Ryanair Industry Analysis

Vega, D., Pamplona D., & Oliviera A. (n.d.). Assessing the influence of the scale of operations on maintenance costs in the airline industry. Retrieved last February 25, 2015 from http://sitraer2014.pcs.usp.br/wp-content/uploads/Apresentacoes/19-11- 2014/Session5/04-Daniel-Alberto-Pamplona.pdf

of $294 million. Assume that the jets fly, on average, three legs per day at 60% capacity (the aircraft seats

Commercial airlines and other air transport operators form the bulk of the customers. Governments are also important customers. The government involvement in the sector extends to investing, supporting (Aboulafia, Richard, 2000; O’Neal, Michael, 1990) and regulating. Any problems in the industry have implications that go well beyond the confines of the affected companies. Governments therefore subsidize and invest in aircraft manufacturing and research and development. This also serves to protect the highly skilled jobs in this sector and ensures that the respective countries remain technologically competitive (Wall, R. & Sparaco, P, 2007).

Fuel has consistently been one of the largest expense categories for domestic airlines, ranking second only to personnel expenses. During 2003, fuel costs represented, on average, over 16% of the total operating expenses for all U.S. domestic airlines studied by Richard Cobbs and Alex Wolf (2004). Moreover, airlines are generally unable to increase fares to offset any significant increase in fuel costs. From 2001 to 2003, these same airlines experienced a 25.9% compound annual increase in jet fuel costs while average airline pricing decreased by 0.1%, as measured by revenue per available seat mile (Cobbs and Wolf, 2004). Jet fuel costs have substantially risen over the past several years putting consistent pressure on airlines to maintain positive cash flows. Any saving in fuel costs works out to profit earned.

Spirit Airlines has 65 Airbus planes in their fleet the average age for the fleet is 5.1 years, accordingly maintenance costs have been lower than expected in the past and most likely Spirit Airlines will continue to

This economic issues report will outline how the Australian aviation sector influences both the Australian economy and the tourism industry. The report will also highlight how the economic issues of employment, fuel consumption and environmental challenges affect the Australian aviation sector and how these issues relate to the economic principles of supply and demand. The report will briefly explain the background of the Australian aviation sector; identify economic market trends and current opportunities as well as highlight the potential challenges and issues within the sector, relating them to the economic principles and finally discuss recommendations for application to the outlined economic issues.

At the end of 2014, the aircrafts in possess are 109 Boeing 737 NG, and 19 Bombardier Q400, which are all short and medium-range narrow-bodied airliners. We assume that majority of WestJet customers are travelling for leisure, and the determinant of which airline to choose is the price.

Airlines must operate within a low-margin, high-fixed-cost environment, making profitability particularly sensitive to decreases in volume, either from environmental factors (e.g., the September 11,2001 attacks) or from competition. Moreover, the airline business is labor-intensive. Labor costs as a percentage of revenues ranges from a low of about 25 percent for the low-fare airlines to almost 50

Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and

II - F. WestJet buys 12 used airplanes from Air Canada for $1,000 each. Six of the airplanes can fly and carry passengers. The other six airplanes will be used for parts to repair the first six airplanes as necessary.

The Airline industry has experienced continual problems with rising costs with both fuel and maintenance which has caused them to increase their fees to the consumers to pay for those rising costs. This paper will help explain what an airline such as Delta does to help alleviate such costs without forcing its consumers to flip the bill through high fees that consist of tickets, baggage fees and food. The costs of doing business in aviation today have spiraled out of control making it very expensive for both airlines and the

In the last ten years, airline industries have suffered due to the horrible economic recession and unsustainable fuel prices, which is the major threat to the airline industry. The airline industry heavily relies on fuel prices; therefore, high priced fuel scares existing airline industries and threatens their top management’s decision to reduce operating expenses including wages, material costs, customer satisfaction costs, and sales

The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand

In order to sustain among other competitors, Ryanair Holding should evaluate their strategy which is low cost business level strategy in the long run. This strategy alone is not a basis for competitive advantages, nor are advantages sustainable over time. This is because it can only be regard in helps Ryanair to increase its revenues or to lower costs. The firms also derive a temporary advantage because competitors quickly imitate or substitute for it as things that an organization own. Since economy is further growing, Ryanair faces a lot of challenges in maintaining their revenue growth while keeping ticket prices low. Thus, it is essential for Ryanair to narrow down and clarify their core competencies of innovative cost cutting and alternative

While the cost of fuel represents one of the biggest outlays within the aviation industry - average fuel costs amount to some 29% of running costs (IATA, 2016) – one would expect to see savings made on the bottom lone by airlines passed onto the consumer / passenger in the form of reduced fares. This however, has not proved the case across all carriers, indeed the place where savings are most obvious to those looking to travel is almost exclusively within the low cost model operators such as Ryanair and EasyJet, while in