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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 © This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair 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 © This presentation is subject to copyright and may not be copied or used without the express prior consent of Ryanair 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