exekcabincrew
4th Jul 2017, 17:03
Hi everyone!
A question on profitability here.. I am doing a stock pitch on airlines and this came up.
What happens to the revenue of the airlines when the price of fuel goes down?
The answer seems rhetoric, but I just read in Ryanair's filing that when the fuel price went down, they decided to pass the savings to the customers in the form of lower fares.
However most reports on aviation industry say that the profits of airlines have been up mostly due to low fuel prices (so they didn't lower the fares, they just kept the difference for themselves). So.. What is the rationale here? Is Ryanair using the fuel to gain market share?
Do you know what is the rationale behind this sort of decisions? Why should an airline not take extra profits from low fuel?.. Is there a fight for market share in the European market? There is one in the Asian market, but European airlines are clearly focused on profitability, so why this move?
Do I make myself clear? Maybe my rationale is somehow wrong?
Your input would be much appreciated!
Thank you :)
A question on profitability here.. I am doing a stock pitch on airlines and this came up.
What happens to the revenue of the airlines when the price of fuel goes down?
The answer seems rhetoric, but I just read in Ryanair's filing that when the fuel price went down, they decided to pass the savings to the customers in the form of lower fares.
However most reports on aviation industry say that the profits of airlines have been up mostly due to low fuel prices (so they didn't lower the fares, they just kept the difference for themselves). So.. What is the rationale here? Is Ryanair using the fuel to gain market share?
Do you know what is the rationale behind this sort of decisions? Why should an airline not take extra profits from low fuel?.. Is there a fight for market share in the European market? There is one in the Asian market, but European airlines are clearly focused on profitability, so why this move?
Do I make myself clear? Maybe my rationale is somehow wrong?
Your input would be much appreciated!
Thank you :)