Financial Reporting and Analysis of Ryanair and Air Arabia

The study has performed financial comparison of Ryan Air and Air Arabia. The methodology used in the report is a range of profitability ratios, liquidity ratios, efficiency ratios and gearing ratios. The study has also used the technique of horizontal and vertical analysis for a more vivid description of changes in the key areas of income statement and the balance sheet.

Financial Reporting and Analysis
Name of the Student
Name of the University
Author’s Note

Executive Summary
The study has performed financial comparison of Ryan Air and Air Arabia. The methodology
used in the report is a range of profitability ratios, liquidity ratios, efficiency ratios and gearing
ratios. The study has also used the technique of horizontal and vertical analysis for a more vivid
description of changes in the key areas of income statement and the balance sheet. This section
of the study has included the investigation of five main areas of financial statement ranging from
total Noncurrent assets, total current assets, total current liabilities, total long-term liabilities and
total shareholder. The overall evaluation has suggested that when comparing financial
parameters such as profitability, leverage and loans to capital employed Air Arabia performed
better than Ryan Air. When the income statements of both the airlines are compared for three
years, it could be stated that lower revenue fluctuations are observed in Ryanair and its
performance is deemed to be more consistent than Air Arabia. This is mainly owing to a range of
factors such as the operations of Ryanair in a stable geopolitical environment, favorable brand
image in the market. On the other hand, the regions of Air Arabia are reliant on the fuel sector
and hence, it is highly sensitive to changes in the prices of fuel. However, when parameters such
as efficiency are considered, Ryan Air has clearly excelled in performance. Some of the major
recommendations for improving the financial perspective is identified with optimizing the costs
incurred for the airlines. In addition to this, the achievement of targets is related to plane leasing
cost and seat revenue. This can be improved by standardizing the models of the planes used by
both the airliners.

Table of Contents
Introduction..........................................................................................................................3
Profitability Ratios...............................................................................................................4
.............................................................................................................................................6
Efficiency Ratios.................................................................................................................6
Liquidity Ratios...................................................................................................................6
Gearing Ratios.....................................................................................................................7
Horizontal Analysis (Please use 2015 as the base year)......................................................8
Vertical Analysis.................................................................................................................9
Evaluation of Business Performance of Air Arabia..........................................................10
Structuring of the Airline...............................................................................................10
Identification of business success measured in the airline industry..............................10
Focus most applicable to the airline..............................................................................11
Examining financial and non-financial measure of performance..................................12
Using direct competition as a means of evaluating the performance............................21
Comparative Analysis between the airlines.......................................................................21
Conclusion.........................................................................................................................23
Recommendations..............................................................................................................24
References..........................................................................................................................26
List of Appendix................................................................................................................32
Ratio Analysis................................................................................................................32
Horizontal Analysis.......................................................................................................36
Vertical Analysis...........................................................................................................38

Introduction
The report presents a comparative analysis of two chosen airlines. It investigates their
financial positions in the aviation industry of Europe and the Middle East. The two airlines that
have been chosen for this paper include Ryanair and Air Arabia. Ryanair is a low-cost Irish-
based airline established in 1984 having primary operational bases at London Stansted and
Dublin airports. It has become the largest European airline in 2016 in terms of passengers carried
and more precisely, it has carried more international passengers than any other airline
(Ryanair.com 2018). On the other hand, Air Arabia provides offers global commercial air
transportation, passenger transport, cargo services and aircraft rental. The airline is involved in
providing its passenger transport services via buses, cars, air travel and limousine to 130
destinations in Africa, Europe and the Middle East (Airarabia.com 2018). Although the financial
year ends for Ryanair and Air Arabia fall on different times during the year, for standardization
purposes, this report assumes the historical periods (2015-2018) for each organization to be the
same.
The analysis looked comparatively at three significant financial ratios, which include
profitability ratio, liquidity ratio and efficiency ratio for the two airlines. The business strategies
are evaluated as well by using the balanced scorecard approach for understanding the sustainable
ground for future prosperity. This analysis would assist the stakeholders in undertaking decisions
regarding the financial conditions of the airlines.
Profitability Ratios
Net and Gross Profit Margins
According to the profitability ratio table provided below, Ryanair’s net and gross profit
ratios follow a similar trend. The year 2016 yielded the highest ratios although it did not yield

the highest revenue. From the notes attached to the 2016 Ryanair financial report, this is credited
to the fact that Ryanair sold its holding in Aer Lingus in that year. This led to an increase in the
gross and net profits. Excluding this fact, Ryanair continued to show a steady growth in revenue
for the 3- year period. This was due to fuel prices going down worldwide while Ryanair’s market
share was getting bigger due to expansion and customer focus through launching the “Always
Getting Better” program.
Ryanair’s revenue in 2017 is higher than the previous year but this increment is marginal
when compared to the growth in revenue between 2015 and 2016. 2017 was a difficult year for
the aviation industry in Europe due to different terror attacks in the region and large charters
taking a large market share in Portugal and Spain, Ryanair’s lead markets (Ryanair-FY2017-
Annual-Report.pdf, 2018).
In contrast to Ryanair, Air Arabia has its worst financial performance within the 3-year
period in 2016. The drop in fuel prices negatively impacted the Middle East as it is an oil
producing region. The price drop led to a general regression in the region’s economy and
specifically hit the aviation sector, as it made it more challenging to obtain better yields per unit.
Added to this was the overcapacity of the Middle East’s aviation market when compared to the
demand on air travel. The Middle Eastern carriers continued their fleet expansion during difficult
economic times based on previous demand forecasts (Air Arabia Annual Report 2016, 2017).
This is reflected on Air Arabia’s financial statements for the year 2016 as its revenues went
down while its assets kept growing.
On the other hand, 2017 was a good year for Air Arabia as it succeeded in achieving an
all-time record profit. Although the revenue for this year was lower than that of 2016, Air Arabia
managed to substantially lower its costs thus resulting in bigger gross and net profits.

Return on Equity
Return on equity denotes the portion of return that an organization makes from the
investment of the shareholders (Barr and McClellan, 2018). Similar to the previous Ryanair’s
(ROE) was at its highest in 2016. Along with growth in revenue and in profit, 2016 showed a
decrease in equity for Ryanair due to the sale of its shareholder equity in Aer Lingus. According
to csimarket.com, the average ROE for the airline industry falls at 23.3%. Ryanair has recorded a
higher than market average ROE for all the 3 years.
For Air Arabia, 2016 is again the year with the weakest performance. Reasons for this are
discussed above. The ROE values for Air Arabia fall below the industry average. This could be
attributed to the fact that Air Arabia has been in existence only since 2003 and still relies heavily
on the capital invested rather than the investments from equity. Whereas in Ryanair 30 years of
successful operations means that it can rely less on capital invested and is thus is able to generate
more income from investments made on shareholders’ equity.
Return on Capital Employed (ROCE)
Return on capital employed is used for illustrating the ways through which an
organization uses its long-term investments for generation of income (Bekaert and Hodrick,
2017). Although Ryanair has increased market share, Ryanair has not been able to use its long-
term investment supplies for generating income due to minimized return on capital employed.
On the other hand, the ratio has remained stagnantly low for Air Arabia in all three years due to
lower market share.

