Ryanair on Monday logged an uptick in fiscal first-half revenue and passengers, but strikes at US plane maker Boeing forced it to reduce its traffic growth target for the next year, sending shares down almost 2% in morning trade. The Irish budget airline's lower prices received a record number of customers, driving a yearly increase in total operating revenue for the six months ended Sept.
30 to 8.69 billion euros from 8.58 billion euros. Ryanair captured record share gains across most markets, resulting in a 9% traffic growth to 115.3 million passengers. The group now expects the nine remaining third-quarter 2024 deliveries from Boeing to slip into the final quarter of 2024. Although it expects an 8% rise in passengers to between 198 million and 200 million in fiscal 2025, Ryanair moderated its fiscal 2026 guidance to 210 million passengers from 215 million passengers.
RBC Capital Markets estimates traffic at 199.5 million in fiscal 2025 and 212 million in fiscal 2026. In the fiscal first half, the 10% decline in average airfares caused profit attributable to equity holders to drop year over year to 1.79 billion euros from 2.18 billion euros. The 18% fall was in line with the RBC estimate and company-compiled consensus of 1.8 billion euros.
While Ryanair did not provide a profit outlook, it said the outcome is contingent upon circumventing adverse developments during the remaining five months of the fiscal year. Meanwhile, the board declared an interim dividend of 0.223 euro per share for the period, higher than the maiden interim dividend of 0.175 euro per share a year ago. "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," said Chief Executive Michael O'Leary. "We see longer-term attractions to Ryanair's low-cost, and relatively high-margin (and so high ROCE/ ROIC) business model.
We see FCF yields stepping up to >10% by FY26E as capex steps down, leaving scope for further shareholder returns," concluded RBC. Price: $17.63, Change: $-0.40, Percent Change: -2.19%.