Comparative Financial Analysis of Airline Companies: A Detailed Report

This report presents a financial analysis of two airline companies, Preisleicht and Vipluft, examining their revenues, expenses, Revenue per Available Seat Kilometer (RASK), and Cost per Available Seat Kilometer (CASK). The analysis reveals that Vipluft demonstrates stronger financial performance due to higher revenues, despite also having higher costs. Furthermore, the report compares the financial data of British Airways and Jet2 Airways, focusing on revenues, finance costs, profit, and earnings per share to highlight performance differences. The comparison shows significant variations in revenue, finance costs, and profitability, indicating varying levels of market share and operational efficiency between the two companies. The conclusion emphasizes the impact of client base and operational activities on overall financial performance, reinforcing the superior financial standing of Vipluft and British Airways based on the provided data and metrics.

Assessment

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
1 discussion of the results for revenue, expenses, RASK and CASK of both Preisleicht and Vipluft.....3
2. Comparison of result of two airline companies’ financial performance...............................................4
CONCLUSION...........................................................................................................................................5
REFERENCES............................................................................................................................................7

INTRODUCTION
The project report is based on analysis of financial information of two airline companies named
Preisleicht and Vipluft. The financial analysis is done in terms of revenues, expenses, revenue
per available seat kilometer and cost per available seat kilometer. In the further part of report,
two real life airline company’s financial data are compared in order to make better decision that
which one is better.
MAIN BODY
1 discussion of the results for revenue, expenses, RASK and CASK of both Preisleicht and
Vipluft.
Revenue: In accounting, sales refer to the income or improvement in the total assets retained by a
company from its regular operations (Antonio, de Almeida and Nunes, 2019). It is also
appropriate to refer to industrial income as sales or turnover. Many firms earn profits from
interest, dividends, or other payments. In terms of Preisleicht flight, this can be stated that
revenue is of €2975. On the other side, revenue of Vipluft flight is of €11380. This shows that
Vipluft flight has produced more number of revenues as compared to Preisleicht flight.
Expense: Expenditure is an outlay of cash to some other person or party, or some type of fortune
in general, to compensate for an object or product, or for a class of expenditures. Leasing is a
cost for a homeowner. The total expense of Preisleicht flight, their total expense is of €6367
while expense of Vipluft flight is of €7698.50. This is so because they have earned more number
of revenues due to which cost is also higher.
RASK: Revenue per usable seat-kilometer can be determined by multiplying the maximum load
with the yields to have the profit per ability rise (Qin, Zeng and Qu, 2019). To measure the broad
maximum load of the device, simply split the Revenue Passenger Kilometer per millimeter by
the Space Available. RASK for the Preisleicht flight is of €6.34. On the other hands, RASK for
Vipluft flight is of €9.59.

CASK: The Available Seat Kilometer Value is often used to calculate the overall cost reflected
in the sales price of each place for each KM of service. The smaller the CASK value will
indicate the profit is likely to access. Direct operating costs are broken by the extra option per
KM to have the CASK. The value of CASK is of €4.67 for Preisleicht flight. On the other side,
for Vipluft flight CASK is of €6.49.
Over all analysis: On the grounds of above done analysis, this can be measured that Preisleicht
flight’s performance is less than Vipluft flight. This is so because Vipluft flight’s revenue is too
higher and for this their cost is also higher compared to Preisleicht flight.
2. Comparison of result of two airline companies’ financial performance.
Comparison of financial data of British air ways and Jet 2 air ways:
British air ways Jet 2 air ways
Revenues 13021 2391.8
Finance costs 116 21.1
Profit for the year 2091 110.7
Taxation 365 23.9
Earnings per share 184.5 74.59
Revenues- In terms of sales, it can be reported that British airway revenue is £ 13021 million
(About financial data of British airways, 2020 ). The turnover of the Jet 2 Air Ways Group, but
at the other side, is £ 2391.8 million. This sales value illustrates that the output of both firms in
terms of revenue varies tremendously. For both airline firms, as well as the reason for this
disparity, it might be because of more buyers in British airways but because of lack of leverage
over various kinds of selling prices, namely buying, opening stock and closing balance.

Finance cost- The cost of funds, also includes the cost of grant funding, is the price, interest, as
well as other costs of acquiring resources for the development or purchase of land. In contrast to
the expense of funding, but at the other side, the overall cost of financing British airways is £ 116
million; the expense of financing Jet 2 airways is £ 21.1 million. It's because of the lack of
profits of both industries. In view of British airways, this can be inferred that they will have a
significant set of activities because about which the expense of finance management is higher.
As well as late fees, the price of obtaining funds from multiple sources, along with interest,
requires expenditures. Their cost financing is too smaller in comparison to Jet 2 airways, which
means that they have continued to monitor their process of purchasing funds from multiple
actions.
Net profit of year- It may be reported that British airways have a revenue of £ 2091 million with
respect to the net profit from both firms. Big businesses, on the other hand, have a net profit of £
110.7 million (About financial data of Jet airways, 2020). It shows the net profits vary and this is
due to less numbers of services, transactions, and number of users. The corporation's Jet 2
airways can concentrate on rising total sales from various activities so that its net margin will
increase efficiently.
Earnings per share- Earnings per share (EPS) are calculated as the firm’s earnings divided by the
amount of outstanding additional stock. The special majority acts as an indicator of a company's
success (Budd and Ison eds., 2020). It is common for an organization to report the EPS that is
measured for extraordinary products and potential stock dilution. The greater the EPS of a
company, the more profitable it is perceived to be. In the light of both businesses' return on
equity, it can be mentioned that the British Air Ways Group can generate earnings of 184.5 per
share. If the company will generate income of 74.59 for each portion, Jet 2 airways. It illustrates
that in contrast to EPS, there is a major distinction. It is because the profit margin and growth of
both businesses are distinct. Jet 2 Air Ways Business should concentrate on acquiring greater
market share and an economic strategy in order to achieve higher share price.
CONCLUSION
This can be inferred on the grounds of the aforementioned article that, owing to varying
percentages of clients and activities, all firms had various forms of performances. As far as

Preisleicht and Vipluft are concerned, it can be claimed that because of higher revenues, Vipluft
flight is stronger. Though British airways are good due to increased sales and return on equity in
the field of British airways and Jet 2 airway businesses, British airways are good.

REFERENCES
Antonio, N., de Almeida, A. and Nunes, L., 2019. Big data in hotel revenue management:
exploring cancellation drivers to gain insights into booking cancellation
behavior. Cornell Hospitality Quarterly, 60(4), pp.298-319.
Qin, J., Zeng, Y., Yang, X., He, Y., Wu, X. and Qu, W., 2019. Time-dependent pricing for high-
speed railway in China based on revenue management. Sustainability, 11(16), p.4272.
Budd, L. and Ison, S. eds., 2020. Air transport management: an international perspective.
Routledge.
Online:
About financial data of British airways, 2020 [online] available through :<
https://www.iairgroup.com/~/media/Files/I/IAG/annual-reports/ba/en/british-airways-plc-
annual-report-and-accounts-2018.pdf>
About financial data of Jet airways, 2020 [online] available through :<
https://www.jet2.com/News/Dart_Group_Publishes_Annual_Report_2019/>