Profitability Ratios:
Particulars 2017 2016 2015 2017 2016 2015
$m $m $m $m $m $m
Profit for the year A 1316.0 1559.0 867.0 631.0 490.0 511.0
Revenue B 6648.0 6536.0 5654.0 3739.0 3778.0 3826.0
Total Assets C 11990.0 11218.0 12185.0 12964.0 12513.0 11399.0
Total Equity D 4423.0 3597.0 4035.0 6036.0 5443.0 4962.0
Gross Profit I 1856.0 1753.0 1277.0 349.0 262.0 366.0
Capital Employed J 1694 1452 2396 993 559 282
Net Profit Margin E= A/B 19.80% 23.85% 15.33% 16.88% 12.97% 13.36%
Return on Equity (ROE) F=A/D 30% 43% 21% 10% 9% 10%
Return on Capital Employed (ROCE) G=A/J 78% 107% 36% 64% 88% 181%
Gross Profit Margin H=I/B 28% 27% 23% 9% 7% 10%
Ryanair AirArabia
Efficiency Ratios
The efficiency ratios that have been considered for both airlines include fixed asset
turnover ratio, total asset turnover ratio, debtor turnover ratio and revenue per passenger
kilometers (Refer to Appendix for detailed calculations). Asset turnover ratio denotes the
amount of revenue per unit value of assets used. A higher ratio is always favorable for an
organization, since it implies that the organization is making more money from every asset
utilized (Brigham et al. 2016). Despite the fact that both the airlines have lower asset turnovers
because of operating costs like additional security measures, Ryanair has recorded slightly
greater asset turnover ratio. This describes that Ryanair has been able of generating additional
money than Air Arabia. On the other hand, debtors’ turnover ratio denotes the amount of time
taken by an organization in collecting lent amounts from the debtors (Buehlmaier and Whited
2018). For both Ryanair and Air Arabia, the amounts are collected from the debtors at almost
same rates; however, Air Arabia has been collecting amounts from the debtors at a slightly
increased rate. Finally, in terms of revenue per passenger kilometers, Ryanair is observed to be
placed in a favorable position, as it has greater market share and international reputation.

Liquidity Ratios
For analyzing the liquidity position of Ryanair and Air Arabia, the two liquidity ratios
that have been taken into consideration include current ratio and cash ratio. In the words of
Edwards (2014), current ratio implies the ability of an organization in transforming its assets into
liquid money. The standard current ratio is considered to be 2. In case of Ryanair, the ratio has
fallen from 1.72 in 2015 to 1.43 in 2016; however, it has increased to 1.56 in 2017. On the other
hand, for Ryanair, the ratio has slightly increased from 0.24 in 2015 to 0.25 in 2016 and there is
further slight increase to 0.27 in 2017. This implies that Ryanair has performed better in this
front by being able to convert its assets into cash for covering short-term liabilities rapidly. On
the other hand, Air Arabia has significantly lower current ratio signifying that it does not have
sound performance.
As commented by Erdogan, Erdogan and Ömürbek (2015), the cash ratio signifies the
ability of an organization in paying off its short-term liabilities with cash and cash equivalents.
More precisely, this ratio denotes cash and cash equivalents as a percentage of current liabilities.
In terms of cash ratio, the trend is observed to be increasing for both the airlines, as they have
managed to increase its cash base over the years.
Gearing Ratios
For analyzing the financial leverage position of Ryanair and Air Arabia, the three ratios
that have been taken into account include debt-to-equity ratio, debt ratio and equity ratio. As
stated by Finkler et al. (2016), debt-to-equity denotes the percentage of financing, which comes
from investors as well as creditors. When the ratio is higher, more bank loans are used than
shareholder funds. The ideal debt-to-equity ratio is considered to be 1 (Frias‐Aceituno,
Rodríguez‐Ariza and Garcia‐Sánchez 2014). In this case, the ratio for both the airlines has been

above 1 in all the three years, which clearly implies that they rely more on raising funds through
bank loans rather than issuing new equity shares in the market.
In terms of debt ratio, the ratio is observed to be falling for both the airlines in the year
2017; however, the figure is lower for Air Arabia. The trend is similar in case of equity ratio as
well, which implies that both the airlines have failed to generate adequate funds from the
shareholders/investors in the market.
Horizontal Analysis (Please use 2015 as the base year)
Ryanair:
For Ryanair, increase in revenue and gross profit from 2015 to 2016 can be observed as
15.60% and 32.27% respectively. This denotes high-speed growth rate of the organization over
the years, which denotes greater earning power. On the other hand, there is considerable rise in
its operating expenses, which constitute of maintenance, marketing, route charges, employee
cost, oil and fuel. There has been an increase of 79.82% in terms of the net income for Ryanair in
2015 to 2016. Therefore, Ryanair has managed to maintain its pace of diversifying business as
well as optimized operations. This is dependent on the recovery of the economy in Europe,
supplier competition and passenger demands, which has resulted in profitability benefits of
Ryanair (Gigler et al. 2014).
From the balance sheet statement, it could be evaluated that there has been steady growth
in Ryanair during the past three financial years. In its balance sheet statement, the long-term debt
has been comparatively more than short-term debt over the years. Moreover, its shareholders’
equity has decreased by -7.94% in the year 2016 that implies greater return of the interests of the
shareholders.
Air Arabia:

In case of Air Arabia, the significant area to be investigated would be operating profit
that has declined by 35.28% from 2015 to 2016 and risen by 31.78% in 2017. The decline by
35.28% from 2015 to 2016 is mainly due to the fall in cost of sales by 5.82% in 2017. In the
meantime, the expenses had shown positive changes, as sales, general and administrative
expenses have declined by 2.61% in 2017. Despite the rapid rise in the price of jet fuel over the
years leading to rise in cost of fuel for the airline, it has formulated solutions where the
passengers have to bear additional charges for the consumption of jet fuel (Sullivan and
Mackenzie 2017). The ticket fares have still been attractive in contrast to the other full cost
airlines suffering from increased jet fuel prices.
In terms of the balance sheet statement, a considerable difference has taken place in
relation to current assets, particularly in cash and cash equivalents. This is because the
organization has minimized its short-term debt over the years and it has led to minimization of
non-current debt slightly as well by 0.34% in 2017. On the other hand, the growth in net profit
over the years has resulted in growth in shareholders’ equity over the years leading to better
returns for the shareholders (Grant 2016).
Vertical Analysis
After reviewing the non-current assets in the balance sheet statement of Ryanair and Air
Arabia, property, plant and equipment have been increasing smoothly over the years; however,
the increase is marginal for other non-current assets. The percentage of property, plant and
equipment has been 99.04% of the total non-current assets for Ryanair in 2015-2016 is depicted
as 14.87%. The percentage of property, plant and equipment has been 15.82% of the total non-
current assets for Ryanair in 2017, while the same has been 75.18% for Air Arabia in 2017. The
figure implies that both Air Arabia and Ryanair are in a stable expansion. However, in terms of
intangible assets, a greater percentage of the same is included in the non-current assets of Air

