easyjet vs ryanair financial analysis

Even with these adjustments, the company has still increased its passenger numbers and remained profitable for a long time. This restructuring affirmed the views of Mennen (2005) who said a corporate strategy should have more value as a holistic entity as opposed to the sum of its parts. This makes EasyJet second best low fare airline in Europe after Ryanair. The database is updated daily, so anyone can easily find a relevant essay example. The commitment and dedication towards work that stimulates the employees of EasyJet kept its workforce going and provide uninterrupted world class service. Ryanair has had no air accidents with casualties till date. Threat of substitutes This force is not much applicable to aviation industry especially if the airline is a low fare one like EasyJet. report, Comparative Financial Analysis of Easyjet & Ryanair. If the oil price increases then it will be difficult for EasyJet to maintain its policy of providing air services at low costs. "Ryanair Corporate Strategy Vs. easyJet: Competitive Strategy Analysis (Compare & Contrast Essay)." Competitive rivalry Air fare is the driving factor for competitive rivalry in aviation industry. Because of its brand name, Ryanair also acts as barrier for new entrants in the European aviation industry. Technological innovations like videoconferencing is actually another form of substitute since it enables business people to do meetings online thereby flights become unnecessary for face-to-face meetings. Comparative analysis based on PESTEL Ryanair and EasyJet both being the top European low fare airlines face some common advantages and disadvantages. This fact shows that this market has limitations that would ordinarily curtail the growth of companies that do not adopt an elaborate strategy. From where the investors sit, Lisa and Mark might reject the project. For a long time, Easyjet has branded itself as a committed airline that strives to optimise customer experience, always. Given the above background, this report will attempt to analyze the two companies i. e. , Ryanair and EasyJet viz. The pervasive risk of terrorism means airlines like EasyJet have to emphasize on strict security measures which will warrant higher costs. Increasing oil prices can have severe impact especially on a low fare airline like Ryanair, and to off-set this they use high density seating arrangements on board; that way fuel price per passenger is reduced. An incident like air accident can lead the customers to rethink about the compromises adopted in aircraft maintenance. The report contains an introduction to the business models of the airlines, their business strategies, SWOT analysis, analysis of porters five forces, financial analysis For more visit Lions Lions Financial Neil Sorahan Directeur financier de Ryanair 2014.10 - aujourd'hui Wizz Air et EasyJet, RyanAir dessert prs de 4 fois le nombre de passagers que chacun de ces concurrents. Ryanair is projecting a strong summer; it has capacity on sale at 114% of is an Irish airline company. These destinations spread across 29 different countries in the region. 76%. This affirmation aligns with the goal of Ryanair, which is to firmly set up itself as Europes leading low-fare scheduled passenger airline through continuous improvements and expanded offerings of its low-fares service (Freire 2014, p. 4). Compared to other leading airlines in the short-haul market segment, the two airlines are among the top ten aviation companies with the highest passenger numbers in Europe. Environment Airline services can be drastically disrupted by natural calamities, for instance the 2010 Eyjafjalla volcanic eruption in Iceland disrupted European air space for several days. To meet the demand, management focuses on maintaining enough flights every day. writing your own paper, but remember to It has destinations in many principal cities across Europe. CAPA 2014, EasyJet: more aircraft come in as more cash to shareholders goes out. Figure Two: Ryanair and Easyjet market share (Source: Air France 2011). Stringent laws regarding safety and air traffic rights put financial pressure on low-fare airlines like EasyJet. In doing so, a company tends to improve its earnings per share (EPS). 0 millions to Euro 2,988. Moreover, pandemics like swine flu can adversely affect flight demands. Of importance, experts say the European low-cost airline sector is more brutal for low-cost airline companies than the American market because both markets have different structures (CAPA 2014). 13 to 0. Ryanair has evolved from a family owned business into one of the most successful regional brands in the market. In actual numbers the costs remained constant at GBP 103 m, also due to the new policy of This paper attempts to financially analyze and compare the two airlines. Ryanairs inaugural flight had its daily route from Waterford in Ireland to London Gatwick. 