Ryanair ($RYA) reported an increase in fiscal first-half revenue and passenger numbers this Monday, despite challenges posed by strikes at Boeing, which prompted the airline to adjust its traffic growth forecast for the upcoming year. The Irish budget airline welcomed a record number of customers, driven by its competitive pricing strategy.
As a result, total operating revenue for the six months ending September 30 rose to 8.69 billion euros, up from 8.58 billion euros the previous year. Ryanair also achieved significant market share gains, resulting in a 9% increase in passenger traffic, totaling 115.3 million. The airline anticipates that the delivery of nine remaining aircraft from Boeing will be delayed until the final quarter of 2024.
While Ryanair projects an 8% rise in passenger numbers for fiscal 2025, estimating between 198 million and 200 million, it has adjusted its guidance for fiscal 2026 down to 210 million passengers from an earlier target of 215 million. RBC Capital Markets forecasts traffic to reach 199.5 million in fiscal 2025 and 212 million in fiscal 2026. In the first half of the fiscal year, a 10% decline in average airfares led to a drop in profit attributable to equity holders, which fell to 1.79 billion euros from 2.18 billion euros the previous year.
This 18% reduction was consistent with both RBC’s estimates and the company’s compiled consensus of 1.8 billion euros. Although Ryanair did not issue a profit forecast, it noted that results would depend on navigating challenges over the remaining five months of the fiscal year. Additionally, the board has announced an interim dividend of 0.223 euro per share, an increase from the previous year's interim dividend of 0.175 euro per share. Chief Executive Michael O'Leary stated, "These capacity constraints, combined with our widening cost advantage, strong balance sheet, low-cost aircraft orders, and industry-leading operational resilience will, we believe, facilitate Ryanair's low-fare profitable growth to 300 [million] passengers over the next decade." He added, "We see longer-term attractions to Ryanair's low-cost and relatively high-margin (and so high ROCE/ROIC) business model.
We anticipate FCF yields rising to over 10% by FY26E as capex declines, allowing for further shareholder returns," RBC observed. Price: $17.63, Change: $-0.40, Percent Change: -2.19%.