Arabia compared to Ryanair. Thus, it could be said that majority of the assets and liabilities are
in the form of slots and aircrafts.
In terms of current assets, steady increase could be observed over the years for both the
airlines, particularly with the rise in cash and cash equivalents. This is mainly due to the fact that
these two airlines have minimized their short-term bank borrowings over the years. The situation
is identical in case of non-current liabilities as well, in which the maximum elements are
increasing over the years after which a slow recovery took place. There have been reductions in
short-term and long-term borrowings for both the airlines in 2017 and decline in bank loans has
minimized the interest expenses for interest bearing loans by 15.49% for Ryanair. On the other
hand, Air Arabia has incurred increased interest expenses making up 3.18% of sales revenue.
Therefore, after considering all these aspects, Ryanair is observed to be in a competitive position
in the global aviation industry. This is due to the fact that it has wider reach to the market and it
has carried increased number of passengers over the years due to which it has managed to
maintain favorable financial standing in the operating market.
Evaluation of Business Performance of Air Arabia
Structuring of the Airline
Identification of business success measured in the airline industry
The measurement of the key success factors in the airline industry is depicted to ranging
with several number of factors. For instance, the measurement of success pertaining to attracting
the customers ranges from attractiveness of the airline’s service and effectiveness of the airline’s
promotional expenditures. The measure of success based on the effectiveness of the attracting the
customers is often defined with derivation of the promotional effectiveness. This measure is seen
with the sales per dollar pertaining to the promotional expense. Except where otherwise noted,

the analysis of the data pertaining to the Department of Transportation databases in UAE
(Mohamad et al. 2017).
The second crucial factor is considered with managing people. This factor relates to
managing productivity in the airline. The measure for this is seen with capacity per employee
and this is often regarded as how effectively the employees work together for providing the
physical services in transporting the passengers from one place to another. The morale for this
is seen to be considered with how the committed employees are able to provide effective
physical service in getting the passengers from one place to another. More importantly morale is
considered as the measure of how committed employees are able to provide good service to the
customers involved in the aviation industry (Ellis et al. 2018).
Managing Finance is another determinant of the success factor among the airline
industry. More importantly unit revenue and unit cost are important by themselves and the
relationship among them should be also considered effectively by the company. The unit
revenues and unit costs are particularly seen to be effective for the long-term profit of the
company (Sweis et al. 2019).
Focus most applicable to the airline
Air Arabia is seen as a one of the budget airliners headquartered in the A1 Building
Sharjah Freight Center, Sharjah International Airport, in United Arab Emirates. The scheduled
service of the airline is seen to operate in more than 151 destinations. However, some of the
main areas of problem with the airliner is considered with comparatively lower performance
pertaining to the areas of maintaining a steady cash ratio. This is particularly evident with the
Cash & Cash equivalents as per the current liabilities. The focus pertaining to this aspect needs
to be seen with an augmented emphasis on the short-term cash available for maintaining a steady
cash ratio. The airliner needs to ensure steady cash by following up with the account’s

receivables (Mohamad et al. 2017). The company should be further focusing on the quality of
the services offered. This are seen to be depicted as per the various types of the considerations
which are particularly relevant to the keeping employees in the loop, staying in sync with
partners, upgrading the technology, taking critical look at the flight schedules and turning your
data into intelligence (Smits 2018).
It needs to be discerned that Europe offers lot of scope to Ryanair therefore it should stick
to the strategy of discount. Due to the support of European Government, the airliner aims to
pivot growth away from the U.K. airports and emphasize more with growth strategy aimed in
European airports over the next two years. In addition to this, the primary strategy of the board is
considered with strategy formulation, policy and control. There has been also significant amount
of focus on the relevant expertise, quality and experience expected from the personnel’s to
improving the shareholder value. The introduction of Always Getting Better (“AGB”) program
incorporated with digital technology the airliner has been able to open new avenues in terms of
better customer interaction fetching them the appropriate information. Some of the other focus
on the financial measures taken by the company has been depicted with focusing on maintaining
a low operating cost. This was particular evident in 2016 fiscal year, when Ryanair managed to
reduce the operating cost from €47.69 per passenger in the 2016 fiscal year to €50.92 in fiscal
2015 (Ryanair.com 2018).
Examining financial and non-financial measure of performance
The Balanced Score Card of Air Arabia
Perspective Objectives Measure Targets Initiatives

Customer Perspective
Increase
customer
service
through
sustainable
returns
The present
initiative taken by
the Airliner is to
improve the
customer service
based on several
types of factors
which will be able
to bring higher
sustainable returns
(Airarabia.com
2018).
The customer
target is set at
increasing the
sales revenues
by 15%
(Airarabia.com
2018).
The airline is already
recognized as a low-
cost operator.
Therefore, rather than
putting sole focus on
the prices it needs to
increase its customer
base and improve the
overall turnaround
time (El-Din et al.
2015).
Increased
ratings with
on time arrival
and retain
more
customers
The present
performance
measure shows
that it has been
able to maintain
the high frequency
for on-time arrival
and good ranking
with existing
customers
(Airarabia.com
The target of the
company is also
set for being first
in the industry
and ensuring that
it is able to
achieve
95% customer
satisfaction level
(Airarabia.com
The improvements
can be also brought by
building upon
customer loyalty
program. The
improvement of the
non-financial metrics
such as high customer
satisfaction can be
also achieved by
taking feedback from

2018). 2018) the customers and
tracking of ranking
change among the
factors selected for
customer
improvement
(Airarabia.com 2018).
Financial perspective
Maintain
Good market
value
The present
performance
measures
associated to the
financial practices
clearly show that
the company is
able to generate a
high amount of
market value.
The present
target for Air
Arabia would be
to increase the
market value
metrics by 20%
every year.
The different types of
initiatives to achieve
the targets of market
value is seen with
optimizing the costs
incurred. This will be
able to ensure
achievement of the
best results for the
airline.
Increased
revenue
generated per
seat
It can be clearly
depicted from the
operational figures
that the airliner
has increased
revenue per seat
and improve upon
plane leasing cost.
AirArabia aims
to increase the
revenue per seat
by 20%
annually.
Furthermore, the
plane leasing
cost provision is
The achievement of
targets is related to
plane leasing cost and
seat revenue can be
seen with
standardizing the
planes used by Air
Arabia (Rezaeianjam

There has been a
significant
improvement in
revenue generated
per seat compared
to the previous
year
(Airarabia.com
2018).
aimed to be
increased by 5%
every year.
and Mohammadian
2018).
Internal Process
Maintaining a
stable on
ground time
and on-time
departure.
The different types
of performance
measures
associated to the
internal process is
seen with
maintaining a
stable on ground
time and on-time
departure.
The targets set
for the on-
ground time is
depicted to be
less than 25
minutes and the
target selected
for on-time
departure is set
with 93% for the
next financial
year
(Airarabia.com
2018).
The different types of
initiatives in order to
achieve the target of
on ground time and
on-time departure can
be seen by
maintaining an
optimal program for
cycle time (Waldfogel
and Vaaler 2017).

