COMPARATIVE FINANCIAL ANALYSIS

Comparative Financial Analysis



Comparative Financial Analysis

Introduction

Airline or airlines are organizations that are engaged in transportation of passengers or cargo, and in some cases, animals and aircraft. The world airline is complex. There are companies that are engaged in transporting passengers and cargo on a regular basis, while there are also other companies that transport their clients or groups of customers in a timely manner agreed between them.

In this paper, we will compare the financial statements of the four different airlines of different countries and provide them recommendation in order to improve their financial situation. These four airlines are Singapore Airlines, Emirates Airlines, British Airways and Ryanair and they are the well performing airlines in their respected countries.

Discussion

In order to do the comparative analysis, the financial statements of these companies have been analyzed in depth so that proper recommendation can be provided to these companies. The highlighted data such as sales, net income, assets investment and other major accounts has been taken to interpret their five years performances.

Comparative Analysis

The sales of these four airlines have partial increased and decreased. However, the sales of British airways sales decreased at an annualized rate of 2.1% over the five years to March 2010, which is a worse performance than 4.1% yearly increase for the global industry as a whole (current prices). As compared to other Singapore Airlines, Emirates Airlines and Ryanair their sales grew approximately 6.0%, 5% and 3% respectively per annum over the five years through 2010. This was faster than the global industry (current prices) (www.emirates.com). However, Ryanair able to gained market share.

Moreover, British Airways has underperformed the Global Passenger Airlines industry, it is likely to have lost market share since 2005. Nevertheless, Emirates Airlines managed a 4.2% operating profit margin in 2010, recovering from the 22.0% operating profit loss in 2008. Passenger revenue exclusively has performed more favorably, recording a contraction of 1.7% per year for British airways. The main reasons for a poorer performance include the mature airline market in the United Kingdom and restrictions to expand domestically. As the developing world is currently experiencing a boom in demand for flying, the United Kingdom in comparison is growing at a very slow rate. British Airways accounts for 1.4% of total passengers, with the number of passengers flying with the company decreasing at 2.3% per annum (www.britishairways.com/).

Hence, these four company assets such as purchasing the airplane cargo increased at an annualized rate of 4.4% over the five years through March 2010. Passenger revenue experienced a similar rate of growth, expanding at 3.9% per annum. Emirates were able to attract business in the few years before 2008, when sales began to level off due to poor demand conditions. High fuel prices and rising airfares during 2008 effect the financial performance of the Singapore airline badly also deterred passengers. The strong growth of the Ryanair is also due to the depreciation of the US dollar (as revenue figures have been exchanged from euros to US dollars) along ...