Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ryanair Holdings PLC (RYAAY, Financial) reported H1 after-tax profits of EUR1.8 billion, despite being 18% lower than the prior year.
- The company experienced strong traffic growth of 9%, reaching a record of 115 million passengers.
- Ryanair Holdings PLC (RYAAY) has a strong balance sheet with over EUR3.3 billion in gross cash and a net cash position of EUR600 million.
- The company completed a EUR700 million share buyback in August and is progressing with an EUR800 million follow-on buyback.
- Ryanair Holdings PLC (RYAAY) is 85% hedged for the second half of FY25 at $79 a barrel, providing cost stability amid volatile oil markets.
Negative Points
- H1 after-tax profits were 18% lower than the previous year, impacted by Boeing delivery delays.
- Average fares fell by 10% in the half year, with a significant decline of 15% in Q1.
- The company is facing delays in Boeing aircraft deliveries, affecting its growth targets for FY25 and FY26.
- Ryanair Holdings PLC (RYAAY) had to adjust its passenger growth targets due to aircraft delivery delays, reducing expectations for FY25 and FY26.
- The company is experiencing pressure on consumer spending, contributing to price softness and impacting revenue.
Q & A Highlights
Q: Can you provide more details on the impact of the ATC situation and how it affected your operations this summer?
A: Michael O'Leary, Group CEO, explained that the ATC disruptions were more significant than anticipated, affecting load factors and pricing. The OTA dispute also contributed to the impact. Ryanair is working to resolve these issues and expects improvements in future operations.
Q: What are your expectations for ex-fuel costs and delay compensation in the coming months?
A: Neil Sorahan, Group CFO, stated that while they won't quantify delay compensation, it is expected to be modest. Ex-fuel costs are expected to remain broadly flat, with improvements seen in the second quarter continuing into the third and fourth quarters.
Q: How are you planning to allocate growth given the current aviation tax environment in various countries?
A: Michael O'Leary mentioned that Ryanair is reallocating capacity from countries with high aviation taxes, like France and Germany, to those reducing taxes, such as Hungary and Sweden. This strategy aims to optimize growth in more favorable tax environments.
Q: Can you elaborate on the progress with OTAs and the remaining challenges with eDreams and Booking.com?
A: Michael O'Leary noted that over 90% of OTAs have signed up to approved agreements, ensuring customers receive real Ryanair prices. eDreams and Booking.com are the main holdouts, but Ryanair expects them to eventually comply due to competitive pressures.
Q: What are your thoughts on the MAX 10 certification and its impact on your fleet growth?
A: Michael O'Leary expressed optimism about the MAX 10 certification, expected in the second half of 2025. The aircraft will enhance Ryanair's cost efficiency and support its growth trajectory, with deliveries anticipated to begin in 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
