easyjet vs ryanair financial analysis
Its high seat density arrangements on board allow optimum use of aircrafts. The first operating aircraft was a 15-seater Bandeirante that carried 5000 passengers in its first year of operations. EasyJet being a British airline company is performing within the political framework of Europe. Porters 5 forces analysis of Ryanair Threat of new entrants In the European aviation industry new entrants face the disadvantage of limited airport slots as these are mainly accessible to established airlines like Ryanair. 249264. (2023) 'Ryanair Corporate Strategy Vs. easyJet: Competitive Strategy Analysis (Compare & Contrast Essay)'. Increased incomes make people quality, customer service and comfort conscious during flights. Correct writing styles (it is advised to use correct citations) EASYJET 40, loc. While EasyJets net worth has consistently witnessed growth, albeit as a percentage of total assets, the net worth of Ryanair has in fact shrunk percentage wise from year 2010 to year 2012. Ryanairs net worth as a percentage of total assets for years 2010, 2011 and 2012 has been 38%, 34% and 37% respectively. 2023. 8 Pages. Ryanairs inaugural flight had its daily route from Waterford in Ireland to London Gatwick. Financial Analysis In case of EasyJet, the Gross Income ratio has improved from 0. But EasyJet does not compromise on airport facilities and uses the expensive services of primary airports. EasyJet is a British airline company whose headquarter is based at Londons Luton Airport. The company brands itself as Europes only ultra low-cost airliner because it is the regions largest low-cost airline company (Mayer 2008). Other segments of its working model appear below. 1 phyneas 2 yr. ago Haven't flown Easyjet, but Ryanair is fine as long as you read the rules and know what you're getting and what you aren't. It is a key matter for EasyJet. 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). In case of potential new entrant in the low fare segment, the strategy adopted by EasyJet and Ryanair thwarts competitions and renders entry of new companies financially unviable. With rising employment, the purchasing power of people also improves. Labor Costs: Ryanair has the lowest labor costs in the industry (6 per passenger vs 9 and 17 for competitors EasyJet and AirBerlin [5]). Based on these competencies, Ryanair has always argued that its success does not only depend on its low-cost strategy because its innovative on-time record and its value-added services also support its growth (OConnell & Williams 2012). In the year 2010 there was a reduction in the costs of fuel from Euro 1,257 million o Euro 893. Alternative modes of transport do not form a threat to low fare airlines like EasyJet and Ryanair for distance more than 400 km. must. This motivates the employees towards efficient contribution to EasyJets strategic objectives (EasyJet: Annual reports & accounts 2011, p. 35). If this happens then demand will fall which will add to the cost. 1, pp. 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). Over the last four quarters, easyJet's revenue has decreased by 48.8%. Ryanair has also used the same strategy to meet the same goals (Mayer 2008). (2023, February 18). For example, Easyjet has maximised its productivity by operating in airports where it enjoys market leadership (CAPA 2014). easyJet is slightly smaller than Ryanair but also packs a punch in the low-cost market. Catering to a slightly different market, the carrier was founded in March 1995. This makes the airline 24 years old. easyJet operates aircraft from the A320 family, with an average fleet age of around seven years. EasyJet keeps its focus on environmental awareness programs while making any future strategies. (2006), the relative success, or failure, of low-cost airlines lies in two factors cost leadership and differentiation. However, easyJet, in a financial report, says that 99.8% of flights are operated regardless. Web. Complementing its direct sales strategy is the paperless booking model. Thats almost 10 pp better than the EMA average and 11.7 pp better than the global average. cite it correctly. As such EasyJet has the advantage of providing low fare which will be difficult for new entrants to offer, and also EasyJet has a goodwill attached to its name which is something a new entrant will take years to replicate. Ryanair The sustained current global economic recession has had an adverse impact on many airlines including Ryanair because high unemployment rates and rising fuel costs almost led to bankruptcy. This essay was written by a fellow student. Comparative analysis based on Porters 5 forces analysis New entrants in the aviation industry will be less threatening for well entrenched and already established low fare airlines like EasyJet and Ryanair because the new airlines will have low capital base and limited airport slots. Easyjet flies to Charles de Gaulle Airport and Orly Airport (two main airports in the city) (Thompson 2005). At this stage it is noteworthy that the total revenues for EasyJet have consistently grown year upon year by 16% and 30% over 2010 base year. 3 millions. Both the airlines use frequent-flyer program which is an added advantage over any new entrants. 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. Higher the ratio means higher the perceived value of the company and vice versa. 24 from 2010 to 2012. However, for distance less than 400 km bus service, railways and automobiles can act as substitutes and alternative modes of travel. Ryanair also focuses on faster pre-flight preparation; this minimizes the grounded time of aircraft (Hoffman, 2007, p. 6). When Approaching A Railroad Crossing You Should Quizlet,
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easyjet vs ryanair financial analysis