Ryanair Holdings Plc Q4 FY2025 earnings call

• Profit declined due to a 7% decrease in fares, but traffic grew 9% to 200 million passengers. Ancillary revenues increased by 10%. Unit cost per passenger remained flat, further widening the cost gap with competitors.
• Took delivery of 181 Gamechangers by the end of April, but 29 deliveries were delayed, constraining this year's growth.
• Gross cash was EUR4 billion and net cash was EUR1.3 billion at year-end, leading to a share buyback.
• The relationship with Boeing improved, with a new management team in Seattle. The MAX 10 is expected to be certified later this year.
• The Board removed ownership restrictions in March, and Ryanair was included in the MSCI World Index.
• Howard Miller stepped down as a Non-Executive Director after a long tenure.

Ryanair reported a full-year profit after tax of EUR1.6 billion in FY '25, down from EUR1.92 billion in the prior year. Traffic grew 9% to a new record of 200 million passengers despite Boeing delivery delays. Average fares decreased by 7%, but ancillary revenues rose by 10% with 9% traffic growth. Unit cost per passenger was flat, which widened the cost gap with competitor EU airlines. The fleet had 618 aircraft for summer, with 29 aircraft deliveries in winter for summer 2026, constraining this year's growth to 3% to 206 million passengers.

• FY traffic growth is constrained to 3% this year, reaching 206 million passengers, due to Boeing delivery delays, and is expected to recover to 215 million in FY '27.
• Modest unit cost inflation is expected in FY '26, with the delivery of more Gamechangers, fuel hedging, and cost control offsetting some increased charges.
• Q1 fares were up 14%-15%, Q2 pricing was up 4%-5% but did not fully recover last year's 7% decline.
• 85% of FY '26 fuel was hedged at $76 a barrel, with potential savings from lower oil prices.

• Boeing delivery delays constrain growth.
• Geopolitical uncertainties impact fares and demand.
• EU inaction on regulatory issues such as ATC reform and SAF mandates.
• The Spanish minister's push for unlimited free bags breaches EU regulation.
• Potential tariffs and trade issues affect aircraft deliveries and costs.

Q: Ticket revs per pack, strength and geography?

A: Strength was driven by weak prior-year comparables and strong Easter, with growth in regions like Italy, Hungary, and Sweden.

Q: CapEx phasing?

A: CapEx this year is around EUR2 billion, dips next year, then ramps up to mid EUR2 billion to 3 billion territory by FY '28.

Q: EU regulation and SAF?

A: Little EU action on ATC reform, SAF mandates face supply issues, and a move to CORSIA is needed.

Q: Unit costs and competitors?

A: Unit costs increased by 1%-2%, while competitors' unit costs rose faster, widening the gap.

Q: Transatlantic leisure traffic and buyback?

A: There could be a redirect to Europe, and the buyback will run slower due to bond repayments.

Q: Pay increases and tariffs?

A: Modest pay increases, tariffs are delayed with trade deals, and aircraft are taken into the UK to avoid tariffs.

Q: Route churn and industry consolidation?

A: More frequency building, and the industry is moving towards 4 big operators, with Wiz likely to consolidate.

Q: Aircraft retirements and MAX delivery?

A: NGE retirements are planned around MAX 10 deliveries, and MAX 10 certification is critical.

Q: Options and Boeing fallback?

A: Share options vest in 2028, and Boeing has a fallback to MAX 8200s if the MAX 10 is not certified.

Q: Cash tax and ancillaries?

A: Cash tax is light due to capital allowances, and ancillaries are expected to have similar growth.

Q: Finance income and Spanish bag rules?

A: There is modest Boeing compensation, and the Spanish bag rule is under appeal with the current policy continuing.

Q: CapEx and Ukraine/Israel?

A: Engine MRO shops CapEx is spread over years, and Ukraine airports need to act for growth.

Q: CapEx guidance and holidays/OTAs?

A: CapEx phasing is as discussed, with no interest in holidays yet, and OTAs are working well.