[Analysis] Ryanair results are far from disastrous, but the company is right to urge caution, says GlobalData

Ryanair today announced its results for the financial year ended March 2019. Nick Wyatt, Head of Research and Analysis for Travel & Tourism at GlobalData, a leading data and analytics company, offers his view:

“Ryanair’s results shouldn’t come as a huge surprise as the company has issued two profit warnings in the last year. But while people will be eager to jump on this as a sign of huge problems, the fall in profits should be viewed as disappointing rather than a disaster. 

“Ryanair has still posted a profit, something which is far from guaranteed in the airline industry, as it is facing strong headwinds with increasing fuel costs and the looming spectre of Brexit.

“The company boasts some of the lowest unit costs in the industry and this should stand it in good stead. Increased non-fuel costs are the main source of disappointment but Ryanair will be hoping the increased pilot pay it awarded last year will not be repeated. 

“It does need to move Laudamotion closer to profitability though as that has been cited as a drag on profits in the latest release but patience is required as integration and reorganization efforts are still very much ongoing.

“The company had urged caution for the current financial year and it is right to do so, but demand remains strong and Ryanair’s lean cost model should help it navigate cyclical industry turbulence.”

20 May 2019