Ryanair Holdings plc

Ryanair reported Q1 FY 2027 profit after tax of €538 million, down 34% from €820 million last year. Traffic increased 6% to 61.3 million passengers. Schedule revenue dipped 1% to €2.91 billion as average fares were down 6% and revenue per passenger fell 5%; ancillary revenues were flat at €24 per passenger. Unit cost rose 5%, while unit cost ex-fuel was up 2%; the company also said unhedged Q1 jet fuel prices doubled to $151 per bbl. At quarter end, gross cash was just over €2.8 billion after €1.3 billion of debt repayments and €500 million of CapEx, with a €1.1 billion revolving credit facility mostly undrawn. For FY 2027, management reiterated traffic growth of 4% to 216 million passengers, with H1 traffic up 6% and H2 up 2%; Q2 pricing is now expected to be down low to mid-single digits, and no full-year profit guidance was given due to zero H2 visibility.

Michael O’Leary’s tone was upbeat on Ryanair’s competitive position and long-term growth, but cautious to bearish on near-term pricing. He emphasized the company’s wide cost advantage, 80% fuel hedged at $67 per bbl for FY 2027, and a growing fleet/order book that should support profitable growth toward over 300 million passengers by 2034. He also highlighted new bases and routes, the debt-free balance sheet, and confidence that MAX 10 aircraft will improve economics further once delivered.

Neil Sorahan focused on the balance sheet and cost control. He said Ryanair has 620 fully unencumbered Boeing 737s, is debt-free after repaying the final €1.2 billion bond in May, and ended the quarter with just over €2.8 billion in gross cash plus a mostly undrawn €1.1 billion revolver. He noted hedging remains protective at 80% of FY 2027 fuel at $67 per bbl, with the 20% unhedged portion the main swing factor, and said ex-fuel unit costs were up only 2% in Q1. He also said ancillary sales were in line with traffic and that full-year staff costs should rise further as more CLA agreements flow through.

Analysts pressed management on why fare guidance worsened even as close-in bookings improved, and O’Leary said the earlier discounting could not be fully recovered, booking windows are shorter, and he now expects weak pricing into Q2 and likely the second half as well. Questions on unit costs and depreciation were answered with comments about more aircraft in the fleet, LEAP engine accruals, and older NG aircraft needing more frequent checks, though management said the pace should slow later in the year. Other questions focused on airport queues and EU regulation, with management saying queues at several airports should not materially stop travel, baggage-rule changes should be revenue neutral, and the new EU bag-advertising and ETS proposals would increase regulatory friction rather than improve competitiveness.