The Ryan Air

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This was an organic growth model.The airline makes money by reducing its costs at every point. This is the reason that despite a drop in yields of 14 percent, it still achieved margins of over 20 percent as they carried 47% more passengers. The airline has strong sales promotions and heavy discounting. The airline owns rather than leases aircrafts but has been considering leasing at least one-third of its fleet due to changes in the market conditions. It also makes money by oil hedging but since the oil prices were expected to decline in the year under study, Ryanair decided not to hedge in 2004. To cope with the falling ticket prices, the airline hope to generate revenue by providing ancillary services such as satellite television and internet services, arcade games on rented laptops and screening favorite movies on television. They also earn through advertising on their website.However, despite the low fares, the airline’s load factor stared declining and its share price had declined substantially. This requires that Ryanair reconsider its strategy and take decisions based on facts and figures.Ryanair has registered revenue growth in 2004 over 2003 but the net profit has declined by 14% during the same period (Appendix A). The airline has been consistently registering profits for 26 quarters but the profits have declined in 2004 which has been primarily due to escalating fuel costs. The number of aircrafts operated commensurate with traffic growth as is evident from Appendix B. The net profits have declined as also the earnings per share (Appendix C) which has given the airline an adverse reputation with investors. The balance sheet shows that the equity base has declined while its total liabilities have increased.Economical – low impact because again being within Europe, which has a stable economy and stable consumers. Denomination is Euro is another positive factor contributing to economic stability. Outside of