Ryanair has released their financial statement that exemplifies clearly that the airline continues being a preferred travel partner for millions of people in Europe. The budget airline pretax increased from last year by more than six percent. This is a considerable achievement noting the external environments that the airlines have been operating in of late. The chairman also noted an increase in shares traded in the closed financial year.
In order to reach out to more customers, the company sales prospect was boosted by the announcement that the airliner will cut its fares this financial year. This move is likely to put the airline in a better position in price wars as it is likely to become the cheapest travel partner. This move is explained by the ability of the company to hedge its fuel prices to lower costs per barrel for the next two financial years. The prices are therefore likely to remain low for a long time, a multi-level business strategy that elucidates an effort to overcome porter’s forces of competition a great deal.
Negative Effects on the Price?
The move, however, did not go well with the stock market bullish analysts, who wanted the business to maintain a lead in its profit output and to lay down the strategies for bigger profits instead in the future. This has triggered a negative effect on the price of the airliner share to its best low. Nonetheless ,this is a poor speculation because it is noteworthy from the business level strategy that the airline has laid that they travel partner have diversified their source of revenue by adding a hotel partner to its Ryanair rooms business as well as launching Ryanair holidays in Italy as well as Spain in the past months.
In addition, the travel partner has endeavored to empower its marketing arm by opening a Travel lab in Madrid. The lab is expected to host over 250 new airline professionals who are acquainted with the dynamics of digital marketing. With the escalation of online business and opportunities, the airline is likely to benefit from this move since the lab will go a long way into making the firm presence in the web more visible thus increasing conversion rates.
The Issue of Brexit
The external environment of the airline however remains a threat to the future of the airline. One of the facets of this environment is the issue of Brexit. With the UK out of the euro, the past regime that defined the rules of flying into European market is certainly null and void requiring the UK government to negotiate with Euro a set of new regulation that will govern the market. The UK government has nevertheless shown little interest in the airline industry despite it being one of the most affected. This prompted the airline management to threaten to cut euro travels by autumn of 2018 if the government will not have negotiated a new trade deal with euro partners.
We are not affiliated with Ryanair or its management. We are basically giving our views as clients and fans as well as critics of the airline.