Date post: | 23-Jan-2018 |
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Baggio Michela 876690Beretta Marco 878482Cacciani M. Francesca 874906Cirillo Giuseppe 878042Cheli Filippo 876241
INDEX
Company’s business model
Ryanair’s financial analysis
Balance scorecard
Overview
569.3522.8
866.7
0
100
200
300
400
500
600
700
800
900
1000
2013 2014 2015
Net profit [Mln€]
OVERVIEW
>1800 FLIGHTS PER DAY
HOW IS THIS
POSSIBLE ?
AVERAGE PRICE: 47€
BUSINESS MODEL
NOFRILLS
LOW FARES
SECONDARY AIRPORTS
PROFITABILITY
LOW COSTS
11% 10%12%
18%21.20%
25%
11%
15% 14%
2013 2014 2015
Rayanair EasyJet British Airways
ROI
Positive increase, but less thanour competitors becauseRyanair is investing a lot toenlarge both its fleet and itsroutes.
An example is the order of 180new B737-800 NG Boeings.
FINANCIAL ANALYSIS
LOW COSTS
PROFITABILITY
LOW FARES
SECONDARY AIRPORTS
LOW FARES
13%
24%
16.30%
0%
5%
10%
15%
20%
25%
30%
cost
Rayanair EasyJet British Airways
PROFITABILITY
SECONDARY AIRPORTS
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
18.0%
21.0%
2013 2014 2015
Rayanair EasyJet British Airways
FINANCIAL ANALYSIS
ROS"Airport and handling charges"
costs over revenues
LOW COSTS
PROFITABILITY
LOW FARES
SECONDARY AIRPORTS
LOW FARES
PROFITABILITY
FINANCIAL ANALYSIS
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
0 1 2 3 4 5 6 7D/E
Co
st o
f d
ebt
201520142013
LOW COSTS
PROFITABILITY
LOW FARES
SECONDARY AIRPORTS
LOW FARES
PROFITABILITY
FINANCIAL ANALYSIS
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
0 1 2 3 4 5 6 7D/E
Co
st o
f d
ebt
201520142013
LOW COSTS
PROFITABILITY
LOW FARES
SECONDARY AIRPORTS
LOW FARES
PROFITABILITY
FINANCIAL ANALYSIS
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
0 1 2 3 4 5 6 7D/E
Co
st o
f d
ebt
201520142013
LOW COSTS
PROFITABILITY
LOW FARES
SECONDARY AIRPORTS
LOW FARES
PROFITABILITY
FINANCIAL ANALYSIS
1.97
1.51
1.72
1.05
0.89
0.72
0.63
0.65
0.6
2013
2014
2015
British Airways EasyJet Ryanair
Liquidity analysis (Current ratio)
SALES GROWTH RATE
Significant index of company’s expansion, that shows the increase inrevenues.
Sales growth rate = ∆ 𝑺𝒂𝒍𝒆𝒔 [𝒕− 𝒕−𝟏 ]
𝑺𝒂𝒍𝒆𝒔 (𝒕−𝟏)
ADJUSTED PRICEThis indicator highlights the difference between Ryanair’s medium price and the market’s one.
Adjusted price =𝒓𝒚𝒂𝒏𝒂𝒊𝒓′𝒔 𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒓𝒊𝒄𝒆
𝒍𝒐𝒘 𝒄𝒐𝒔𝒕 𝒎𝒂𝒓𝒌𝒆𝒕′𝒔 𝒂𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒓𝒊𝒄𝒆
% SATISFIED CUSTOMERSA digital survey via phone application provides customers’ opinions on Ryanair’s service.
% Satisfied customers = # 𝒄𝒖𝒔𝒕𝒐𝒎𝒆𝒓 𝒓𝒂𝒕𝒊𝒏𝒈 ≥𝟒
# 𝒊𝒏𝒕𝒆𝒓𝒗𝒊𝒆𝒘𝒆𝒅 𝒄𝒖𝒔𝒕𝒐𝒎𝒆𝒓𝒔
BALANCE SCORECARD
LOAD FACTORImportant leverage in cost reduction strategy. Saturating airplanes helpssplitting fixed costs. New purchased airplanes provide more seats, but if wellmanaged they will bring more revenues.
Load factor = 𝑻𝒐𝒕𝒂𝒍 𝒆𝒇𝒇𝒆𝒄𝒕𝒊𝒗𝒆 𝒑𝒂𝒔𝒔𝒆𝒏𝒈𝒆𝒓𝒔
𝑻𝒐𝒕𝒂𝒍 𝒑𝒐𝒕𝒆𝒏𝒕𝒊𝒂𝒍 𝒑𝒂𝒔𝒔𝒆𝒏𝒈𝒆𝒓𝒔
AIRPORT IMPACT
This index shows the increase in ancillary revenues from secondary airportwhich properly highlights how Ryanair exploits secondary airports toincrease its prosperity.
Airport impact = 𝑨𝒏𝒄.𝒓𝒆𝒗 𝒇𝒓𝒐𝒎 𝒔𝒆𝒄𝒐𝒏𝒅𝒂𝒓𝒚 𝒂𝒊𝒓.
𝑨𝒏𝒄𝒊𝒍𝒍𝒂𝒓𝒚 𝒓𝒆𝒗𝒆𝒏𝒖𝒆𝒔
FUEL REDUCTIONNew airplanes bring a reduction in fuel cost due to improvements in theirstructure.
Fuel reduction= 𝑻𝒐𝒕𝒂𝒍 𝒇𝒖𝒆𝒍 𝒄𝒐𝒏𝒔𝒖𝒎𝒑𝒕𝒊𝒐𝒏 [€]
𝑻𝒐𝒕𝒂𝒍 𝒌𝒎 [𝒌𝒎]
BALANCE SCORECARDBALANCE SCORECARD
CONCLUSIONS
NO FRILLS is the
answer to Ryanair’s
success…
…and the reason why
you never fit in the
seats.
THANKS FOR YOUR
ATTENTION