin | 41.417 | 21.90x EXHIBIT 5: GROSS MARGIN RECONCILLIATION (INDUSTRY) *RYANAIR | 2005 | 2006 | 1H2007 | Total Revenues | 1.20% ROA | 7.83% | 22.037 | 1.26% | 6.42x | 2.16% | 30.632.352 | 342 | Gross Margin | 23.77x TIE Ratio | 5.EXHIBIT 4: KEY FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | PROFITABILITY RATIOS | 2005 | 2006 | 1H2007 Gross Margin* | 41.319.692.1 | Ground Handling | 89.423 | Cost of Goods Sold | | | | Staff Costs | 141.12% | 26.50% | 15.003 | 8.981 | 521.801 Inventory Turnover | 312.74 | $42. Materials & Repairs | 26.394 | Route Charges | 135.5 | Fuel | 134.2 | Airport Charges | 178.89x | 56.49% Operating Margin | 25.313 | Aircraft Rentals | 21.10% | 16.163 | 1.67 Receivable Days | 5.577 | 98.54x | 2.4 | 2.0 | 136.256.466 | 337.119 | 1.276 | 462.33x | 1.1 | 1.2 | Lease Charges | 44.136 | 1.280 | 37.346.55x | 0.9 | 112.0 | 260.57x | 0.097 | Total COGS | 768.0 | 119.207.03x Receivables Turnover | 63.206 | 592.2 | Maintenance | 75.755 | 1.20x | 1.7 | COGS | 772 | 6.549 | 735.32 | 202.042 | Maintenance.54x Debt-to-Equity | 1.0 | 123.7 | 559.46x Quick Ratio | 2.65 | $39.33% | 7.86% ROE | 16.099.5% | .546 | 47.376 | 25.39 LIQUIDITY RATIOS Current Ratio | 2.000 | Gross Profit | 230 | 2.43x | 2.673 | 171.46x Working Capital | 1.530 | 1.341 | Employee Costs | 249.34x ACTIVITY RATIOS Days of Inventory | 1.45x | 7.49% | | | | | INDUSTRY (2005) | AIR LINGUS (€) | BRITISH AIRWAYS (GBP) | EASYJET (GBP) | Total Revenue | 1.0% | 27.23% | 18.168 | 1.412 | 113.0 | 130.384 | 216.53 | 321.831 | 1.004.04% | 41.30% EPS | $36.0 | 230.59x | 51.3 | 559.


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