In Real World…7.3, we saw that Ryanair’s break-even point varied from 72 per cent to 83 per cent over the five-year period. Why was it not the same each year?

Data from Real World 7.3

BE at Ryanair 

Commercial airlines pay a lot of attention to their BEPs and their ‘load factors’, that is, their actual level of activity. Figure7.7 shows the BEPs and load factors for Ryanair, the ‘no-frills’ carrier.

Figure7.7

Taking 2020 as an example, on average Ryanair’s planes flew with 95 per cent of the available seats occupied by a paying customer. On average in that year, the business would have broken even with only 83 per cent of the seats occupied.*

We can see that Ryanair made operating profits in each of the five years considered. This is because the airline’s load factor was consistently greater than its BEP.