Average fare up 21pc to €51 & yield per passenger up to €75 – Ryanair Q1 results

Ryanair reported a net profit of €820m for the April-June quarter, up from €360m in the same period last year due to the timing of the Easter holiday and improved last-minute fares. Average fare is up to €51.

Passenger traffic rose by 5pc to nearly 58m, contributing to revenue growth of 20pc, which reached €4.34bn, €75 per passenger. Ancillary revenue is up 3pc.

The airline expressed caution over further growth due to significant delays in Boeing delivery schedules.

Michael O’Leary indicated that the outlook remains vulnerable to risks such as tariff wars and geopolitical tensions affecting the airline industry.

Ryanair anticipates a recovery in fares that could facilitate reasonable net profit growth for the fiscal year ending March 31, 2026. A 21pc increase in average fares contributed significantly to the performance.

Operating costs increased by 5pc to €3.42bn, offset by competitive fuel hedging that helped maintain a positive margin despite higher air traffic control fees. Ryanair’s fleet has been expanded to include 181 B737-8200 max supporting projected growth to 206m passengers by FY26.

Michael O’Leary shared, “We cautiously expect to recover almost all of last year’s 7pc full-year fare decline, which should lead to reasonable net profit growth in FY26.”

Neil Sorahan shared, “Across the piece, bookings are good. Consumer confidence was very strong. We’re all hopeful and maybe a little confident that something might get done” regarding potential tariff exemptions for commercial aircraft.

Ryanair shared, “Total revenue rose 20pc to €4.34bn. Scheduled revenue increased 26pc to €2.94bn as traffic grew 4pc with 21pc higher fares. Our recent deal to buy 30 CFM LEAP-IB engines is a significant $500m commitment to improve our operational resilience. The final FY26 outcome remains heavily exposed to adverse external developments, incl. the risk of tariff wars, macro-economic shocks, conflict escalation in the Middle East and Ukraine and European ATC strikes.”

Full Ryanair statement

• Traffic grew 4pc to 57.9m.
• Revenue per passenger rose 15pc (averaage fare up 21pc to €51 & ancillary revue up 3pc).
• Unit cost inflation just 1pc – cost gap advantage widens.
• Competitive fuel hedges de-risk Group:  c.85pc FY26 at $76bbl.
• 181 B737 “Gamechangers” in 618 fleet (incl. 5 deliveries in Q1).
• Over 160 new S.25 routes (total: 2,600 routes).
• 30 spare CFM LEAP engines bought to improve resilience.
• Ryanair added to the MSCI World international equity index which tracks stocks from 23 developed countries

Total revenue rose 20pc to €4.34bn.  Scheduled revenue increased 26pc to €2.94bn as traffic grew 4pc with 21pc higher fares.  Q1 fares substantially benefitted from having a full Easter holiday in April, weak prior-year comps and marginally stronger than expected close-in pricing.  Ancillary revenues delivered another solid performance rising 7pc to €1.39bn.  Operating costs rose 5pc (+1pc per pax) to €3.42bn as our jet fuel hedging largely offset ATC fees (up 16pc) and higher enviro. costs (as ETS allowances unwind and SAF blend mandates impact costs from Jan. 2025).

Ryanair’s competitive fuel hedging provides a key advantage in current volatile oil markets, with FY26 almost 85pc hedged at $76bbl and FY27 36pc hedged at just under $66bbl. 

Balance Sheet, Liquidity & Returns:

Ryanair’s balance sheet is one of the strongest in the industry with a BBB+ credit rating (both Fitch and S&P) and unencumbered B737 fleet (over 590 aircraft).  At 30 June, gross cash was €4.4bn after €0.6bn capex and almost €0.4bn debt repayments.  Net cash was €2.0bn (up from €1.3bn at 31 Mar.), leaving the Group well positioned to repay approx. €2.1bn maturing bonds over the next 10-months (incl. an €850m bond in Sept.) from internal cash resources.  This financial flexibility further widens the cost gap between Ryanair and competitors who are exposed to expensive (long-term) finance and rising aircraft lease costs.

