Using an AIRLINE for T8

Yes of course -the figures should be the same although the annual report usually contains the CEO or Chairman's statement and the directors' report and these are important for ascertaining the company's strategies.

And also, if the currency of the company that I used is in IDR, and the comparator company's currency is in MYR, is this still acceptable ?

@trephena Is it possible for to use competitor company with year end dec 2015 for main company with year end march 2016? it comes to 91 days

Hi everyone, I am preparing part 2 of my Rap (Topic 8), KPI section. I have following problem. I want to list and describe KPI which I will use for Ryanair and Easy Jet but the problem is that both companies use slightly different measures. For instance, Easy Jet use 'cost per seat' and ryanair 'cost per booked passanger'. So I don't have common KPIs for both companies in order to do proper comparison/analysis. Could you recommend me source where I find such. Above mentioned are taken from Fnancials. Maybe there is somewhere website where I can find same KPI for both companies.. @trephena Thank you for your input on this forum, your help is extremly useful. I try to read all your post in this thread, and helps me a lot. You are star!

bik123 - interesting that the terminology varies as CASK is not quite the same as costs per booked seat. I can't categorically give you a website that will sort the above problem out but for many comparisons you could try: https://www.theairlineanalyst.com/Login.aspx?ReturnURL=/ComparisonManagement.aspx I haven't had the need to use this myself so the inclusion of this link does not guarantee that the results for comparisons are 100% accurate. As the load factor and seat information is internal info there is usually no compulsion on an airline to publish it but most do in their CEO or directors' reports. However you may find other useful comparisons via this airline analyst link. However please remember to reference it if you use it in your report.

i chose emirates airlines andthey have some interim facts and figures. is it possible to use these for the report. There are also newspaper articles which talk about these figures.

@thank you trephena and @amal3008, I have requested demo account for theairlineanalyst , it can be interesting source.

@amal3008 -there is normally no problem in principle using financial statements that are only 3 months apart and they both include December (as in Dec 2016 and Mar 2017) . The issue would be that for P34 March 2017 statements would not be available so you would have to use interim accounts that went up to the 3rd quarter, Dec 2016 and either apportion using the Q4 from 2016 to make 12 months or use regression analysis to produce your trend lines. (And explain your approach) Good if there are newspaper articles as the markers like to see that you are not just using financial statements

Hi Is it possible to compare EasyJet with British Airways for my RAP (Topic 8).

As these 2 airlines have different business models they are not a good match. As Easyjet is a low cost airline with just budget price seats choose a company with a similar outlook like Ryanair. BA operates at least 2 classes on flights -economy and business class and on some long haul routes has the high end First Class cBain so Virgin Atlantic is a better comparator as it too has 3 tiers of service

Is British Telecom Group and competitor Sky PLC suitable companies to choose for RAP Topic 8?

This thread is exclusively about using an airline for Topic 8! The correct place for questions and answers for the other industry sectors is https://opentuition.com/topic/mentor-advice-needed-for-obu-rap-topic-selection/ My comment about BT is that BT tends to own the infrastructure in the UK and gains considerable income from this (line rentals and charging other companies like Virgin Media and probably Sky too for using their cables and fibre network). SKY commissions its own programmes and film series whereas I don't think BT does. So my reaction might be to pair Virgin Media with Sky as their business models are possibly more similar. However if you have access to sufficient information you could present BT and Sky on their phone, internet and sports offerings and compare performance on that basis. Please address any other questions in relation to this on the thread I have provided so it is in the right place.

Hello all. I am preparing my submission for May and my topic is number 8; analysis of British Airways for years 2014-2016. I have about seven different ratios for the financial analysis. However as I was trying to calculate the gp and np margins, I noticed that there is only a consolidated income statement for the group not just british airways. There is however a separate balance sheet. Should I calculate based on the group? If not where can I get the single income statement for BA? Thank you everyone for your help.

You need to appreciate the importance of KPIs and not just ratios (and if you have done the Quick Ratio / Acid test then please bin it right now!!) I have recently made a post on Topic 8 Financial Statements - see if the answers there help. I have also added advice on how to approach evaluation and anlysis (it is NOT just about calculating ratios and commenting on figures/percentages). We have an article on Evaluation & Analysis too on our homepage www.opertuition.com/obu

Dear Moderator, Brilliant advice. So happy came across this forum. I am comparing BA and Virgin Atlantic for submission in May and my approach planned for analysis is a combination of ratios/KPIs, PEST and SWOT. I am considering including a M.O.S.T analysis as well and was wondering whether this technique would be a good fit? Additionally, since I am submitting in 2017 Im planning to use years 2014, 2015 and 2016. financial statements for 2016 for both companies have not been released yet but are timetabled for first week in March. Meanwhile I am working on the years I do have. Would this be a good idea? or should I do 2013-2015 instead. I am a bit skeptical about the 90 day rule. Thank you so much for your time.

Please enlighten me (and probably lots of others too) what exactly is a M.O.S.T? (These trendy acronyms come and go but SWOT and PEST have stood the test of time). Unless it is particularly pertinent leave it at the other two as you won't impress the marker by the number of models you refer to -your grade is determined on how well you apply them (and I have seen marker feedback telling the student not to apply the theories thinly and use fewer so they can focus on them better) So apply the models before the ratio analysis as they are intended to 'guide' your analysis. Management strategic decisions are usually based on the factors from the business environment and the decisions will have influenced performance so you need to show links between the SWOT/PEST and the financial results by tracing the decisions and tracking them through the trends you find. Regarding which statements to use this is your decision. If you are wrongly failed for out of date statements this is grounds for an appeal and if it was the only grounds for the fail the appeal would be successful. However you would be able to prepare the other 2 years before the 2016 FS come out (including doing the draft graphs) and you would still have more than a month to include the latest year. So your choice :-) If it were me being the perfectionist I am I would be doing 2016

Thank you! That was my train of thought regarding the 2016 statement. M.O.S.T - Mission Objectives Strategies Tactics and it looks at the internal environment and whether the company has achieved its set out goals and objectives and to what extent. Topic 8 seems fairly popular and I do want my RAP to stand out and not be a just another repetitive report so I thought of including a more modern technique alongside my PEST/SWOT. However I would rather end up with a well round and written report than one that just plugs in technique after technique.

