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Ryanair, Low Fares Business Model
EUROPE’S ONLY ULTRA LOW COST AIRLINE
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
EUROPE’S ONLY ULTRA LOW COST CARRIER (ULCC)
Lowest Fares/Lowest Unit Costs in Europe
No fuel surcharges….Guaranteed!
No 1 For Traffic
– 81m
No 1 For Coverage
– 1,600+ Routes from 58 Bases
No 1 For C’mer Service – Most on time flights
– Fewest mishandled bags
– Fewest cancellations
29th Year of Strong Growth
Unblemished 29 Year Safety Record
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
RYANAIR – A BRIEF HISTORY
1985
– Commenced Operations with a single 14 seater aircraft
1988
– Govt. approves 2 airline strategy
1991
– Lost entire share capital
1992
– Transition to low fare model
1997
– EU deregulation of airline industry
– IPO on Dublin/London & NASDAQ
1999
– Purchase first new aircraft (Boeing 737-800 NG)
2008
– Worlds largest international carrier
Today – 303 aircraft (All Boeing 737-800 NG)
– €569m profit in FY 2013
– Market
Cap cost
of €9bn
Europe’s only
ultra-low
carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
ULTRA LOW COST MODEL – KEY FEATURES
Traditional Model
Low Cost Model
Multiple aircraft type
Yes
No
Primary airports / Central base
Yes
No
Multiple distribution channels
Yes
No
Inflexible/unionised workforce
Yes
No
Complex fare structure
Yes
No
Poor Customer Service
Yes
No
Frequent Flyer Schemes
Yes
No
Outstanding Management
No
Yes
Safety & Quality Maintenance
Yes
Yes
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
NO. 1 – FOR CUSTOMER SERVICE
Lowest fares & no fuel surcharges
Free 10kg cabin bag – 80% of pax don’t check-in a bag
Biggest route network in Europe (1,600+ routes)
Most on-time flights – 94% Aug – new record
Fewest cancellations (1 per 10,000 flights Aug)
Least mishandled bags (0.38 per 1,000 bags v 9.4 EU ave)
Priority boarding & reserved seating extended to 45 seats
9M passengers Aug’13 – new record
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
NO. 1 – FOR CUSTOMER SERVICE
On Time %
Lost Bags
% Completions
% Cancelled
RYANAIR
93
0.3
99.6
0.4
Alitalia
88
10.0
99.5
0.5
easyJet
88
RTP
RTP
RTP
Lufthansa
85
10.9
98.4
1.6
B Airways
83
15.6
97.9
2.1
Air France
83
18.9
96.9
3.1
Norwegian
82
RTP
RTP
RTP
10,000 RYA Pax. Survey:
- 87% satisfied/very satisfied with their RYR flight
- 93% would fly RYR again
- 95% said RYR provides excellent value for money
- 84% would recommend RYR to a friend
Latest published Company Year end Information & AEA published statistics
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
3
IMPROVING PASSENGER EXPERIENCE
Multiple website developments in pipeline
More user friendly, easier access to Europe’s lowest fares
New online chat facility, better email access & improved PRM system
Real-time updates by text during flight disruptions
Extra reserved seating row for families (6 rows now avail)
Twitter account launched @Ryanair
Removing RECAPTCHA from 30 Oct – end of S13 schedule
Ryanair mobile: was €3 – free from 1 Oct
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
NO. 1 – LOWEST EX FUEL UNIT COSTS
RYA
EZY
NOR
AB1
LUV
Spirit
Staff
€5
€9
€16
€15
€34
€16
Airport & handling
€8
€21
€19
€37
€9
€5
Route charges
€6
€6
€8
€8
€0
€0
Ownership & maint.
€8
€9
€17
€26
€17
€16
S & M + other
€2
€9
€10
€20
€15
€13
€29
€54
€70
€107
€75
€50
+ 86% +141%
+269%
+159%
+72%
Total
% > Ryanair
Source: Latest published company year end information & The Airline Analyst
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
NO. 1 – LOWEST FARES IN EUROPE
Avg. Fare
% > Ryanair
LOW
Ryanair
€48
HIGH
easyJet
€82
+71%
Norwegian
€86
+79%
Air Berlin
€120
+150%
SAS
€129
+169%
Lufthansa
€211
+340%
AF-KLM
€261
+444%
IAG
€282
+488%
Source: Latest published company year end information
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
FY2013 FINANCIAL HIGHLIGHTS
Mar 12
Mar 13
75.8m
79.3m
+ 5%
Load Factor
82%
82%
-
Avg. Fare (incl. bag)
€45
€48
+ 6%
Rev. Per Pax.
