Ryanair boosts profits nearly 1.5 times thanks to Europeans' reluctance to fly to the U.S.
Airline chief Michael O'Leary has threatened to move some of his planes to the continent if the UK government raises the transportation tax
Irish low-cost carrier Ryanair, Europe's largest airline in terms of passenger traffic, exceeded market expectations in terms of revenue and profit, and slightly increased its passenger traffic forecast. The airline managed to make money during the vacation season on the unwillingness of Europeans to spend money on buying expensive tickets to the USA.
Details
Ryanair's net profit in the first half of fiscal year 2025, from April to September, jumped 42% to €2.54 billion. The consensus forecast was €2.5 billion, The Wall Street Journal reported, citing Visible Alpha. Revenue in the reporting period increased 13% to €9.82 billion, beating analysts' estimates by $40 billion.
The low-cost carrier said strong demand for air travel during the summer months amid Europeans' reluctance to fly to the U.S. for vacations allowed it to raise ticket prices by 13%. "Transatlantic travel, which has been aggressively increasing in price, has remained at a low level this summer. More and more families are choosing to vacation in Europe, particularly the Mediterranean," the Financial Times quoted Ryanair chief Michael O'Leary as saying.
Ryanair raised its passenger forecast for fiscal 2026 to 207 million from 206 million, citing earlier-than-expected deliveries of Boeing planes and good demand. The carrier said it hopes to fully offset last year's 7% average fare cut this fiscal year, but will have to make prices "slightly" more attractive in November, Reuters reported.
In addition, O'Leary criticized the British government's plans to raise taxes on passenger air travel. In this case, he threatened to relocate some of his planes to the continent - to Sweden, Hungary or Italy, CNBC reported.
How the market reacted
Shares of the airline fell at the opening of trading in Dublin by 3.6%. But two hours after the start of trading, the quotations began to grow rapidly and went into plus by 3.7%.
What the analysts are saying
Ryanair's "confident" outlook should allay market fears that the carrier could have demand problems in the winter, a period of seasonal increases in airfare availability in the market, JPMorgan Chase said.
Investment banks were moderately positive on Ryanair's financial report, largely confirming their previous bullish forecasts and target prices for the airline's shares. As MarketScreener reports, JPMorgan kept its target at €30 - 14% above the closing level of previous trading on October 31, UBS - at €29.6, the target price of RBC and Bernstein - €28. All of them recommend buying securities of the Irish low-cost carrier (Buy rating). Goldman Sachs maintained a neutral rating with a price target of €27.5.
This article was AI-translated and verified by a human editor
