COMPANY PROFILE

Ryanair Holdings plc

REFERENCE CODE: C8CFEF10-F48D-4186-B360-C23FCFA306EC

PUBLICATION DATE: 27 Mar 2015
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Ryanair Holdings plc

TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
SWOT Analysis.....................................................................................................4

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Ryanair Holdings plc

Company Overview

COMPANY OVERVIEW
Ryanair Holdings plc (Ryanair or the company) operates low fare scheduled passenger airline
serving short haul, point to point routes between the UK, Ireland, and Continental Europe, as well
as Morocco. It is headquartered in Dublin, Ireland and employed 8,992 people as of March 31, 2014.
The company recorded revenues of E5,036.7 million ($6,750.2 million) during the financial year
ended March 2014 (FY2014), an increase of 3.1% over FY2013. The operating profit of the company
was E658.6 million ($882.7 million) in FY2014, a decrease of 8.3% compared to FY2013. The net
profit of the company was E522.8 million ($700.7 million) in FY2014, a decrease of 8.2% compared
to FY2013.

KEY FACTS
Head Office

Ryanair Holdings plc

Airside Business Park
Swords
County Dublin
IRL

Phone

353 1 945 1212

Fax

353 1 945 1213

Web Address

http://www.ryanair.com

Revenue / turnover 5,036.7

(EUR Mn)
Financial Year End

March

Employees

8,992

London Stock
Exchange Ticker

RYA

Irish Stock
Exchange Ticker

RY4B

NASDAQ Global
RYAAY
Select Market Ticker

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Ryanair Holdings plc

SWOT Analysis

SWOT ANALYSIS
Ryanair operates low fare scheduled passenger airline serving short haul, point to point routes
between Ireland, the UK, and Continental Europe, as well as Morocco. The company's distinctive
business model focusing on low operational cost enables it to achieve high asset utilization and
deliver stable financial performance. However, intense competition could impact the company's
ability to grow passenger volumes as well as expand its operational network, which could have
adverse impact on its market share.
Strengths

Weaknesses

Distinctive business model focused on low

operational cost
Robust industry position

Legal proceedings

Opportunities

Threats

Growing global tourism industry

Positive outlook for the European airline
industry
Network and fleet expansion could help to
grow customer base and financial
performance

Intense competition and price discounting

Grounding of fleet due to tough operating
environment
Rising airport charges and introduction of
air travel taxes

Strengths

Distinctive business model focused on low operational cost

Ryanair's conducts its passenger transportation business through distinctive operational characteristics
with operating costs among the lowest of any European scheduled-passenger airline. The company
focuses on reducing and controlling four of the primary expenses involved in running a major
scheduled airline: aircraft equipment costs, personnel costs, customer service costs, and airport
access and handling costs.
Ryanair's primary strategy for controlling aircraft acquisition costs is focused on operating a single
aircraft type. The company operates with a high-seat density of 189 seats and an all-economy
configuration, as opposed to the 162 seats and two-class configuration of the Boeing 737-800 aircraft
used by traditional network airlines, reducing fuel burn and emissions per seat-kilometer flown. By
focusing on operating a single aircraft type (Boeing 737-800), Ryanair is in better position as compared
to peers in controlling costs associated with personnel training, maintenance, and the purchase and
storage of spare parts. It also offers the company greater flexibility in the scheduling of crews and

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SWOT Analysis

equipment. Similarly, the company's compensation for employees emphasizes productivity-based

pay incentives. These incentives include commissions for onboard sales of products for flight
attendants and payments based on the number of hours or sectors flown by pilots and flight attendants
within limits set by industry standards or regulations fixing maximum working hours.
Furthermore, Ryanair has entered into agreements on competitive terms with external contractors
at certain airports for ticketing, passenger and aircraft handling, and other services that management
believes can be more cost-efficiently provided by third parties. The company operates through own
Internet booking facility which allows Ryanair to eliminate travel agent commissions and third-party
reservation systems costs. Ryanair generates over 99% of its scheduled passenger revenues through
direct sales via its website. Also, Ryanair attempts to control airport access and service charges by
focusing on airports that offer competitive prices. More importantly, Ryanair's record of delivering a
consistently high volume of passenger traffic growth at many airports has allowed it to negotiate
favorable contracts with such airports for access to their facilities.
Hence, the company's distinctive business model focusing on low operational cost enables it to
achieve high asset utilization and deliver stable financial performance.
Robust industry position
Ryanair holds industry-leading position on the back of lower fares, better punctuality, fewer lost bags,
great route choice, the most on-time flights, the fewest cancellations, and a continuing program of
improvements. This has resulted in fewer passenger complaints than any other airline in Europe.
Ryanair continues to offer Europes best customer service, with the lowest fares, In addition, the
company delivered one of the best punctuality performances with 93% of on-time flights. Moreover,
the average age of Ryanair's fleet is around 5.5 years. Furthermore, according to an industry reports,
Ryanair is one of the world's most environment friendly airline. Moreover, according to industry
estimates, Ryanair mishandled less than 0.36 bags per 1,000 customers as compared to the global
average of 6.96 mishandled bags per 1,000 customers and European average of nine mishandled
bags per 1,000.
Hence, a strong industry position enables Ryanair to further strengthen its customer loyalty and
customer retention metrics as well as enhance its brand image at regional and global scale.

