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AIRLINES INDUSTRY ANALYSIS

AIRLINES INDUSTRY ANALYSIS. Cristina Aura Font Denise López Redondo Anna Serra Muntane Coline Spy. My Comments. Positive Excellent presentation Great evidence of research Great graphics. Critical Perhaps too much writing on some slides. Too many slides (Max 18)

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AIRLINES INDUSTRY ANALYSIS

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  1. AIRLINES INDUSTRY ANALYSIS Cristina Aura Font Denise López Redondo Anna Serra Muntane Coline Spy

  2. My Comments Positive Excellent presentation Great evidence of research Great graphics Critical Perhaps too much writing on some slides. Too many slides (Max 18) Less about history and industry background.

  3. 1- Aviation overview • 2- Market figures • Low cost companies • Introduction • 3- Analyzed companies • 4-Wining companies • 5-Selection criteria • Non selected companies • 6-Luftansa • 7- British airways • 8- Ryanair • 9-Vueling • Selected companies • 10-Iberia • 11- Easy Jet • 12 - Comparison of Iberia and Easy Jet Ratios • Total Assets • Total dividends • 13- Future expectations Index

  4. HISTORY • 1-The Pioneer Years (1900-1914): Wright brothers built & flew 1st airplane 36.5m, USA • 2-Golden Age(1914-1939): • 3-World War II (1939-1945): Progress goes on and massive production • 4-The cold war + Modern Age (the present) (1945-2010): Today Half of the world’s fleet is operated by 17 large airlines 1- Aviation overview • First performances steps under World War I • Technology and performance advances

  5. 2- market figures • + 400 airports • + 160 airlines • + 4,700 commercial aircrafts in service • + 3 million jobs

  6. LOW COST COMPANIES • Europeancompanies: • Airlib Express • Bmibaby • BuzzAway • CiaoFly • EasyJet • Germania • GoFly • Goodjet • SkyEurope • Ryanair • Virgin Express • African companies: • Kulula • South America companies: • Gol • Transatlanting flights companies (Europe-South America): • LTU • E.U companies: • AirTran • America West • American Trans Air • Delta Express • FrontierAirlines • JetBlue Airways • JetsGoAirlines • NationalAirlines • Southwest • SpiritAirlines, • Suncountry • Tango Airlines • Vanguard : • Westjet : • Asian and Sotuh American companies (Australia and New Zelandincluded): • Air Asia • Air Nauru • Freedom Air • Virginblue http://www.youtube.com/watch?v=0XpIRR_gV4c

  7. Choose 6 companies and considerate them. • 3 low cost and 3 regular airlines carriers • Choose 1 low cost and 1 regular airline. INTRODUCtION:

  8. 4- analysed companies

  9. 5- winning companies

  10. Clarity/Transparency: Transparency of the website and clarity of executions of the business structure. Financial reporting is required to be transparent., the readers can be able to see the whole picture. • Availability of historical information: The evaluation of past history of the company can assist with expectations of future performance. Looking at previous years and evaluating how well the plans have been achieved. • Social responsibility: Is becoming increasingly important for management to appreciate. It´s essential for sustainable growth and risk avoidance. Enterprises must adapt to the changing demands to ensure they have a future. 6- selection criteria

  11. Shareholders information:Information on the shareholding structure. The annual shareholders meeting information, the shareholders have to know specific information like earning per share and the comparison with the industry bench marks. • Business strategy: Clarity and relevance of the business strategy and the Management achievements. • Investment analysis report:contains detailed financial and operational information. Examination and assessments of economic and market trends, earnings prospects earnings ratios, and various other indicators and factors to determine suitable investment strategies. 6- Selection Criteria

  12. 6- Selection Criteria Criteria

  13. Non-selected companies

  14. 7- Lufthansa • Origin: Germany • Founded: 1926 • Employees: 112.320 • Destinations: 274 • Reasons of discarding: 1. Clarity/Transparency: - The structure of the page it’s simple - It’s an original website so easy to understand. - The languages available : German and English 2. Availability of historical information: - Made quarter reports - We can find information since 1995 3. Social responsibility: - Sustainability is an important issue - Focus on reducing pollution and training • Passengers: 209.500 • Daily flights: 2.445 • Fleet size: 2.000 4. Shareholders information: - Shareholders structure is not clearly explained. 5. Business strategy: - Strategy achievement is the Cash Value Added 6. Investment analysis report: - The information is separate for each business segment

