EU TRANSPORTATION: Ryanair | FY25 (to March) Results

(NR/BBB+/BBB+) 

O'Leary is noting the fuel tailwind for the industry. He has hedged 40% of next years summer (1H27) at $66/b noting it would 13% below this year's level. Other positives for the sector include strong Easter and early summer yields. After weakness in European yields last quarter (sector wide), O'Leary sees current strength as more reflective of fundamentals in the capacity constrained market.

• Reporting a €1.3b net cash position (LY €1.4b) after ~€2b in FCF, €1.5b of which was sent to equity holders.
• Reaffirms intention to pay down without refi the 25s and 26s, phrased in the normal way: "while Ryanair prepares to repay almost €2.1bn maturing bonds over the next 12-months from internal cash resources, our competitors remain exposed to expensive (long-term) finance, and rising aircraft lease costs."
• Its new prime membership has 30,000 members at the €79/yr price point (https://www.ryanair.com/gb/en/lp/explore/membership)

Outlook for next 12 months is:

• +3% passenger growth (capacity constrained)
• modest unit cost inflation (fuel which is hedged 85% at -4% y/y offsetting other costs inflation)
• Q1 fares (3m to June) benefiting from Easter timing are up +14-15% y/y (vs. -5% fall in March that excluded Easter)
• Expects Q2 pricing (3m to Sept) to be up y/y, 30% booked currently and its +4-5%. Notes heavily dependent on how peak summer yields play out but does not expect a +7% increase (to offset LY's -7% fall)
   
• On regulation there was a call-out to ATC reform across Europe; "Route charges, ATC fees, which are going up by, across Europe by another double digit % for probably the world's most spectacularly shitty service...They'll all start no-showing for work starting next week at the start of June." - O'Leary