Learning and growth
Ground Crew
Training
The different types
of initiatives
associated to
learning and
growth aspect at
present can be
directly inferred
with focusing on
ground crew
training.
Despite of the
significant
nature of
initiatives taken
towards ground
crew
stockholders and
ground crew
training, the
company further
aims to increase
the yearly
forecasts
(Airarabia.com
2018).
The improvement
objectives pertaining
to learning and
growth perspective is
to be segregated into
three segments. This
relates to creating
long-term growth and
improvement,
enriching and play
capabilities,
contributing to
information system,
abilities and finally
aligning and improve
being the overall
capacity of the
business. This
perspective is
particularly useful for
continuously
changing and
improving the present
system of operations
maintained by the
airliner.

Employee
Enrichment
Air Arabia also
decided to invest
considerably
towards the
enrichment of
employee’s skills,
IT systems and
overall alignment
to improve the
performance of the
employees
(Airarabia.com
2018).
Air Arabia aims
to increase the
ground
stockholder’s
percentage by
70% in the first
year, 90% in the
fourth year and
hundred percent
in the sixth year
for better growth
of the
employees.
The company can also
put focus on the
objectives of
improving learning
and growth
perspective by
increasing the success
rates of total number
of projects, total
percentage of ground
crew trained and
number of customers
served for employee
(Morrison and Mason
2016).
A notable feature of the balanced scorecard needs to show the connection of performance
with the strategy. Selected measures should be able to demonstrate the objectives and strategies
which will contribute to the initiatives for improvement. Therefore, a strategy map has been
prepared to depict the cause and effect relationship to link the various types of perspectives of
Air Arabia contributing to the goal of improvement (El-Din, Farag and Abouzeid, 2017). In
order to achieve the various types of objectives connected with the perspectives of balanced
scorecard the following strategy map has been prepared.

Figure: BSC Strategy Map for Air Arabia
(Source: As created by the Author)
The Balanced Score Card of Ryanair
Perspective Objectives Measure Targets Initiatives
Customer Perspective
Maintaining
Lowest
Fares
Optimizing fares
with “Expected
Marginal Seat
Revenue
(EMSR)”
Better
Customer
Experience
in the mobile
AGB Customer
Experience program
Decrease service
issue reported by 5%
The different
types of the
initiatives which
may be taken by

app the company
relates to quality
management
Financial perspective
Increase
Revenue
Increased Revenue
by 8% from 2017 to
2018
Increase Revenue by
10% from 2018 to
2019
Minimize
revenue leakage
through
increased
efficiency
Increase
Profit After
Tax
Increased PAT by
10% from 2017 to
2018
Increase PAT by
25% from 2018 to
2019
Putting more
focus on areas of
expansion
Increase
Earnings Per
Share
Increased EPS by
15% from 2017 to
2018
(Investor.ryanair.com
2018)
Increase EPS by 17%
from 2018 to 2019
Better
stakeholder
notification of
the benefits
Internal Process
Increase
Schedule
Traffic
Increased by 9%
from 2017 to 2018
Increase Schedule
Traffic by 11% from
2018 to 2019
(Investor.ryanair.com
2018)
Improving
service delivery
through in-flight
ground and
customers

Fleet Year
End
Increased by 13%
from 2017 to 2018
Increase fleet year
end by 13% from
2018 to 2019
Incorporating
technology via
unified and
connected
systems
Average
Team Nos.
Increased by 14 %
from 2017 to 2018
Increase Average
Team Nos. by 14 %
from 2018 to 2019
Distribution:
Channel shift
and website
capabilities
Learning and growth
Custom
Type
Training for
specific
aircrafts
Provides “CAA147
approved theory”
and “practical
Boeing 737-NG and
Learjet 45 type
training” places for
over 220 engineers
(Training – Ryanair
2018).
Preparing for
delivery of training
for Boeing 737 MAX
in 2019 (Training –
Ryanair 2018).
Organizing more
training for new
airliners
Using direct competition as a means of evaluating the performance
The use of direct competition is identified as considering business offering similar
products and services to the clients within the same territory. At present the competitors of Air
Arabia includes other players in the industry such as Oman Air, flydubai, Qatar Airways, Etihad

Airways, Emirates Airlines and Gulf Air. In case direct competition is used with Air Arabia then
it needs to be discerned that the company has performed poorly in terms of its contemporaries.
For instance, Etihad Airways is considered as the national airline of UAE which is mostly owned
by the government after the pioneering second-best airlines known as Emirates airlines
(Akamavi et al. 2015). Therefore, both Etihad Airways and Emirates Airlines can be considered
as direct competition with the airliner. Emirates airlines is not only one of the fastest growing
airlines in the world but also it has a bigger terminal space compared to Air Arabia. The rapid
development of the reason in the country has brought several ramifications in the airline
industry. This is further toughened the competition for Air Arabia. In order to flourish like the
other direct competitors, it needs similar amount of support from the government of the UAE. In
addition to this, it needs to also focus on quality of the services offered and improvement in on
flight experience besides offering the customer’s and economic pricing for the services (Suau-
Sanchez, Voltes-Dorta and Rodríguez-Déniz 2016).
Comparative Analysis between the airlines
When the income statements of both the airlines are compared for three years, it could be
stated that lower revenue fluctuations are observed in Ryanair and its performance is deemed to
be more consistent than Air Arabia. This is mainly owing to a range of factors such as the
operations of Ryanair in a stable geopolitical environment, favorable brand image in the market.
On the other hand, the regions of Air Arabia are reliant on the fuel sector and hence, it is highly
sensitive to changes in the prices of fuel (Ibn-Homaid and Tijani 2015). In all the three years,
both the organizations have succeeded in earning profit. The gross margin and net margin for
Ryanair are observed to be more than those of Air Arabia.
In 2015, Ryanair has experienced increased profit compared to the previous year; the
situation is not similar in case of Air Arabia. The fall in fuel prices for the year assisted Ryanair

