Key Morningstar Metrics for Ryanair
- Fair Value Estimate: EUR 30.60
- Morningstar Rating: ★★★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
What We Thought of Ryanair’s Earnings
Ryanair RYA reported third-quarter revenue growth of 9%, driven by 6% traffic growth and a 4% rise in average fares, with unit costs per passenger flat excluding exceptional items; profit fell by 23% mainly due to the absence of prior-year Boeing compensation and a provision for the Italian AGCM fine.
Why it matters: Passenger growth outpaced capacity as load factors recovered after Online Travel Agency normalization and seasonal demand strength, while fares recouped last year’s decline; however, near-term earnings are masked by the loss of prior-year supplier compensation and the exceptional AGCM provision.
- Demand strength was uneven geographically—growth concentrated in Central and Eastern Europe (Poland, Albania, Slovakia), while Germany, Austria, Dublin, and parts of regional France continue to see capacity withdrawals due to high taxes and ATC charges.
- Capacity rose in line with aircraft deliveries—Ryanair added 29 aircraft for summer 2026, translating into 4% capacity growth, and traffic guidance lifted to 208 million passengers for fiscal-year 2026, with fiscal-year 2027 traffic moving toward 216 million.
The bottom line: We increase our fair value estimate for no-moat Ryanair to EUR 30.6 from EUR 29.0 to reflect incremental long-term cost protection from Ryanair’s planned partial internalization of engine maintenance, despite near-term earnings pressures.
- Ryanair plans to establish two in-house engine maintenance shops from fiscal-year 2028-29, supported by a growing pool of spare engines (along with renegotiated multiyear parts agreements), reducing exposure to escalating third-party pricing and engine scarcity, and supporting margins in the long term.
