Analysis of Airline Commercial Performance: Ryanair vs. Easyjet Report

This report presents a comparative analysis of the commercial performance of Ryanair and Easyjet airlines, focusing on the key revenue management metrics and strategies employed by each carrier. The report begins with an introduction to commercial performance, defining its significance in terms of revenue generation, profitability, and customer satisfaction. The core of the report involves a detailed comparison of Ryanair and Easyjet, utilizing metrics such as Available Seat Miles (ASM), Load Factor, Passenger Revenue per ASM, Total Expenses and Cost per ASM, and Revenue Passenger Miles (RPM). The analysis reveals that Ryanair generally outperforms Easyjet in several key metrics, including cost efficiency and revenue generation. The report further examines how both airlines manage their revenue and costs, including dynamic pricing models, yield management, and cost-reduction strategies such as controlling delays and maintenance. The final section offers recommendations to enhance the commercial performance of both airlines, suggesting improvements in customer service, technological upgrades, and data-driven decision-making. The report concludes with a summary of the findings, highlighting the importance of strategic management in the competitive airline industry.

Case Study

Contents
INTRODUCTION...........................................................................................................................1
Task .................................................................................................................................................1
Comparison of the commercial performance between two airlines known as Ryanair airlines
and ...............................................................................................................................................1
Easyjet airlines ...........................................................................................................................1
How both the airlines manages their revenue and costs..............................................................2
Recommendation to strengthen and improves both the airlines commercial performance ........3
Conclusion .....................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Commercial performance is defined as to acquiring a higher returns, maximum profit and
increases earning sources with the base at its sources (Mikhaylov and Jung., 2021). It not only
focuses on revenue and profit but also concern about customer loyalty and satisfaction. This
report includes about two British based airlines reports in which comparing the performance of
particular year from last five years. Here, report further includes about key revenue management
metrics of both the airlines and additionally how they manage their revenues and costs. This
report is based after analysis of their annual report of chosen year and some of the available
journal about both of the airlines.
Task
Comparison of the commercial performance between two airlines known as Ryanair airlines and
Easyjet airlines
Here comparing and contrasting the commercial performance between two British airlines which
is Ryanair and Easyjet airlines through some of the key revenue management metrics. For
comparing, Key performance indicators (KPI) are the most significant business metrics for a
industry where money maker find a way for an investment edge (Bondoux and et.al., 2020).
Mentioned below is some of the airline KPIs are:
 Available seat miles (ASM) – It is determined by taking the distance flown and
multiplying by number of seats available.
 Load factor – It is Revenue passengers miles(RPM) convey as a ASM percentage.
 Passenger revenue per ASM – It is ascertained by dividing passenger revenue by
available seta miles.
 Total expenses and cost per ASM – It is total of expenses in accordance with available
seat miles.
 Revenue passengers miles (RPM) – It is determined by taking miles of flight and by
multiplying number of passengers.
Ryanair holding Plc airlines has Available Seat Miles(ASM) is £92353.1 millions in year 2021
while Easyjet Plc has ASM of around £90185.2millions which implies that Ryanair has flown
more distance than Easyjet and they also has more seats available in 2021 than Easyjet.
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In terms of load factor, Ryanair holding Plc has load factor expressed in percentage is 82.0 in
Year 2021 while Easyjet Plc has load factor of about 72.3% which signifies that Ryanair Plc has
more capacity available of their passengers.
The third metric where commercial performance can be compared is passengers revenue per
available seat mile (Kovalenko, 2021). Ryanair holding Plc has $cents of around 12.1 in 2021
whereas Easyjet has $sent11.6 in same year. Here, it means that Ryanair has more passenger
revenue per mile flown in compare to Easyjet airlines.
The fourth metric where comparison between two airlines took place is total cost per available
seat mile in which Ryanair airline has incurred cost in 2021 about $cents of 6.3 while Easyjet has
occurred in same year of about $cents6.8 which implies that Ryanair airlines has most cheapest
flight than Easyjet airlines.
The fifth metric to be used in commercial performance is passenger revenue miles where Ryanair
airlines has generated revenue of $2935.5 millions. On other hand, Easyjet airlines has generated
low revenue of $1458 millions in compare to Ryanair airlines which means they are superior
airlines by leading in terms of passenger revenue.
Overall commercial comparison between Ryanair airline and Easyjet airlines where both the
airlines are low cost carrier and compared for same years. By analysis above comparison, the
result of key revenue metrics of these two airlines is Ryanair airlines has worked more efficiently