in attaining increased profits by minimizing operational costs (Martin 2016). However, for Air
Arabia, the fall in fuel prices has minimized the economic performance of the region and this has
adverse impact on the yield margins of the airline. As a result, the profitability of the airline has
fallen compared to the past year.
In 2016, financial growth has been experienced by Ryanair, while Air Arabia has made
poor financial performance in the same year. The decline in fuel prices has the similar effect to
that of the past year. On the contrary, Air Arabia has experienced aviation market, which is
above the desired capacity. Therefore, this competitive advantage has assisted Ryanair in
increasing net margin and gross margin in three years owing to the fall in oil prices as well as
increasing the seat load factors.
In 2017, the net margin of Ryanair has experienced a decline. This is due to the increased
threats to regional security that have influenced air travel in Europe. Another reason could be
identified in the rise of rivalry from the Egyptian charters as well as the charters from North
Africa, Portugal, Spain and Turkey (Petty et al. 2015). In addition, the airline has been hit
severely due to the devaluation of British pound that took place in the second quarter of 2016.
On the contrary, Air Arabia has experienced success in 2017. The economic performance of the
region has been seeing a revival after numerous years and this has increased to greater load
factors and yield margins.
After evaluating the balance sheet statements for both the airlines, it has been evaluated
that Ryanair is enjoying competitive edge over Air Arabia, as it has generated more profits from
its asset base. Despite the fact that there is not much substantial variation in the values of total
assets, considerable difference could be observed in case of return on assets. This implies that
Ryanair has made higher net income than Air Arabia for the years by utilizing its assets in an
effective manner (Karadag 2015). For instance, Ryanair has used 380 aircrafts by carrying 120

million passengers, while Air Arabia has a fleet of 50 aircrafts by carrying 8.5 million
passengers. There are a number of reasons owing to these factors. The primary reason is that
Ryanair has a long-term brand reputation in the market compared to Air Arabia and therefore, it
has more loyal customers than the latter.
In addition, when the operating markets of both the airlines are taken into consideration,
the population of Europe is nearly 741 million, while the Middle East has a population of 420
million (McKinney 2015). As a result, large numbers of individuals could access Ryanair and
this has assisted in accomplishing increased load factors. Another reason might be the wide
network of Ryanair. In 2017, the network of the airline covered above 1,500 routes, while the
network of Air Arabia includes 150 routes. If the accessibility is wider, customer reach is
increased and hence, it works towards increasing usage of the aircrafts and loads (Nobes 2014).
Finally, Ryanair is involved in operating flights having shorter average flying time compared to
the flights that Air Arabia operates. This clearly implies that the aircrafts of Ryanair has the
capability of performing more trips than Air Arabia leading to better usage of aircrafts for the
former.
Conclusion
The comparison of various perspective of ratio analysis shows that profitability ratio of
both the companies have been represented with the linear growth in terms of net profit margin
and gross profit margin. However, with an increase of 12.97% to 16.88% in terms of net profit
margin, Air Arabia is clearly better than Ryanair. The comparison of the liquidity ratio shows
that current ratio of Ryanair stands to be more satisfactory in compared to Air Arabia. Despite of
this, when comparing the performance of the company in terms of cash ratio Air Arabia has been
clearly able to maintain a lower repayment status to the creditors thereby excelling in this
parameter. The determination of efficiency ratios has shown a slightly better performance for

Ryan Air. This is evident with maintaining better revenue per passenger kilometer and the
turnover ratios. Therefore, it can be stated that when comparing financial parameters such as
profitability, leverage and loans to capital employed Air Arabia is clearly in a better position.
However, when parameters such as efficiency is concerned, Ryan Air is a clear winner. The
present invention performance indicators of Air Arabia show that it is able to generate a high
amount of market value. It can be clearly depicted from the revenue figures that the airliner has
increased revenue per seat and improved substantially upon maintaining a lower plane leasing
cost.
Recommendations
The focus on improving the customer service is to identified with increasing the sales
revenues by 15%. In order to achieve this target Air Arabia needs to increase its customer base
and improve the overall turnaround time. In addition to this, the airline has also aimed to achieve
95% customer satisfaction level. In order to achieve such an objective, the improvements need
the brought by building upon customer loyalty program. The company should put an end to focus
on increasing the market value metrics by 20% every year. Furthermore, it should also aim to
increase the revenue per seat by 20% annually. Air Arabia needs to focus on improving the
internal processes by taking appropriate initiatives in order to achieve the target of on ground
time and on-time departure to less than 25 minutes. This needs to be achieved by the airliner by
maintaining an optimal program for cycle time. The initiatives to achieve the targets of market
value is also seen with optimizing the costs incurred. The success factor of both the airliners
need to be identified with making the most of tourism industry with a very dynamic leadership to
back up the investments. The various areas of improvement as per the financial measures used to
be also depicted as per improving the present return on capital employed, Market value and

Value per share. In addition to this, it needs to also take the advantage of strong economic
growth in both the countries.
In case of Ryanair, 2016 yielded the highest ratios although it did not yield the highest
revenue. It is inferred from the balance sheet in 2016 to support the fact this is credited to the fact
that Ryanair sold its holding in Aer Lingus in that year. Therefore, in order to ensure that that the
airliner is able to sustain continued revenue generation in the future years it needs to ensure
minimizing revenue leakage through increased efficiency. This can be done by emphasizing on
some of the other measures such as putting more focus on areas of expansion by increasing its
existing fleet of 49 aircraft. This would allow the airliner to achieve growth targets of 25% per
annum. There have been reductions in short-term and long-term borrowings for both the airlines
in 2017 and decline in bank loans has minimized the interest expenses for interest bearing loans
by 15.49% for Ryanair. In order to improve this, the airliner needs to take specific measures
associated to increase EPS. This will allow the company to rely more on equity capital rather
than long term liabilities which generates high amount of interest.