Weaknesses

Legal proceedings
Ryanair is involved in various lawsuits, claims, and legal proceedings, arising in the ordinary course
of its business. Some of these legal proceedings and claims seek damages, fines, or penalties in
substantial amounts or remediation of environmental contamination. For instance, European
Commission initiated investigations into Ryanair's agreements with the Lubeck, Alghero, Frankfurt
(Hahn), Zweibrucken, Altenburg, Klagenfurt, Stockholm (Vasteras), Paris (Beauvais), La Rochelle,

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SWOT Analysis

Carcassonne, Brussels (Charleroi), Cagliari, Girona and Reus airports. The investigations seek to
determine whether the arrangements constitute illegal state aid under European law. In July 2014
the European Commission announced a no state aid decision in respect of Dusseldorf (Weeze)
airport, as well as findings of state aid to Ryanair in its arrangements with Pau, Nimes and Angouleme
airports. The commission also ordered Ryanair to repay a total of approximately E9.7 million ($13
million) of alleged aid.
In addition to the European Commission investigations, Ryanair is facing allegations that it has
benefited from unlawful state aid in a number of court cases, including in relation to its arrangements
with Frankfurt (Hahn) and Lubeck airports. Adverse rulings in these matters could be used as
precedents by competitors to challenge Ryanair's agreements with other publicly owned airports
and could cause Ryanair to strongly reconsider its growth strategy in relation to public or state-owned
airports across Europe. Hence, such legal proceedings would adversely impact the image of the
company besides resulting in huge financial penalties.

Opportunities

Growing global tourism industry

The global tourism industry is booming which could boost the demand for the group's services.
According to the World Tourism Organization (UNWTO), the number of international tourists (overnight
visitors) reached 1,138 million in 2014, 51 million more than in 2013. With an increase of 4.7%, this
is the fifth consecutive year of above average growth since the 2009 economic crisis. Geographically,
the Americas and Asia Pacific regions registered 7% and 5%, growth in tourist arrivals, respectively.
In addition, Europe and Middle East each grew at a modest rate of 4%.
Moreover, the UNWTO forecasts international tourism to grow by 3% to 4% in 2015. In terms of
region, Asia and the Pacific is expected to grow by (4% to 5%), the Americas by (4% to 5%), followed
by Europe with (3% to 4%). In addition, the decline in the global oil prices is expected to further lower
transport costs and boost economic growth by lifting purchasing power and private demand in oil
importing economies.
Ryanair is well positioned to exploit the growing tourism industry to enhance its revenues and markets
share. The company operates low fare scheduled passenger airline serving short haul, point to point
routes between the UK, Ireland, and Continental Europe, as well as Morocco. The company also
provides various ancillary services and engages in other activities connected with its core air
passenger service. These include non-flight scheduled services, in-flight sale of beverages, food,
and merchandise, and internet-related services. Thus, the growing global tourism coupled with the
companys focus on holiday and leisure travelers would enable it to boost its revenues and margins.
Positive outlook for the European airline industry