Again sorry but I do have another question if you do not mind. On BA's statements they are prepared as the consolidated statements. In the report there is a separate SOFP for BA alone but there is no single income statement just the consolidated. For some of the financial ratios and analysis itself I would need the figures from the single income statement. Do you have any suggestions how to approach this? Analyzing the group would present a skewed picture and also unfair comparison unless Im mistaken.

I think you are going to have to go along with analysing this at a group level. Many of the subsidiary companies in the group are not significant revenue earners anyway and offer complementary services to the main company activities. https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwiu0_HJ6avSAhXLAsAKHRvEC-oQFgg0MAA&url=http%3A%2F%2Fphx.corporate-ir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9NjE0MDM4fENoaWxkSUQ9MzI4MDI0fFR5cGU9MQ%3D%3D%26t%3D1&usg=AFQjCNEmF7jMrKXfkc4qOiGxBveAzgiW5w&sig2=zQq3sAd8eBNddMOq4o9TdQ P.71 has some very useful KPIs and there is a lot of other useful information in this report. Now that you have explained what a MOST is I think you could use this. I would mention it in Part 2 and say that you will assess these factors after you have done your business and financial analysis. Then when doing the Conclusion I would assess how successful the company/group has been in respect of these aspects (Mission Objectives Strategies Tactics) - in this way I think you will be able to produce a very rounded Conclusion as you will be bringing together the significant findings from your business and financial analysis.

I wonder how people squeeze so much information in just 4,500 words in part 3. Lets make 5000 at stretch.

Hi, I am considering doing my RAP on Lufthansa and using Qantas for comparison. Am I permitted to use airlines based in different countries for comparison? Please advise. Thanks

Hi, To add to my previous query, which are the typical ratios / numbers that needs to be analysed and explained from an Airline while attempting T8. A brief idea would help... So far reading the forum, I could gather that inventory related ratios are meaningless... What I could not gather was which ratios to focus on, given the word count limitation.. Thanks a lot

Well if you have been reading these forums you will know that I stress the importance of linking the factors from the models to the actual trends in performance. Ratios on their own are insufficient to meet the assessment criteria it is your interpretation of them with reasoned analysis that counts. First discuss revenue including growth and revenue per available seat per kilometre (ASK). Then move on to operating profit and again bring in any ASK KPIs. A significant part of airline operations is investment in fixed assets (i.e. aircraft) so Asset Turnover is useful. Gearing in connection with the lease or buy aircraft decision is important -whether long term loans are use for the latter or raised via share issues. You probably only need to mention the current ratio in passing as cash flow is more important. I covered the reasons for the complexity with regard to working capital on the Topic 15 forum while discouraging students when thinking about using an airline for this. Don't bother with payable/ creditor (or inventory) as the working capital cycle if you read my T15 is too complex for you to be able to calculate this accurately -try to find my post as I explain why the working cape cycle is complex for someone outside the co to calculate meaningfully.

Hi, I'm planning for the submission 34 which this may and the company I choose was Ryanair and easyjet. As the Ryanair annual report for March 2017 haven't published, can I use the annual report end March 2016? While for easyjet, I need to adjust the financial statements to compare with Ryanair and hence, I need to use the 2016 quarterly report?

The disparity between publication dates has been discussed many times before on this forum. The 90 day rule is set out in the Information pack. I suggest you read through the posts on here as in addition answers to your queries you may pick up a few suggestions and hints on how best to approach this topic.

Thank you for your prompt reply. I have read it and just want to counter confirm it. But for the competitor that easyjet, i feel confuse on how to apportion the financial period. can explain by example for this?

Normally apportionment is not necessary. Provided both sets of accounts cover the main peak periods e.g. for these two airlines there are two peak periods summer June to September and Christmas (summer being the main period of revenue earning with maximum number of flights per day). You need to compare the trends in the data (annual revenue growth rates, costs/revenues per available seat per km, aircraft utilisation, load factors, operating profit, gearing, EPS and discuss cash flow. These trends because they run over 3 years are usually sufficient without apportionment. The factors behind the trends are what will get you your pass. The actual reasons for the main company's performance needs to be tied to the SWOT and PEST factors and strategic management decisions which will have been based on these. Many of the PEST factors will apply to both companies so significant differences in performance ratios will mainly be down to strategic factors i.e. how management have implemented decisions based on the SWOT factors (or ignored them). However it is important to recognise the impact of leasing or buying the aircraft outright as this will impact on operating profit, gearing and equity ratios, asset Turnover etc. Where both companies lease this is not a major problem as you are comparing like with like.

I'm using Ryanair from March'14 to March'16 while easyjet is September'14 to September'16, so I will only have two peak period to compare which is June'14 - Sept'14, Christmas 2014 and the same for 2015. Hence, only analysis these two peak period or i shall adjust?

Apportionment is not really necessary - you focus on your main company, the trends and strategic decisions as I have already outlined in my post above. If you are not happy with my advice, then apportion but most students do not.

Oh, i didn't disagree with your advice. Maybe my communication is poor so my word let you have such feeling. I was confused on the peak period as both airline are difference year ended.