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List of Appendix
Ratio Analysis
Profitability Ratios:
Particulars 2017 2016 2015 2017 2016 2015
$m $m $m $m $m $m
Profit for the year A 1316.0 1559.0 867.0 631.0 490.0 511.0
Revenue B 6648.0 6536.0 5654.0 3739.0 3778.0 3826.0
Total Assets C 11990.0 11218.0 12185.0 12964.0 12513.0 11399.0
Total Equity D 4423.0 3597.0 4035.0 6036.0 5443.0 4962.0
Gross Profit I 1856.0 1753.0 1277.0 349.0 262.0 366.0
Capital Employed J 1694 1452 2396 993 559 282
Net Profit Margin E= A/B 19.80% 23.85% 15.33% 16.88% 12.97% 13.36%
Return on Equity (ROE) F=A/D 30% 43% 21% 10% 9% 10%
Return on Capital Employed (ROCE) G=A/J 78% 107% 36% 64% 88% 181%
Gross Profit Margin H=I/B 28% 27% 23% 9% 7% 10%
Ryanair AirArabia
Liquidity Ratios:
Particulars 2017 2016 2015 2017 2016 2015
$m $m $m $m $m $m
Current Assets A 4706.0 4822.0 5742.0 589.0 575.0 517.0
Current Liabilities B 3012.0 3370.0 3346.0 2197.0 2323.0 2196.0
Inventory C 3.000 3.000 2.000 17.0 16.0 17.0
Prepayments & Other Assets D 0.0 0.0 0.0 0.0 0.0 0.0
Cash & Cash equivalents E 1224.0 1259.0 1185.0 2048.0 1819.0 1599.0
Current Ratio F=A/B 1.56 1.43 1.72 0.27 0.25 0.24
Cash Ratio H=E/B 0.41 0.37 0.35 0.93 0.78 0.73
Ryanair AirArabia
Efficiency Ratio:
Particulars` 2017 2016 2015 2017 2016 2015
$m $m $m $m $m $m
Total Assets A 11990.0 11218.0 12185.0 12964.0 12513.0 11399.0
Fixed Assets B 7214.0 6262.0 5471.0 7541.0 7407.0 6698.0
Revenue C 6648.0 6536.0 5654.0 3739.0 3778.0 3826.0
Trade & Other Receivables D 0.5 0.6 0.5 1.7 1.7 2.0
Total Kilometer travelled (million) H 84.2 81.3 80.2 62.3 54.9 51.2
Total Trips Completed J 2556 2411 2365 2640 2400 2365
Total Asset Turnover Ratio E=C/A 0.55 0.58 0.46 0.29 0.30 0.34
Fixed Asset Turnover Ratio F=C/B 0.92 1.04 1.03 0.50 0.51 0.57
Debtor Turnover Ratio G=C/D 0.01% 0.01% 0.01% 0.05% 0.04% 0.05%
Revenue per Passenger Kilometers I=A/H 79.0 80.4 70.5 60.0 68.8 74.7
Ryanair AirArabia
Gearing Ratio
Particulars 2017 2016 2015 2017 2016 2015
$m $m $m $m $m $m
Total Liabilities (Long-Term) A 7567.0 7621.0 8150.0 6928.0 7070.0 6437.0
Capital Employed B 1694.0 1452.0 2396.0 993.0 559.0 282.0
Interest Cover C 22.9 25.2 14.2 6.6 6.6 8.2
Loans-To-Capital Employed E= A/B 4.5 5.2 3.4 7.0 12.6 22.8
Interest Cover F=A/D 22.88 25.21 14.24 6.57 6.62 8.15
Ryanair AirArabia

2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0.00
5.00
10.00
15.00
20.00
25.00
30.00
22.88
25.21
14.24
6.57 6.62 8.15
Interest Cover
2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0.0
5.0
10.0
15.0
20.0
25.0
4.5 5.2
3.4
7.0
12.6
22.8
Loans-To-Capital Employed

2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0.00%
0.01%
0.02%
0.03%
0.04%
0.05%
0.06%
0.01% 0.01% 0.01%
0.05% 0.04%
0.05%
Debtor Turnover Ratio
2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
0.41 0.37 0.35
0.93
0.78 0.73
Cash Ratio

2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
1.56
1.43
1.72
0.27 0.25 0.24
Current Ratio
2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
78%
107%
36%
64%
88%
181%
Return on Capital Employed (ROCE)

2017 2016 2015 2017 2016 2015
Ryanair AirArabia
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
30%
43%
21%
10% 9% 10%
Return on Equity (ROE)
Horizontal Analysis
P artic ulars 2015 (in million €) 2016 (in million €) P erc e nt c hang e2017 (in million €) P erc e nt c hang e
R evenue 5,654 6,536 15.60% 7,564 15.73%
C os t of revenue 4,377 4,783 9.28% 5,530 15.62%
G ros s profit 1,277 1,753 37.27% 2,034 16.03%
O perating expens es
S ales , General and adminis trative 234 293 25.21% 443 51.19%
T otal operating expens es 234 293 25.21% 443 51.19%
O perating income 1,043 1,460 39.98% 1,590 8.90%
Interes t E xpens e 74 71 -4.05% 60 -15.49%
O ther inc ome (expens e) 14 333 2278.57% 102- -130.63%
Inc ome before income taxes 982 1,722 75.36% 1,429 -17.02%
P rovis ion for inc ome taxes 116 163 40.52% 121 -25.77%
Net inc ome from continuing ops 867 1,559 79.82% 1,308 -16.10%
Net inc ome 867 1,559 79.82% 1,308 -16.10%
Net inc ome av ailable to c ommon s hare holders 867 1,559 79.82% 1,308 -16.10%
E arning s pe r s hare
B as ic 3.21 5.81 81.00% 5.70 -1.89%
D iluted 3.20 5.78 80.63% 5.66 -2.08%
Inc ome S tatement of R yanair:-

P artic ulars 2015 (in million €) 2016 (in million €) P erc ent c hang e2017 (in million €) P erc ent c hang e
As s ets
C urrent as s ets
C as h
C as h and c as h equivalents 1,185 1,259 6.24% 1,224 -2.78%
S hort-term inves tments 3,605 3,062 -15.06% 2,904 -5.16%
T otal c as h 4,789 4,322 -9.75% 4,128 -4.49%
R es tric ted c as h 7 13 85.71% 12 -7.69%
Inventories 2 3 50.00% 3 0.00%
P repaid expens es 134 145 8.21% 221 52.41%
O ther c urrent as s ets 810 339 -58.15% 342 0.88%
T otal c urrent as s ets 5,742 4,822 -16.02% 4,706 -2.41%
Non-c urrent as s ets
P roperty, plant and equipment
Gros s property, plant and equipment 7,682 8,824 14.87% 10,220 15.82%
Ac c umulated D eprec iation 2,210- 2,562- 15.93% 3,007- 17.37%
Net property, plant and equipment 5,471 6,262 14.46% 7,214 15.20%
Intangible as s ets 47 47 0.00% 47 0.00%
O ther long-term as s ets 926 88 -90.50% 23 -73.86%
T otal non-c urrent as s ets 6,443 6,397 -0.71% 7,284 13.87%
T otal as s ets 12,185 11,218 -7.94% 11,990 6.88%
L iabilities and s toc kholders ' equity
L iabilities
C urrent liabilities
C apital leas es 400 450 12.50% 456 1.33%
Ac c ounts payable 196 231 17.86% 294 27.27%
T axes payable 433 537 24.02% 579 7.82%
O ther c urrent liabilities 2,317 2,152 -7.12% 1,682 -21.84%
T otal c urrent liabilities 3,346 3,370 0.72% 3,012 -10.62%
Non-c urrent liabilities
D eferred taxes liabilities 462 386 -16.45% 473 22.54%
O ther long-term liabilities 4,342 3,866 -10.96% 4,082 5.59%
T otal non-c urrent liabilities 4,804 4,252 -11.49% 4,555 7.13%
T otal liabilities 8,150 7,622 -6.48% 7,567 -0.72%
S toc kholders ' equity
C ommon s toc k 9 8 -11.11% 7 -12.50%
Additional paid-in c apital 719 719 0.00% 719 0.00%
R etained earnings 2,706 3,166 17.00% 3,457 9.19%
Ac c umulated other c omprehens ive inc ome 602 296- -149.17% 240 -181.08%
T otal s toc kholders ' equity 4,035 3,597 -10.86% 4,423 22.96%
T otal liabilities and s toc kholders ' equity 12,185 11,218 -7.94% 11,990 6.88%
B alanc e S heet S tatement of R yanair:-
P artic ulars 2015 (in million €) 2016 (in million €) P erc e nt c hang e2017 (in million €) P erc e nt c hang e
R evenue 3,826 3,778 -1.25% 3,739 -1.03%
C os t of revenue 3,150 3,298 4.70% 3,106 -5.82%
G ros s profit 676 480 -28.99% 633 31.88%
O perating expens es
S ales , G eneral and adminis trative 112 115 2.68% 112 -2.61%
O ther operating expens es 40
T otal ope rating expens es 112 115 2.68% 152 32.17%
O perating inc ome 564 365 -35.28% 481 31.78%
Interes t E xpens e 74 91 22.97% 119 30.77%
O ther inc ome (expens e) 41 234 470.73% 300 28.21%
Inc ome before inc ome taxes 531 509 -4.14% 662 30.06%
Net inc ome from c ontinuing ope rations 531 509 -4.14% 662 30.06%
O ther 19- 18- -5.26% 32- 77.78%
Net inc ome 511 490 -4.11% 631 28.78%
Net inc ome av ailable to c ommon s hare holders 511 490 -4.11% 631 28.78%
E arning s per s hare
B as ic 0.11 0.11 0.00% 0.14 27.27%
D iluted 0.11 0.11 0.00% 0.14 27.27%
Inc ome S tateme nt of Air Arabia:-

