Ryanair Holdings plc Q3 FY2026 earnings call

• Traffic: Q3 traffic grew 6% to 47.5 million passengers, and FY '26 traffic is raised to 208 million (4% growth) due to early Boeing deliveries and strong demand.
• Fares: Revenue per passenger up 3%, Q4 fares trending ahead, full year fares expected to exceed previous +7% guidance by 1-2%.
• Fleet: 206 Gamechangers in the fleet, with 4 more to be delivered in February, and 3 new bases and 106 new routes announced for summer '26.
• Fuel Hedging: 80% of jet fuel requirements hedged for FY '27 at $67 a barrel, providing a 10% cost saving; 84% hedged for Q4 FY '26 at about $77 a barrel.
• Italian AGCM Fine: Levied a baseless EUR 256 million fine, confident of appeal success due to Milan Court of Appeal precedent, provided 33% provision instead of usual 50%.
• Cost Control: Strong cost control led to flat unit costs in Q3, with modest unit cost inflation expected for FY '26 offset by fuel hedging and Gamechanger deliveries.

In Q3, Ryanair reported a profit after tax pre-exceptional of EUR 115 million. Traffic rose 6% to 47.5 million passengers, with revenue per passenger up 3%. Unit costs were flat in the quarter. For FY '26, traffic is expected to grow 4% to almost 208 million passengers due to strong demand and earlier Boeing deliveries. Fuel is 80% hedged for FY '27 at $67 a barrel, resulting in a 10% saving in fuel costs next year.

• FY '26 traffic expected to grow 4% to 208 million passengers due to early Boeing deliveries and strong demand.
• Full year profit after tax pre-exceptionals guided in the range of EUR 2.13 billion to EUR 2.23 billion.
• FY '27 traffic expected to grow 4% to 216 million passengers, benefiting from fuel hedges and MAX 10 deliveries.
• Fares expected to exceed previous +7% growth guidance by 1-2%.

• Exposed to adverse external developments in Q4 such as conflict escalation in Ukraine or the Middle East, macroeconomic shocks, and European ATC strikes and mismanagement.
• Uncertainty regarding the outcome of the Italian AGCM fine appeal, though confident in overturning the fine, there's still a risk.
• Potential fleet delivery delays and engine repair challenges could impact operations.

Q: Ryanair reported Q3 PAT of EUR 115 million, pre-exceptional, down 22%. What were the key drivers?

A: With a strong operating performance, there was no Boeing delayed compensation in this quarter (unlike prior year). Traffic was up 6% to 47.5 million passengers at 4% higher fares, driven by strong midterms in October and close-in bookings for Christmas/New Year. Ancillaries rose 7%, and unit costs were flat pre-exceptional charges.

Q: Will you provide for the balance of the Italian AGCM fine in Q4?

A: No. Normally, we provide about 50% for legal fines under appeal, but with the Milan Court of Appeal precedent, we're confident in overturning the fine, so we provided 33% and don't expect to make further provisions.

Q: Can you update on your hedging position?

A: We're about 84% hedged at $76 a barrel for the current quarter to end of March. For next year, 80% of jet fuel is hedged at $67 a barrel, providing a 10% saving. Euro-dollar exposure is locked in for next year at favorable rates.

Q: How is Q4 trading?

A: Demand is good. Traffic is expected to rise slightly faster than originally expected, and pricing is modestly ahead of prior year despite no Easter impact in Q4.

Q: What's FY '26 and FY '27 CapEx guidance?

A: We'll finish FY '26 with CapEx close to EUR 2 billion (marginally down from previous guidance). Next year, CapEx is expected to be close to EUR 2 billion, depending on final budget.

Q: How will you finance the MAX 10s?

A: We'll use a strong balance sheet and internally generated cash, and be opportunistic with bond or bank markets when favorable.

Q: When is the next dividend payable?

A: The interim dividend of just over EUR 0.19 per share is payable by the end of February.

Q: Has focus shifted from investing in growth to shareholder returns?

A: No. Our focus remains on investing in growth (e.g., MAX 10s, engine shops) while returning surplus cash to shareholders through buybacks and dividends.

Q: When will you receive your final Gamechangers?

A: The final 4 Gamechangers will be delivered in February, well ahead of the summer '26 schedule.

Q: What's the latest update on MAX 10 certification?

A: Boeing expects MAX 10 certification in Summer 2026 (Q3 calendar), with the first 15 MAX 10s expected in the spring of 2027.

Q: Views on European short-haul capacity?

A: European short-haul capacity will be heavily constrained until at least 2030 due to Boeing/Airbus delivery delays, Pratt & Whitney engine issues, and industry consolidation.

Q: Where is Ryanair most focused on growing?

A: Focused on regions/countries/airports reducing aviation taxes (e.g., Albania, Morocco, regional Italy) and pulling capacity from markets with high taxes (e.g., Austria, Belgium, Germany, regional Spain).

Q: What's the latest update on your engine shop project?

A: Going well, expect to announce the first site soon (before end of March/April), with contracts to be signed before end of first quarter, and first shop operational by late 2028/early 2029, second by early 2030s.

Q: What's the group's FY '26 outlook?

A: Traffic expected to finish at about 208 million passengers (4% growth), fares to recover and exceed previous guidance, and profit after tax pre-exceptionals in the range of EUR 2.13-2.23 billion.