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SWOT Analysis

The European airlines industry is expected to grow positively in the coming periods. According to
MarketLine (a unit of Informa), the European airlines industry generated total revenues of $185,119.3
million in 2014, representing an increase of 2.3% over 2013. Furthermore, the industry is expected
to grow at a CAGR of 3.5% for 2014-18 periods to reach a value of approximately $212,375.2 million
in 2018. Ryanair is one of the leading providers of passenger air transportation services in Europe.
As of June 30, 2014, Ryanair offered around 1,600 scheduled short-haul flights per day serving
approximately 186 airports throughout Europe. Thus, the positive growth of European transportation
services industry could provide increased business opportunities to the company.
Network and fleet expansion could help to grow customer base and financial performance
Ryanair focuses on the continuous expansion of bases and addition of new routes to enhance its
competitiveness and grow business. For instance, in January 2015, the company announced a new
route from Glasgow to Berlin, and a 4th daily Glasgow London Stansted service. Similarly in
December 2014, Ryanair extended its London Stansted summer 2015 schedule with a new route
to Deauville in France which will operate twice weekly. In the same month, the company added three
new routes to its Athens Summer 2015 schedule, to and from Budapest, Bratislava and Santorini,
which will deliver over 2.2 million customers in 2015. Further in November 2014, Ryanair announced
plans to open its 1st Slovakian base (base No.71) at Bratislava with two based aircraft and 16 routes
including one new route to Madrid, which will deliver almost one million customers per annum.
Further in August 2014, the company launched its Glasgow summer 2015 schedules, with nine new
Glasgow International routes to Bydgoszcz, Carcassonne, Chania, Derry, Dublin, London Stansted,
Riga, Warsaw Modlin and Wroclaw, and 16 Glasgow Prestwick routes, which together will deliver
over 1.35 million customers per annum to and from Glasgow. In August 2014, Ryanair launched a
new (three times daily) Dublin-Brussels Zaventem route, with nine new routes and increased flights
on 21 existing routes to and from Dublin Airport. Ryanair launched three new routes to Cologne,
Edinburgh and Glasgow as well as increased frequencies on 24 other routes.
Additionally, Ryanair intends to continue to expand its fleet and add new destinations and additional
flights. For instance, in March 2015, the company purchased an additional three Boeing 737-800
aircraft, for delivery in early 2016, valued at $280 million, bringing its total order to 183 737 NGs, in
addition to orders for 200 Boeing MAX 200 aircraft, which will allow Ryanair to grow its traffic to 160
million customers per annum by 2024. During September 2014, Ryanair signed an agreement with
Boeing to purchase up to 200 new Boeing 737 MAX 200 aircraft (100 firm and 100 options). The
company took delivery of the first of its 180 new Boeing 737-800 NG order, worth $16 billion. Hence,
continued focus on network and fleet expansion helps the company to expand its market reach and
customer service, which in turn could grows its customer base and financial performance.

Threats

Intense competition and price discounting

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SWOT Analysis

The airline industry is highly competitive. The principal competitive factors in the airline industry
include fares, customer service, routes served, flight schedules, types of aircraft, safety record and
reputation, code-sharing relationships, capacity, in-flight entertainment systems and frequent flyer
programs. Airline profits are sensitive to even slight changes in average fare levels and passenger
demand. Unlike Ryanair, certain competitors are state-owned or state-controlled flag carriers and
in some cases may have greater name recognition and resources and may have received, or may
receive in the future, significant amounts of subsidies and other state aid from their respective
governments.
Ryanair's main competitors include Air France, British Airways, easyJet, Lufthansa, and Alitalia,
among others.The price competition between airlines occurs through price discounting, fare matching,
increased capacity, targeted sale promotions and frequent flyer travel initiatives. A relatively small
change in pricing or in passenger traffic could have a disproportionate effect on an airline's operating
and financial results. Therefore, intense competition could impact the company's ability to grow
passenger volumes as well as expand its operational network, which could have adverse impact on
its market share.
Grounding of fleet due to tough operating environment
In recent years, in response to an operating environment characterized by high fuel prices, typically
lower seasonal yields and higher airport charges and/or taxes, Ryanair adopted a policy of grounding
a certain portion of its fleet during the winter months (from November to March inclusive). In the
winter months of FY2014, Ryanair grounded approximately 70 aircraft and the company intends to
ground approximately 50 aircraft during the winter months of FY2015. While seasonal grounding
does reduce Ryanairs variable operating costs, it does not avoid fixed costs such as aircraft ownership
costs, and it also reduces Ryanairs potential to earn ancillary revenues. Reducing the number and
frequency of flights may also negatively affect Ryanairs labor relations, including its ability to attract
flight personnel only interested in year round employment. Thus seasonal grounding of fleet may
negatively impact its financial condition and results of operations.
Rising airport charges and introduction of air travel taxes
The introduction of airport charges and air travel taxes may negatively impact the company's
operations. Currently, the UK government levies an air passenger duty (APD) of 13 ($19.4) per
passenger from 10 ($14.9) per passenger in 2007. The Moroccan government has also introduced
a similar tax of E9 ($12) from April 2014. The German government introduced an air passenger tax
of E8 ($10.7) in 2011 which was subsequently reduced to E7.5 ($10) in 2012. In Austria, the
government introduced an ecological air travel levy of E8 ($10.7) in 2011. Other governments also
have introduced or may introduce similar taxes. According to the company, the increase in this tax
had a negative impact on Ryanairs operating performance, both in terms of average fares paid and
growth in passenger volumes.
Therefore, the decline in the passenger volume due to various charges and additional air travel taxes
could erode Ryanair's revenue-base which in turn would create operational imbalance due to the
rise in cost structure of the company. The introduction of government taxes on travel could have a

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SWOT Analysis

negative impact on passenger volumes, during period of decreased economic activity, thus impacting
operations and revenues.

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