P artic ulars 2015 (in million €) 2016 (in million €) P erc e nt c hang e2017 (in million €) P erc e nt c hang e
As s ets
C urrent as s ets
C as h
C as h and c as h equivalents 1,599 1,819 13.76% 2,048 12.59%
S hort-term inves tments 334 459 37.43% 528 15.03%
T otal c as h 1,932 2,278 17.91% 2,575 13.04%
Inventories 17 16 -5.88% 17 6.25%
P repaid expens es 12 13 8.33% 10 -23.08%
O ther c urrent as s ets 517 575 11.22% 589 2.43%
T otal c urre nt as s e ts 2,478 2,882 16.30% 3,191 10.72%
Non-c urre nt as s ets
P roperty, plant and equipment
G ros s property, plant and equipment 7,980 9,127 14.37% 9,746 6.78%
Ac c umulated D eprec iation 1,282- 1,719- 34.09% 2,205- 28.27%
Net property, plant and equipment 6,698 7,407 10.59% 7,541 1.81%
G oodwill 199 199 0.00% 199 0.00%
Intangible as s ets 1,098 1,099 0.09% 1,101 0.18%
O ther long-term as s ets 927 925 -0.22% 933 0.86%
T otal non-c urrent as s ets 8,921 9,631 7.96% 9,773 1.47%
T otal as s e ts 11,399 12,513 9.77% 12,964 3.60%
L iabilities and s toc kholde rs ' e quity
L iabilities
C urrent liabilitie s
S hort-term debt 264 0.00% 63 -76.14%
C apital leas es 323 398 23.22% 424 6.53%
Ac c ounts payable 1,598 1,428 -10.64% 1,472 3.08%
O ther c urrent liabilities 275 233 -15.27% 238 2.15%
T otal c urre nt liabilities 2,196 2,323 5.78% 2,197 -5.42%
Non-c urre nt liabilities
C apital leas es 3,174 3,480 9.64% 3,458 -0.63%
P ens ions and other benefits 80 96 20.00% 111 15.63%
Minority interes t 36 45 25.00% 66 46.67%
O ther long-term liabilities 951 1,126 18.40% 1,094 -2.84%
T otal non-c urrent liabilities 4,241 4,746 11.91% 4,730 -0.34%
T otal liabilities 6,437 7,070 9.83% 6,927 -2.02%
S toc kholders ' equity
C ommon s toc k 4,667 4,667 0.00% 4,667 0.00%
R etained earnings 443 415 -6.32% 593 42.89%
Ac c umulated other c omprehens ive inc ome 147- 361 -345.58% 777 115.24%
T otal s toc kholde rs ' e quity 4,962 5,443 9.69% 6,036 10.89%
T otal liabilities and s toc kholders ' equity 11,399 12,513 9.77% 12,964 3.60%
B alanc e S he et S tatement of Air Arabia-
Vertical Analysis
P artic ulars 2015 (in million €) P erc e ntag e 2016 (in million €) P erc e ntag e2017 (in million €) P erc e ntag e
R evenue 5,654 100.00% 6,536 100.00% 7,564 100.00%
C os t of revenue 4,377 77.41% 4,783 73.18% 5,530 73.11%
G ros s profit 1,277 22.59% 1,753 26.82% 2,034 26.89%
O perating expens es
S ales , General and adminis trative 234 4.14% 293 4.48% 443 5.86%
T otal operating expe ns es 234 4.14% 293 4.48% 443 5.86%
O pe rating inc ome 1,043 18.45% 1,460 22.34% 1,590 21.02%
Interes t E xpens e 74 1.31% 71 1.09% 60 0.79%
O ther inc ome (expens e) 14 0.25% 333 5.09% 102- -1.35%
Inc ome be fore inc ome taxe s 982 17.37% 1,722 26.35% 1,429 18.89%
P rovis ion for inc ome taxes 116 2.05% 163 2.49% 121 1.60%
Net inc ome from c ontinuing ops 867 15.33% 1,559 23.85% 1,308 17.29%
Net inc ome 867 15.33% 1,559 23.85% 1,308 17.29%
Net inc ome av ailable to c ommon s hareholders 867 15.33% 1,559 23.85% 1,308 17.29%
Inc ome S tatement of R yanair:-