We welcome Ryanair’s full addition to the MSCI World Index and expect to join the FTSE Russell Index, following their semi-annual index review, in Sept. (albeit this inclusion will be phased over approx. 2-years).  In May, we launched our latest share buyback and have purchased (and cancelled) c.1.6m shares under the programme, at a cost of €39m, at 30 June.

Fleet & growth

Ryanair has 181 B737-8200 “Gamechangers” (up 25 from June 2024) in its 618 aircraft fleet, facilitating 3pc FY26 traffic growth (to 206m passengers).  We remain confident that the 29 remaining Gamechangers in our 210 orderbook will deliver well ahead of S.26, when we hope to recover this years delayed traffic growth into FY27.  Boeing continues to expect MAX-10 certification in late 2025 and we’re planning for the timely delivery of our first 15 MAX-10 deliveries in Spring 2027, with 300 of these very fuel efficient aircraft due to deliver by Mar. 2034. 

This summer we will operate over 2,600 routes (incl. 160 new routes) and we’re seeing strong S.25 travel demand across our network.  Our Group airlines capacity constrained growth is being allocated to those regions and airports who are cutting aviation taxes and incentivising traffic growth, and we expect this trend to continue.

We believe European short-haul capacity will remain constrained for the next 5 years to 2030 as the big 2 OEMs remain well behind on aircraft deliveries, many of Europe’s Airbus operators work through Pratt & Whitney engine repairs and EU airline consolidation continues (SAS, TAP, Air Europa & others).  These industry capacity constraints, combined with our widening unit cost (and fuel hedge) advantage, strong balance sheet, low-cost aircraft orders and industry leading ops resilience will, we believe, facilitate Ryanair’s controlled profitable growth to 300m passengers p.a. by FY34. 

During Q1 we took delivery of 5 new B737 Gamechangers (4pc more seats, 16pc less fuel & CO2) and saw the benefit (1.5pc lower fuel burn and 6pc less noise) from the retrofit of winglets to our B737NG fleet (target of 409 by 2026).  Our recent deal to buy 30 CFM LEAP-IB engines is a significant $500m commitment to improve our operational resilience.  These latest technology engines reduce fuel consumption and CO2 emissions per seat by up to 20pc.  The Groups ambitious SAF commitments and our ongoing investment in new technology positions Ryanair as one of Europe’s most environmentally efficient airlines. It is notable that, despite being Europe’s largest passenger airline, we are only No.4 in the recent Cirium list of EU airline CO2 emissions.

Outlook

FY26 traffic remains on track to grow just 3pc to 206m passengers, due to heavily delayed Boeing deliveries.  As previously guided, we expect modest unit cost inflation in FY26 as the delivery of more B737 Gamechangers, advantageous fuel hedging and effective cost control across our Group airlines helps offset increased ATC charges and higher enviro. costs.  While S.25 travel demand is strong, Q2 fare increases will be lower than in Q1 (which benefitted from a full Easter holiday in April and weak prior-year comps) and we now expect to recover almost all of the 7pc fare decline we suffered in PY Q2.  The final H1 outcome is, however, heavily dependent on the strength of close-in Aug. and Sept. bookings.  As is normal at this time of year, we have zero H2 visibility (where PY fare comps normalise and last years modest delivery delay compensation rolls off). 

It remains too early to provide meaningful FY26 PAT guidance.  We do, however, cautiously expect to recover almost all of last years 7pc full-year fare decline, which should lead to reasonable net profit growth in FY26.  The final FY26 outcome remains heavily exposed to adverse external developments, incl. the risk of tariff wars, macro-economic shocks, conflict escalation in the Middle East and Ukraine and European ATC strikes, mismanagement & short staffing.