Financial Comparison of Air France, Ryan Air and American Airlines
I decided to write the first experiential exercise about three airline companies. I chose Air France, what is the most famous airline company in Europe, a big US company American Airlines, and finally big low-cost airline in Europe, called Ryanair.
First of all, I would like to give a short introduction about all the three companies, what are their main advantages comparing to other airlines, because all of them are market leader in their own sector. After I make the calculation, and draw a conclusion, which company is performing better, which one is more attractive to investors.
Air France
Air France is a subsidiary of Air France-KLM Group. It operates worldwide scheduled passenger and cargo services to 185 destinations in 83 countries. On September 30, 2003, Air France and KLM Royal Dutch Airlines, has announced the merger of the two airlines, the new company to be known as Air France-KLM.
The main advantages of Air France- KLM are the followings:
• Passenger transportation - biggest European airline with 25.5% of market share and largest airline in the world in terms of operating revenue.
• Freight transport is the largest company for international freight transportation without integration.
• Airplane maintenance and repair is the largest multi-services operator
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(table from annual report Air France- KLM)
The net income for the year 2007 was €767 and the sales of the company were €24,114.
The Percentage of Sales = $767/24,114 = 0, 0318 ≈ 3,18 %
(All data in million Euros)
Return on Capital Employed = EBIT / (TA-CL) = 1149/ (30690- 9191) = 0,0534
Total Return to Shareholders = (∆ price of the share from the first day to the last + all dividends)/ price of the share
Total Return to Shareholders= {(33.07- 17.01)+0.96 }/33.07 = 0,53
Ryanair
Ryanair has grown from 3 million passengers to over 50 million passengers per annum. From an airline which operated just 19 routes in 1997, in year 2007 Ryanair operated over 550 routes from 22 base airports across the length and breadth of Europe. The employee numbers have quadrupled to over 4,500 today. Most importantly the average passenger fare has fallen from €57 in 1997 to just €44 today. (Ryanair)
Moreover the company provides a frequent point-to-point service which allows them to avoid costs of services for connecting passengers, costs of baggage transfer and costs of transit passenger assistance.
The objective of this research report is to provide a thorough analysis of Alaska Airlines. In order to do this we chose to compare a similar company against them. The company in comparison is Spirit Airlines. Both companies compete in the same type of business through airline transportation. Many of their services include; security, safety, transportation of passengers as well as luggage, ensuring vehicle safety while in transit, concierge services, providing entertainment aboard plane, checking weather conditions prior to flight, and much more. All of the data gathered for this report was obtained from the company’s 10-k filings with the SEC.
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
The two airlines have minimal similarities; each is successful at what they do and are no-frills
For the year 2010, the return on sales was .0892. That number is calculated by dividing the net earnings by the total sales. 2010 Return on Sales = $1,069,326 / $11,991,558 and 2011 Return on Sales = $891,082 / $11,850,460.
When analyzing Delta, you do not have to search very far before quite possibly one its strongest attribute rears its head. Based on calendar 2000 data, Delta is the largest U.S. airline in terms of aircraft departures and passengers enplaned, and third largest as measured by operating revenues and revenue passenger miles flown. Delta is the leading U.S. airline in the transatlantic, offering the most daily flight departures, serving the largest number of nonstop markets and carrying more passengers than any other U.S. airline. Delta Air Lines transports more passengers worldwide than any other airline.
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Ryanair an Irish airline founded in 1985 has seen huge growth with workforce of just 25 to now over 9000 skilled professionals, branding themselves as Europe’s only ultra-low cost airline they are always looking for new ways too save on costs and increase on profits. This essay will draw upon, at what point they become ‘un-ethical’ i.e. the extra charges they add to the total bill e.g. a £160 charge for a name change in high season (Ryanair.com 2014,a), They have even been accused of carrying less emergency fuel to improve both fuel efficiency and competiveness (The Economist, 2013). Then justify what is morally right and wrong from the views of different ethical theories and stakeholders, in particular egoism and utilitarianism because these two theories will exhibit totally different views. Which will show different perspectives of a single action can be both ethical and un-ethical at the same time depending how you look at it.
a. The adage of the adage of the adage of the adage of the Marketing low-cost airline services to business travellers. Journal of Air Transport Management, 7(2): 103-109.
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The International Air Transport Association (IATA). 2014. Airline Cost Performance. IATA Economics Briefing. [report] IATA, p. 31.