Growth in the European market is a key factor that you should prioritise in your analysis.
You will also need to keep an eye on the company's creation of new bases within the European Union, as well as the introduction of new routes.
The Ryanair group is also trying to expand in the business class market, and stocks in this area should be taken into consideration.
It will also be important to study the growing competition in this sector, and in particular the market share of its direct competitors in the low-cost sector, such as EasyJet and Vueling, which are increasingly present in the market.
Finally, it will also be important to keep an eye on the legislation in force in the countries in which Ryanair operates, mainly outside the European Union. This legislation can sometimes restrict the group's profits by having a direct impact on its market strategy.
Any good trader who wants to invest in a stock should not choose a stock at random. It is necessary to study the company that issues the stock to ensure that you understand its future growth capabilities. For example, a good knowledge of Ryanair is essential if you want to invest in its stock and you need to know the different areas of activity and sources of profit. Here is a detailed presentation of the company.
Ryanair Holdings Plc is an Irish company that operates in the field of air transport. More specifically, this company is an airline that specialises in low-cost flights throughout Europe.
In order to better understand the activities of this company Ryanair, it is possible to divide them into different poles according to the share of turnover that they generate and in this way:
At present, the Ryanair group owns and operates a fleet of 451 aircraft.
It is also interesting to know how Ryanair's revenues are distributed geographically. It is known that the group generates 5% of its turnover in Ireland, 15.3% in the UK, 23.1% in Italy, 19.3% in Spain and 37.3% in the rest of Europe.
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Knowing the economic environment in which the group operates is of course essential before buying RyanAir shares or selling them on the stock market. We therefore propose to find out who the company's main competitors are in its sector of activity:
This British low-cost airline is currently one of the largest in Europe in terms of passenger numbers and is positioned just after Ryanair. The company is called EasyJet Airline Company PLC and is partly owned by Stelios Haji Ioannou through his shareholding in Easygroup, a company registered in Jersey. The group currently employs over 10,000 people and was established in 1995 with a £5 million loan from a Cypriot shipowner. The company is listed on the London Stock Exchange and is a member of the FTSE 100 index. It is headquartered at London Luton Airport and operates over 1,015 routes and serves 156 airports in 34 countries worldwide. Its fleet consists of 318 aircraft.
This other German airline also specialises in low-cost flights, which it operates through its subsidiary Lufthansa. The company has been in existence since 2002 and its main hub is located at Cologne/Bonn airport.
We will also follow the competition from the Transavia Airlines Group, formerly known as Transavia.com which is a Dutch low-cost airline and a subsidiary of KLM. This company is therefore part of the Air-France KLM alliance. The company's main base is at Amsterdam-Schipol airport and Transavia also has bases in Rotterdam and Heindoven airport.
This Norwegian company and low-cost airline is based in Oslo, Norway, and has become the third largest airline in this sector in Europe. Since 2013, the company has also been offering long-haul operations on the transatlantic market.
Finally, Air-France and more generally the Air-France KLM group is a Franco-Dutch alliance which groups together several airlines and subsidiaries including a French low-cost subsidiary. The group is organised around a holding company in which the French and Dutch governments are majority shareholders. In its air transport activities, the group operates the subsidiary Air France Hop, which is in direct competition with Ryanair.
In 2014, Ryanair joined PayPal, which now offers to customers of the low-cost airline the option of paying for their airline tickets online by using their PayPal account.
Ryanair was also a favorite partner of the rental car company Hertz for more than 20 years, but this partnership ended in 2016.
In 2017, Ryanair announced a partnership with its competitor Norwegian in order to feed its transatlantic flights through Ryanair’s medium and short haul flights towards the airports where its aircrafts departures take place.
That same year, Ryanair also signed a partnership with the group Air Europa to offer long haul flights departing from Madrid towards around twenty different destinations, on its website. The establishment of a correspondence between the two companies is expected to take place in 2018.
The Ryanair Group notably distinguishes itself from its competitors in this activity sector by its high quality customer service and positive relationship with consumers. Due to this strategy the company benefits from a highly regarded brand image and can therefore attract numerous travellers searching for low cost flights that still offer good quality service.
The shareholders and stock market investors also appreciate the superior financial profits of this share price from a financial and stock market point of view. The profits from this asset regularly display significant growth increases and particularly over short term periods.
Another strategy implemented by the Ryanair Group to maintain its profitability and market share is called Yield Management and consists of a wide price flexibility. The company can thereby attract clients from different consumer sectors without losing on its margins.
Ryanair has also shown no hesitation in investing significantly in the purchase of new airplanes aimed at increasing its range of air routes and thereby accelerating its growth over the coming years. For example it recently ordered 100 Boeing 737 Max airplanes which will be introduced into its air fleet from 2019 with beneficial traffic growth prospects expected from 2024.
Finally the Ryanair Group is also a group that has heavily invested in its innovations to hold its position on the market. It has notably developed management strategies for its short haul flights. The group is also the originator of the low cost flights sector in Europe.
Firstly, we know that the company recently, and at several times, has been accused of sub-standard social policies. Of course, these different scandals which were widely noted by the media were in many instances related to the work conditions of its onboard personnel and negatively affected the brand image of this company which had a harmful influence on its sales.
Although the Ryanair company has been successfully internationalised it still remains strongly dependent on the British and Irish markets. This of course represents a major risk for its future profitability and could present certain problems in the case of an economic crisis in one of these countries.
Finally, the last negative point that we can cite here relates to the strong seasonal aspects of the Ryanair company’s activities which depend greatly on tourist popularity. The group therefore relies on major profits in the summertime rather than all year round.
There are a few important figures to know about Ryanair that can help you understand and analyse this value. We know that the fleet of this low cost airline currently consists of 370 aircraft. The number of destinations served by the company is 225. Finally, the Ryanair group currently employs nearly 17,500 people across the world.
It was in 1985 that the airline Ryanair was founded in Dublin by an Irish businessman named Thomas Anthony. The nickname of its creator, 'Tony Ryan' gave the name to the company. The creation of the group was made in collaboration with the owner of the tour operator Club Travel, Liam Lonergan and with a starting capital of 1.30 € and only 25 employees. At that time, Ryanair only offered one airline between Dublin and London Airport.
As is the case for all global companies, the Ryanair group publishes its financial reports on an annual and quarterly basis. The results for the annual financial year are generally published at the start of the following year and several revised results and interim targets are also made public throughout the year, i.e. quarterly.
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