P artic ulars 2015 (in million €) P erc e ntag e 2016 (in million €) P erc e ntag e2017 (in million €) P erc e ntag e
As s ets
C urrent as s ets
C as h
C as h and c as h equivalents 1,185 20.64% 1,259 26.11% 1,224 26.01%
S hort-term inves tments 3,605 62.78% 3,062 63.50% 2,904 61.71%
T otal c as h 4,789 83.40% 4,322 89.63% 4,128 87.72%
R es tric ted c as h 7 0.12% 13 0.27% 12 0.25%
Inventories 2 0.03% 3 0.06% 3 0.06%
P repaid expens es 134 2.33% 145 3.01% 221 4.70%
O ther c urrent as s ets 810 14.11% 339 7.03% 342 7.27%
T otal c urrent as s ets 5,742 47.12% 4,822 42.98% 4,706 39.25%
Non-c urre nt as s ets
P roperty, plant and equipment
Gros s property, plant and equipment 7,682 119.23% 8,824 137.94% 10,220 140.31%
Ac c umulated D eprec iation 2,210- -34.30% 2,562- -40.05% 3,007- -41.28%
Net property, plant and equipment 5,471 84.91% 6,262 97.89% 7,214 99.04%
Intangible as s ets 47 0.73% 47 0.73% 47 0.65%
O ther long-term as s ets 926 14.37% 88 1.38% 23 0.32%
T otal non-c urrent as s e ts 6,443 52.88% 6,397 57.02% 7,284 60.75%
T otal as s e ts 12,185 100.00% 11,218 100.00% 11,990 100.00%
L iabilitie s and s toc kholders ' equity
L iabilitie s
C urrent liabilities
C apital leas es 400 11.95% 450 13.35% 456 15.14%
Ac c ounts payable 196 5.86% 231 6.85% 294 9.76%
T axes payable 433 12.94% 537 15.93% 579 19.22%
O ther c urrent liabilities 2,317 69.25% 2,152 63.86% 1,682 55.84%
T otal c urrent liabilities 3,346 41.06% 3,370 44.21% 3,012 39.80%
Non-c urrent liabilities
D eferred taxes liabilities 462 9.62% 386 9.08% 473 10.38%
O ther long-term liabilities 4,342 90.38% 3,866 90.92% 4,082 89.62%
T otal non-c urrent liabilities 4,804 58.94% 4,252 55.79% 4,555 60.20%
T otal liabilities 8,150 66.89% 7,622 67.94% 7,567 63.11%
S toc kholders ' equity
C ommon s toc k 9 0.22% 8 0.22% 7 0.16%
Additional paid-in c apital 719 17.82% 719 19.99% 719 16.26%
R etained earnings 2,706 67.06% 3,166 88.02% 3,457 78.16%
Ac c umulated other c omprehens ive inc ome 602 14.92% 296- -8.23% 240 5.43%
T otal s toc kholde rs ' e quity 4,035 33.11% 3,597 32.06% 4,423 36.89%
T otal liabilities and s toc kholders ' equity 12,185 100.00% 11,218 100.00% 11,990 100.00%
B alanc e S he et S tatement of R yanair:-
P artic ulars 2015 (in million €) P erc e ntag e 2016 (in million €) P erc e ntag e2017 (in million €) P erc e ntag e
R evenue 3,826 100.00% 3,778 100.00% 3,739 100.00%
C os t of revenue 3,150 82.33% 3,298 87.29% 3,106 83.07%
G ros s profit 676 17.67% 480 12.71% 633 16.93%
O pe rating expens es
S ales , General and adminis trative 112 2.93% 115 3.04% 112 3.00%
O ther operating expens es 0.00% 0.00% 40 1.07%
T otal operating expe ns es 112 2.93% 115 3.04% 152 4.07%
O pe rating inc ome 564 14.74% 365 9.66% 481 12.86%
Interes t E xpens e 74 1.93% 91 2.41% 119 3.18%
O ther inc ome (expens e) 41 1.07% 234 6.19% 300 8.02%
Inc ome before inc ome taxes 531 13.88% 509 13.47% 662 17.71%
Net inc ome from c ontinuing operations 531 13.88% 509 13.47% 662 17.71%
O ther 19- -0.50% 18- -0.48% 32- -0.86%
Net inc ome 511 13.36% 490 12.97% 631 16.88%
Net inc ome av ailable to c ommon s hareholders 511 13.36% 490 12.97% 631 16.88%
Inc ome S tatement of Air Arabia:-

P artic ulars 2015 (in million €) P erc e ntag e 2016 (in million €) P erc e ntag e2017 (in million €) P erc e ntag e
As s ets
C urrent as s ets
C as h
C as h and c as h equivalents 1,599 64.53% 1,819 63.12% 2,048 64.18%
S hort-term inves tments 334 13.48% 459 15.93% 528 16.55%
T otal c as h 1,932 77.97% 2,278 79.04% 2,575 80.70%
Inventories 17 0.69% 16 0.56% 17 0.53%
P repaid expens es 12 0.48% 13 0.45% 10 0.31%
O ther c urrent as s ets 517 20.86% 575 19.95% 589 18.46%
T otal c urrent as s ets 2,478 21.74% 2,882 23.03% 3,191 24.61%
Non-c urre nt as s ets
P roperty, plant and equipment
Gros s property, plant and equipment 7,980 70.01% 9,127 72.94% 9,746 75.18%
Ac c umulated D eprec iation 1,282- -14.37% 1,719- -17.85% 2,205- -22.56%
Net property, plant and equipment 6,698 75.08% 7,407 76.91% 7,541 77.16%
Goodwill 199 2.23% 199 2.07% 199 2.04%
Intangible as s ets 1,098 12.31% 1,099 11.41% 1,101 11.27%
O ther long-term as s ets 927 10.39% 925 9.60% 933 9.55%
T otal non-c urrent as s e ts 8,921 78.26% 9,631 76.97% 9,773 75.39%
T otal as s e ts 11,399 100.00% 12,513 100.00% 12,964 100.00%
L iabilitie s and s toc kholders ' equity
L iabilitie s
C urrent liabilities
S hort-term debt 264 63
C apital leas es 323 14.71% 398 17.13% 424 19.30%
Ac c ounts payable 1,598 72.77% 1,428 61.47% 1,472 67.00%
O ther c urrent liabilities 275 12.52% 233 10.03% 238 10.83%
T otal c urrent liabilities 2,196 34.12% 2,323 32.86% 2,197 31.72%
Non-c urre nt liabilitie s
C apital leas es 3,174 74.84% 3,480 73.32% 3,458 73.11%
P ens ions and other benefits 80 1.89% 96 2.02% 111 2.35%
Minority interes t 36 0.85% 45 0.95% 66 1.40%
O ther long-term liabilities 951 22.42% 1,126 23.73% 1,094 23.13%
T otal non-c urrent liabilities 4,241 65.88% 4,746 67.13% 4,730 68.28%
T otal liabilities 6,437 56.47% 7,070 56.50% 6,927 53.43%
S toc kholders ' equity
C ommon s toc k 4,667 94.05% 4,667 85.74% 4,667 77.32%
R etained earnings 443 8.93% 415 7.62% 593 9.82%
Ac c umulated other c omprehens ive inc ome 147- -2.96% 361 6.63% 777 12.87%
T otal s toc kholde rs ' e quity 4,962 43.53% 5,443 43.50% 6,036 46.56%
T otal liabilities and s toc kholders ' equity 11,399 100.00% 12,513 100.00% 12,964 100.00%
B alanc e S he et S tatement of Air Arabia:-