Ryanair: European Pioneer of Budget Airline Travel
Ryanair: 12 June 2011
European Pioneer of Budget Airline Travel
Case Study: Read Case Study 6 in text (pp. 482-503). Prepare answers to the following questions and post them to BlackBoard by clicking on the title of this assignment. You can either type your responses directly or attached a Word document. The responses should include the title of the case, student name and e-mail address. Be sure to cite any sources used outside of the text or lecture material.
1. Carefully analyze Ryanair’s financial performance. Select two line items from the profit statement, two from the balance sheet, and two from the operating statistics and explain the relationship between these items and Ryanair’s business strategy.
Profit Statement:
1. Route Charges – Ryanair’s route charges actually increased in 2006 as they ventured further into new EU markets such as Poland, Hungary, and Slovakia in addition to other former EU countries such as Marrakech in Morocco (Central Michigan University, 2010). Because their overall passenger numbers increased, this related into an overall decrease in operating expenses for this category. This falls in line with Ryanair’s desire to be the largest “low-cost, no frills” airline in Europe. Ryanair continues to expand its operations throughout the EU. This expansion comes with increased cost, but an overall lower percentage of cost because of the increase in passengers carried and thus increased revenue.
2. Airport & Handling charges – Ryanair, in its quest for low costs, chose to service airports outside of the major city hubs because the airport service fees are lower at these airports. They are also less congested and this helps Ryanair meet its take-off times more reliably, thus providing better overall customer satisfaction and value. Ryanair also continues with “point-to-point” only routing which also reduces
European Pioneer of Budget Airline Travel
Case Study: Read Case Study 6 in text (pp. 482-503). Prepare answers to the following questions and post them to BlackBoard by clicking on the title of this assignment. You can either type your responses directly or attached a Word document. The responses should include the title of the case, student name and e-mail address. Be sure to cite any sources used outside of the text or lecture material.
1. Carefully analyze Ryanair’s financial performance. Select two line items from the profit statement, two from the balance sheet, and two from the operating statistics and explain the relationship between these items and Ryanair’s business strategy.
Profit Statement:
1. Route Charges – Ryanair’s route charges actually increased in 2006 as they ventured further into new EU markets such as Poland, Hungary, and Slovakia in addition to other former EU countries such as Marrakech in Morocco (Central Michigan University, 2010). Because their overall passenger numbers increased, this related into an overall decrease in operating expenses for this category. This falls in line with Ryanair’s desire to be the largest “low-cost, no frills” airline in Europe. Ryanair continues to expand its operations throughout the EU. This expansion comes with increased cost, but an overall lower percentage of cost because of the increase in passengers carried and thus increased revenue.
2. Airport & Handling charges – Ryanair, in its quest for low costs, chose to service airports outside of the major city hubs because the airport service fees are lower at these airports. They are also less congested and this helps Ryanair meet its take-off times more reliably, thus providing better overall customer satisfaction and value. Ryanair also continues with “point-to-point” only routing which also reduces
Cited: Central Michigan University. (2010). Strategic Planning for the Administrator. Boston: McGraw Hill.