500 WebThe gross margin of EasyJet is 8.00%, and 7.80%, while that of Ryanair is 11.16%, and 11.52%, for years 2017 and 2018 respectively. The overall management of both these airlines has been good and so much so that these have emerged to be the two top low fare airlines in the European market in spite of all competitions, adverse economic conditions and environmental adversities. WebeasyJet is currently c.55% hedged for fuel in the financial year ending on 30 September 2022 at c.US$498 per metric tonne with the spot price as at 29 November 2021 being US$658. As it is using point-to-point the, time to go to destination is reduced. It provides a common size comparison between different organizations with regard to their respective individual performances. Low fare airlines have the problem of working with primary airports because of the expensive aerobridges and elaborate check-in-services of these airports. Registration number: 7252303643 This means EasyJet is in a far better position to borrow as compared to Ryanair and its (EasyJets) ability to meet all interest expense is better than Ryanair. Since the factors cannot be influenced by a business enterprise, so it is upon the business to adapt itself to the factors. 3 billion in the year 2012. 24 from 2010 to 2012. 1. https://www.easyjet.com. for only $11.00 $9.35/page. Copyright 2023 - IvyPanda is operated by, Ryanair Corporate Strategy Vs. easyJet: Competitive Strategy Analysis (Compare & Contrast Essay), EasyJet: more aircraft come in as more cash to shareholders goes out, Alliance Supermarket' Point-of-Sale System, Caterpillar Company Analysis Using Porters 5 Forces Model, An Investment Analysis of EasyJet on Behalf of a Pension Fund, EasyJet Company: Strategic Management and Business Policy, Operations and Process Management of EasyJet, Ryanair and easyJet Competitive Positions, Ryanair and easyJet Value for Shareholders, Macbeth & Frankenstein: Compare & Contrast, Nationalism Versus Capitalism: Compare & Contrast, Organisational Design and Performance Management. Ryanairs net worth as a percentage of total assets for years 2010, 2011 and 2012 has been 38%, 34% and 37% respectively. Since Ryanair provides services at low costs, its demand is very high. The proceeds of this transaction will go towards the 500-650m ($616-802m) target that easyJet drafted in May. EasyJet promotes itself as no-frills airline (Sorenson, 2005, p. 84). This can be an important factor for Ryanair as aircrafts cannot be substituted. Ryanair focuses on updating aircrafts since modernized fleets require less maintenance cost. PESTEL analysis helps to assess the prospects of expansion and the risks involved. Easyjet flies to Charles de Gaulle Airport and Orly Airport (two main airports in the city) (Thompson 2005). cite it correctly. The constant threat of a Middle East (Iran) war can adversely affect the oil price. 4 Easyjet non-current assets 2022 Nonetheless, Ryanair commands a stronger market share than Easyjet does. student. The net worth as a percentage of total assets for the years 2010, 2011 and 2012 have been 37. Furthermore, since the airline uses paperless booking, customers can easily buy their tickets and walk to the security gate without enduring any other sign-in rules. Complementing its direct sales strategy is the paperless booking model. These strategies although have helped them in keeping the costs low, but they certainly are a cause of inconvenience to the discerning customers. Similar to other low-cost carriers, the airline also had no in-flight meals and a rapid turnaround. However, easyJet, in a financial report, says that 99.8% of flights are operated regardless. Get original paper in 3 hours and nail the task. This kind of differentiation has created an advantage over competitors. easyJet (1995) is a low-cost airline carrier operating only in Europe. Ryanair is alert to any technological development and strives to embrace new processes to enhance service efficiency. 3.10 Peer Ryanair. This view affirms the opinions of researchers who say price leadership is pivotal to creating market dominance, compared to cost leadership advantages (Mayer 2008). The one weakness of Ryanair that is quite apparent in its no-frills approach by which they do not serve any free refreshments to customers on flight. According to Dobruszkes (2006), the relative success, or failure, of low-cost airlines lies in two factors cost leadership and differentiation. EasyJet cabin staff in Portugal plan early April strike over pay : More Must read. Comparatively between the two airlines, Ryanair has outperformed EasyJet in the given period between 2010 2012 in terms of Gross Income as a percentage of Total Revenue This indicates that Ryanair is more efficient in terms of cost control and earnings margin. Therefore, the takeoff costs, additional customer expenses, and meal costs as reduced. 12 to 0. Ryanair mainly flies to secondary airports, while Easyjet flies to primary airports. The company brands itself as Europes only ultra low-cost airliner because it is the regions largest low-cost airline company (Mayer 2008). | April 27, 2023 Focus on low-fare operations was initiated in the early 1990s by a new team of directors in the board. Ryanair also emphasizes on providing the most efficient customer service compared to other rival airlines. However, in spite of all the givings and primarily the shortcomings compared to the legacy full service/full fare airlines, the low fare airlines has transformed the way people travelled. Although Easyjet borrowed its strategic focus from Southwest Airline, its market strategy differed from Southwest because instead of relying on sales agents to make sales, the Airline relies on a direct sales strategy (Sull 1999).

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