Ryanair Holdings (RYA1N) Q2 2027 Earnings Report

The call was cautiously positive. Ryanair reported strong traffic, a robust balance sheet, significant shareholder returns, improving Q3 fares, and meaningful network and fleet opportunities. However, these strengths are offset by a 15% profit decline, higher operating costs, a potential EUR 2 billion FY28 fuel increase, limited forward visibility, and possible labor and geopolitical challenges. Management remained confident in Ryanair's relative cost position and long-term prospects, but emphasized that FY28 performance depends heavily on oil prices and fare increases.

Ryanair expects FY27 traffic to grow 3% to 214 million passengers, with winter traffic from November to March broadly flat year-on-year, and expects next year to reach 220 million passengers with 3% traffic growth from 16 MAX 10s; FY27 ex-fuel unit costs are expected to rise 2%-3% on the full year, FY27 CapEx is expected to be fairly close to about EUR 2 billion, and FY28 CapEx is expected to be somewhere between about EUR 2.7 billion and EUR 3 billion. FY27 jet fuel remains 80% hedged at $67 a barrel, FY28 cover has risen from 15% to 25% at an average price of $95 per barrel, and the company expects FY28 cover to be up at around 50% for the first half of next year; a EUR 2 billion increase in the fuel bill would require about a 20% increase in airfares, or about EUR 10 per passenger. Q3 fares are trending modestly up, which Michael O’Leary said would be mid-single digits, while Q4 will be up double-digit percent, and Neil Sorahan said fare increases next year could be 10% or 15% or higher; ancillary revenue is expected to be roughly 1% for the full year, with 1%-2% for passenger growth moving forward. The market expects profits of about EUR 1.7 billion-EUR 1.8 billion this year, with a reasonable chance of maintaining that into FY28, although this is heavily dependent on where fares go and where oil prices go; FY28 unit-cost guidance is too early, and the company announced an interim dividend of EUR 0.273 per share and another EUR 800 million share buyback running from February to the end of December 2027.