€57
€62
+ 8%
€4,325m
€4,884m
+ 13%
€503m
€569m
+ 13%
Traffic
Revenues
Profit after Tax
Change
Europe’s only ultra-low cost carrier
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STRONG BALANCE SHEET
Mar 12
Mar 13
Aircraft (inc. dep.)
€5,485m
€5,384m
Cash
€3,516m
€3,559m
Total
Net Debt
€110m
€9,001m
€8,943m
Liabilities
€2,069m
€2,172m
Debt
€3,625m
€3,498m
S/H Funds
€3,307m
€3,273m
Total
€9,001m
€8,943m
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
Net Cash
€61m
After
€492m
Spec. Div.
€1BN ADDITIONAL SHAREHOLDER RETURNS
FY 2008 – share buyback 1
€300m
FY 2009 – share buyback 2
€46m
FY 2011 – spec. dividend 1
€500m
FY 2012 – share buyback 3
€125m
FY 2013 – share buyback 4
€67m
FY 2013 – spec. dividend 2
€492m
FY 2014 – share buyback 5 (completed)
€250m
FY 2014 – share buyback 6 (remaining)
€150m
FY 2015 – spec. dividend / share buyback
€600m
Total Returned
€1bn
Returns
in 2 Yrs
€2,530m
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
9
NO. 1 – TRAFFIC GROWTH
85
PAX (m’s)
81
80
65
45
25
05
06
07
08
09
10
11
12
13
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
14
FY
RYA ORDERS 175 NEW AIRCRAFT
New a/c deliver from 2014 – 2018 (FY 15-19)
Vol. order pricing “not dissimilar” to last agreement
Controlled, profitable, organic growth strategy (CAGR 3-5%)
180 apt’s (57 bases) provide platform for growth
75+ apt‘s seeking Ryanair pax. growth
EU market share growth, 15% to over 20% (100m+ pax)
Youngest fleet, avg. age < 5yrs.
Maintains lowest, a/c, crew & maintenance costs
Europe’s only ultra-low cost carrier
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10 YR GROWTH DEAL AT STANSTED
10 year growth deal agreed with MAG from April 2014
MAG offer lower costs, more efficient facilities at Stansted
RYR agrees to grow traffic by 50% from 13.2m to over 20m p.a.
Deal represents over 25% of RYR’s 5 yr growth plans to 2019
Expects to grow from 13.2m to over 14.5m in yr 1 (2014/15)
RYR largest airline at Stansted – committed to growth
Up to 7,000 new jobs created at Stansted Airport
RYR & MAG continue to grow UK tourism & jobs
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
12
RYA’S MKT SHARE – UNDERLINES GROWTH POTENTIAL
Mkt. Share
No. 1
No. 2
No. 3
Spain
21%
RYANAIR
IAG
Vueling
Italy
22%
RYANAIR
Alitalia
easyJet
Ireland
44%
RYANAIR
Aer Lingus
Air France
Poland
23%
RYANAIR
LOT
Wizz
Morocco
15%
RAM
RYANAIR
easyJet
UK
16%
easyJet
IAG
RYANAIR
Germany
5%
Lufthansa
Air Berlin
RYANAIR
France
7%
Air France
easyJet
RYANAIR
Source: Capstats
Restructuring of loss making short haul business underway
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
SUMMARY
FY13 traffic 79.3m - 5% growth
FY13 profits of €569m - 13% growth
7 new bases & over 200 new routes
EU competitors consolidate, restructure or fail
175 a/c order delivers controlled, profitable growth of circa 5% p.a.
Bases/apt’s in place to support growth to 100m+ pax
Further s’holder returns possible from end FY 15 onwards
Europe’s only ultra-low cost airline
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair
DISCLAIMER
Certain of the information included in this presentation is forward looking and is
subject to important risks and uncertainties that could cause actual results to differ
materially. By their nature, forward looking statements involve risk and uncertainty
because they relate to events and depend upon future circumstances that may or
may not occur. It is not reasonably possible to itemise all of the many factors and
specific events that could affect the outlook and results of an airline operating in
the European economy. Among the factors that are subject to change and could
significantly impact Ryanair’s expected results are the airline pricing environment,
fuel costs, competition from new and existing carriers, market prices for the
replacement aircraft, costs associated with environmental, safety and security
measures, actions of the Irish, U.K., European Union (“EU”) and other governments
and their respective regulatory agencies, fluctuations in currency exchange rates
and interest rates, airport access and charges, labour relations, the economic
environment of the airline industry, the general economic environment in Ireland,
the UK and Continental Europe, the general willingness of passengers to travel and
other economics, social and political factors and flight interruptions caused by
volcanic ash emissions or other atmospheric disruptions.
Europe’s only ultra-low cost carrier
© This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair