FINANCIAL CRISIS

Financial Crisis

Name of Student

Name of Instructor

Date

Financial Crisis

Provide a 'real life' example of a long-term external source of finance used by a UK listed company. Describe the nature of this financial arrangement (e.g. purpose, duration, risk assessment

Ryanair operates a low-fares scheduled traveller airline assisting short-haul, point-to-point paths in Europe. It's been in operation since 1985 and pioneered the low fares operation model by the 1990s. According to statistics got from the company's website, its Europe's large-scale low fares airline, the most thriving and dynamic as well as the number one in clientele service. This is evidence in the detail that it has consistently accomplished a aggregate annual development of 20% since 1991 with a present market capitalisation of 5bn, ahead of British Airways ( 4.3bn), Lufthansa ( 4.7bn) and Air France/KLM ( 3.5bn), and with statistics in clientele service of 93.2% on time departures, 0.64% of sacks missing per 1000 passengers and 99.8% on air travel completions.

Ryanair, since going into new paths in 1991 has experienced tremendous boost in its traveller numbers; from 1.7million to roughly 4.6 million travellers in 2004. Although a variety of components assisted to this increase, management accepts as true that it was precipitated by its reduced fares policy and its good clientele service statistics of fewer hold ups, fewer lost sacks and better on-time air travel punctuality. As a outcome, its principle objective has been to firmly establish itself as Europe's premier low-fares arranged traveller airline through relentless enhancement and increasing of offerings of its low-fares service. They aim to develop advanced traveller traffic while at the identical time containing cost and functioning inefficiencies. Its major focus, however, is on expanding shareholder worth and encouraging growth.

The latest rise in oil charges has commanded the company to focus hard-hitting on reducing cost. Fuel cost doubled in the fiscal year completed stride 31, 2005 to 237m and accounted for 26.3% of Ryanair's total total costs. Eventually, they need to aim on reducing cost in other operational localities, so as to counteract fuel costs in the future. In supplement, the business has determined to hedge its requirement for the remainder of the fiscal year till March 2006. It would apparently need to supervise fuel charges with a view to hedging for summer 2006.

Ryanair is furthermore committed to safety and value maintenance. Its administration over the years have granted main concern to this area. Commitment involves teaching pilots, cabin crew, upkeep staff and also, sustaining its aircraft in agreement with the highest European airline commerce standards. As cited in its website, it hasn't had a single occurrence engaging injury to travellers and air travel crew and there is no guarantee that this can not happen. Although it seeks to function in a cost-effective manner, it carries out routine airplane upkeep and fix services at its diverse bases. It actually contracts heavy airframe upkeep, engine overhaul services and rotable fixes to contractors, who furthermore supply services for British airways and Aer Lingus.

Ryanair is also pledged to taking benefit of the internet ...