  15. 8- AUSTRIAN AIRLINES • Origin: Austria • Founded: 1957 • Employees: 6.396 • Destinations: 130 • Reasons of discarding: 1. Clarity/Transparency - The information in the website is accessible but reports a bit confusing 2. Availability of historical information: - The information about is updated daily, - There is information since 10 years ago 3. Social responsibility: - An Austrian Airlines Environmental Report. - Involved in several research project • Passengers: 9.9 million • Daily flights: 800 • Fleet size: 41 4. Shareholders information: - The page contains detailed financial information, - There is exceptional graphical depictions. 5. Business strategy's - Clearly established strategy - Objectives in short and long term are defined. - They follow a offensive market strategy. - The information only is in German. 6. Investment analysis report: - Is easy to follow - The results can be compared with previous - Lacks of income statement past years.

  16. 10- vueling • Origin: Spain • Founded: 2004 • Employees: 1.280 • Destinations: 57 • Passengers: 14.000.000 • Daily flights: 150 • Fleet size: 35 4. Shareholders information: -It´s explained in general but not specific information 5. Business strategy: -It’s clear defined - An airline that was direct, honest and easy to use. 6. Investment analysis report: - It’s not explained in the website. - In general the information is quite brief. • Reasons of discarding • 1. Clarity/Transparency • -The structure it’s easy to follow • -The content is simple and short • -The website is available in many languages • 2. Availability of historical information: • -We can find information about the company, • since the 2004. • 3.Social responsibility: • -Doesn’t pay attention to the that issue in the website.

  17. 9- ryanair • Origin: Ireland • Founded: 1985 • Employees: 7.245 • Destinations: 160 • Passengers: 66.503.999 • Daily flights: 1.400 • Fleet size: 254 • Reasons of discarding: • Clarity/Transparency: 4. Shareholders information: • - Difficult management of the website - Not clear • - Not serious design - Little information • - Non serious ad • Availability of historical information: 5. Business strategy: • - Disponible since 1985 but a little bit confuse - Strong business strategy • - Leading low fares airlines around the world. • Social responsibility: 6. Investment analysis report: • -Noise : minimum - Financial reports available since 1999 • - Ryanair: Europe’s greenest airline - Financial statements not clear

  18. selected companies

  19. 11- iberia • Origin: Spain • Founded: 1927 • Employees: 20,671 • Destinations: 112  • Passengers: 25,5 million • Daily flights: 1,000 • Fleet size: 180 • Reasons of choosing: • Clarity/Transparency: 4. Shareholders information: • - They supply relevant information - Good structured and clear • - Information clear and good organization • Availability of historical information: 5. Business strategy: • - Available since 1927 - Maintain or even improve the leadership • - Updated since nowadays • Social responsibility: 6. Investment analysis report: • - 1 of the 3 world airlines with best environmental record - Clear notes of financial statement • - Collaborates in the protection of endangered species - Financial statements available since 2004

  20. 12- EASY JET • Origin: Great Britain • Founded: 1995 • Employees: 7.300 • Destinations: 525 • Passengers: 49 million • Daily flights: 1.500 • Fleet size: 192 • Reasons of choosing: • Clarity/Transparency: 4. Shareholders information: • - Good structure of the website - Clear and specific for each period • - Website Number 1 for booking flights • Availability of historical information: 5. Business strategy: • - Disposable since 1995 but a little bit short - “Low cost, care and convenience” • - it is not clear explained • Social responsibility: 6. Investment analysis report: • - act in a efficiency way: in the air and on the ground - Summaries financial statement • - employee policy equality - Clear notes • - charity each year - Comparisons information with the year before

  21. Comparison of iberia and easy jet ratios

  22. Total Assets turnover: • Explanation: Iberia’s management at using it’s assets is more effective than the one of EasyJet. 13- ratio analysis:

  23. The current ratio: Explanation:In 2007 both companies have a really good ability to pay short-term liabilities. In 2009, EasyJet can only just cover its current liabilities 13- ratio analysis:

  24. Iberia’s future expectations: • Iberia, American Airlines, and British Airways have formed a commercial alliance covering all their flights between Europe and North America. • More destinationsin a combined network of 443 destinations in 105 countries and 5,200 flights per day. • More routes and frequencies:thanks to enhanced competitiveness. • Easy jet’s future expectations: • Developing its strength as the largest low cost airline in Europe • An increase of the total revenue over the previous year (2010) of nearly £200 million. • New city destinations are expected to be added to their network • Latest new: New low fare route to Jordan

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