in terms of cost, revenue, load factor and available seat miles when compare to Easyjet airlines.
How both the airlines manages their revenue and costs
In the business of airlines, profit maximization is acquired from each flight is purely related to
increasing its revenues as many cost incurred are fixed in the short term. Low cost carriers
generally uses dynamic pricing model while full cost carrier selects price discrimination
techniques which is based on different class fares. Ryanair airlines has recently adopted revenue
management system. In execution of this system Ryanair executives believes that timing need to
be right for obtaining third party review so that to know which area need to be improved. On the
other hand, Easyjet has recently adopted yield management which signifies maximizing revenue
on each flight that are flown each day. Easyjet reservation system is different from its
competitors. This yield management system is modified regularly and it cover every route (Raza,
Ashrafi and Akgunduz, 2020). Overall aim of maximising revenue while ensuring appropriate
passengers is met.
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Ryanair airlines manages its cost in very efficient manners like Reduce delay related costs in
which they have to incur expenditure whenever a flight is delayed consists of staff costs, airport
fixed cost and compensation. This airline find out the one more way to reduce its cost is control
aircraft maintenance which signifies that airline performs repair and maintenance. So as to
ensure that aircraft meet quality standards and safety norms. Easyjet airline follow the system of
reducing cost is they set benchmarks and tracking of their expenses in which year to year
examination to be drawn which is to improve expenses of future and margin of profits
(Sukhorukov and et.al., 2019). Easyjet airlines also focuses on insurance cost where underwriter
offers a better rate to this airline as they do not incur huge investment.
Recommendation to strengthen and improves both the airlines commercial performance
Both the competitors are operating over the last few decades in airline industry but lacking in
their commercial performance. They need to work efficiently and in differentiate manner from
each other to strengthen their economical performance. Ryanair airlines need to critically focuses
on their aircraft's interior goods in which they need to put in high quality interior goods that can
take them to the next level. They also need to concentrate on improve customer services where
people often worried about missing flights, altitude anxiety and many more. For this, Ryanair
should has friendly staff, professional employees and to handle their grievance promptly. One
more action, Ryanair can do is go through with passengers who recently flew as to ask about
their experience, they dislike about the flight and what is the ways to improve their performance.
On other hand, Easyjet airline need to be more focused as they lack in every metric of
commercial performance in compare to Ryanair airline. For enhancing their performance, there
is many ways in which they can strengthen themselves. First, they keep their staff in loop in
which Easyjet share their vision with employees which help them to track and achieve in the
results. Further, Easyjet required to be constantly communicate their plans so staff know in
advance how they have to work efficiently. Secondly Easyjet should required to upgrade their
tech and implement new digital technologies like their centralised system and cloud services.
And they need to maintain their aircraft up to date through repair and maintenance so they should
not face any delay or avoid emergency stoppage. Thirdly Easyjet is required to turn their data in
intelligence as Alaska airlines usage data analytics to make prompt changes and help them in
strengthen their operation. To support in this effort, Alaska grasp weekly System operational
performance leadership (OPL) meetings (Tikani, Honarvar and Mehrjerdi, 2018). By
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implementing these recommendation, they can improve their commercial performance in terms
of every management metrics.
Conclusion
This report has the commercial comparison between two airlines that is Ryanair airlines and
Easyjet airlines. Economical comparison is taken place in accordance to key revenue
management metrics such as load factor, available seat miles, revenue per passenger and
expenses and cost per passengers. Further, report contain about how both the airlines manages
their revenue and costs. Additionally, last sub section includes ways to strengthen and improve
commercial performance of both the airlines.
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REFERENCES
An, J., Mikhaylov, A. and Jung, S.U., 2021. A linear programming approach for robust network
revenue management in the airline industry. Journal of Air Transport Management. 91.
p.101979.
Bondoux, N. and et.al., 2020. Reinforcement learning applied to airline revenue
management. Journal of Revenue and Pricing Management. 19(5). pp.332-348.
Kovalenko, N., 2021. Information management as an element of increasing the efficiency of the
airline corporate activity.
Raza, S.A., Ashrafi, R. and Akgunduz, A., 2020. A bibliometric analysis of revenue
management in airline industry. Journal of Revenue and Pricing Management. 19(6).
pp.436-465.
Sukhorukov, A. and et.al., 2019, May. Digital transformation of airline management as the basis
of innovative development. In International Scientific Siberian Transport Forum (pp.
845-854). Springer, Cham.
Tikani, H., Honarvar, M. and Mehrjerdi, Y.Z., 2018. Developing an integrated hub location and
revenue management model considering multi-classes of customers in the airline
industry. Computational and Applied Mathematics. 37(3). pp.3334-3364.
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