Ryanair Holdings plc (ADR) (RYAAY)

-The business model of this company is very unique and while controversial throughout the E.U., it is changing the airline industry there. The company provides a no frills service in order to cut costs from every corner and charges for basically everything but the actual seat itself. (though customers typically spend around $50 per trip).

The company’s unique strategies:
-By using a single model aircraft, training the staff is much more efficient. Additionally, new aircraft lack seat back recliners, window shades, and seat back pockets which save hundreds of thousands of dollars per aircraft when purchased and even more due to the reduction of weight when flying
-Planes fly into second tier airports where there are low or no landing fees and service is much more efficient since it is less crowded – Ryanair usually gets paid by these airports for brining in passengers to their terminals.
-customers pay for food/beverage and management is hoping to eventually charge for cell phone usage and in flight gambling entertainment
-companies purchase the ability to repaint the exterior of each airplane in, basically turning them into giant billboards
-Its website is Europe’s most popular travel site so Ryanair receives a cut of sales when customers purchase hotels, rental cars, ect on the site.
-Even though the company slashes most of its costs, it actually pays its pilots/stewardess’s higher than industry average salaries

Ryanair outperforms all of its peers by far; producing profit margins of 19.4% compared to the industry average of 3.37% and has the strongest financials in the European airline industry. Some complaints can be found from customers concerning the poor service they received, but what can you expect when you are flying virtually for free. It’s kind of like the Walmart of the airline industry. You aren’t there for the experience; you are there to get a significantly discounted flight. Ryanair’s performance is solid so far and its business structure is revolutionizing the entire industry.