Ryanair Case Study Financial Analysis

Although the firm maintains a bullish outlook, there are diverging opinions regarding the valuation of the firm among investors.

The valuations of the firm vary widely, with stock price estimates ranging from €3.05 to €7.57.

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Ryanair's agreement to buy 100 Boeing 737MAX aircraft, plus a further 100 options, for delivery between 20 allows it to accelerate its traffic growth modestly.

Low-cost airlines' expansion is mostly attributable to the growth in disposable income of the middle class and the accompanying lifestyle changes that characterise Generation Y travellers able to afford multiple short-trips each year (BCG, 2013).

In contrast to previous generation travellers, generation Y fliers have completely different expectations: Millennials expect a high a level of customer service without having to pay a premium and generally value those airlines that offer advanced technological solutions to manage itineraries (BCG, 2013).Increased competition has and will continue to force Ryanair to reduce fare prices.· Costs: Regulation, although beneficial in some regards (cut-price deals), has also been costly for Ryanair.By continuing to use this site, you consent to the use of cookies.We use cookies to offer you a better experience, personalize content, tailor advertising, provide social media features, and better understand the use of our services.After four years of growing passenger numbers in the region of 3% to 5% annually, it looks set to step this up to 6% pa from FY2016 (year to March).The greater fuel efficiency of the MAX and a higher number of seats (197, eight more than on its 737-800s) will give Ryanair significant operating cost per seat savings.Ryanair has the lowest unit costs of any European airline and one of the lowest of any airline in the world.Whether measured by cost per available seat kilometre (CASK), cost per seat, or cost per passenger, Ryanair's production of capacity and traffic costs it less than that of any of its competitors.In addition to the political and the economic uncertainty of the UK, details about the future aviation laws governing UK flights (in the EU) are unknown (FT.com, 2017).In the case of the hard Brexit scenario, airlines with flights between the UK and EU countries will be subject to restrictions that could reduce the demand for air travel between the UK and the EU (Tovey, 2017).