Ryanair: Objectives And Risks Essay

3256 words - 13 pages

1.0 Introduction1.1 About the CompanyRyanair operates a low-fares scheduled passenger airline serving short-haul, point-to-point routes in Europe. It's been in operation since 1985 and pioneered the low fares operation model by the 1990s. According to statistics obtained from the company's website, its Europe's biggest low fares airline, the most successful and dynamic as well as the number one in customer service. This is evidence in the fact that it has consistently achieved a compound annual growth of 20% since 1991 with a current market capitalisation of 5bn, ahead of British Airways ( 4.3bn), Lufthansa ( 4.7bn) and Air France/KLM ( 3.5bn), and with statistics in customer service of 93.2% on time departures, 0.64% of bags missing per 1000 passengers and 99.8% on flight completions.Ryanair Provides flights across 21 European countries with operations in 107 airports throughout Europe, including 24 locations in the U.K. and Ireland. By the end of March 2006, it will operate a fleet of 107 new Boeing 737-800 aircrafts with orders for a further 70 new Boeing 737-800. Currently, Ryanair carries over 35m passengers cross 21 European countries and over 267 low fare routes at the lowest price. Current employment stands at 3,000 comprising of over 25 different nationalities.The company recently announced a recorded half year profit figure (year 2006) of 237million with a traffic growth of 29% to 18million passengers. Its current market performance is illustrated in the table below;Summary Table of Results (IFRS) - in EuroHalf Year Ended Sept 30, 2004 Sept 30,2005 % IncreasePassengers 14.0m 18.0m 29%Revenue 710.3m 946.2m 33%Profit after Tax (note 1) 201.2m 237.0m 18%Basic EPS (Euro Cents) (note1) 26.49 31.00 17%Note 1: Adjusted profit after tax and EPS during the half year ended 30 September 2005 excludes a receipt, net of tax, of 5.2m arising from the settlement of an insurance claim for the scribing of 6 Boeing 737-200 aircraft.http://www.ryanair.com/site/EN/news.php?yr=05&month=nov&story=reg-en-0711051.2 ObjectivesRyanair, since entering new routes in 1991 has experienced tremendous increase in its passenger figures; from 1.7million to approximately 4.6 million passengers in 2004. Although a variety of factors contributed to this increase, management believes that it was precipitated by its low fares policy and its good customer service statistics of fewer delays, fewer lost bags and better on-time flight punctuality. As a result, its principle objective has been to firmly establish itself as Europe's leading low-fares scheduled passenger airline through continuous improvement and expanding of offerings of its low-fares service. They aim to generate increased passenger traffic while at the same time containing cost and operating inefficiencies. Its main focus, however, is on increasing shareholder value and promoting growth.The company's low fares are designed to stimulate demand especially in a society in which people are so concerned about...

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