Ryanair Holdings plc reported its fiscal third-quarter results showing a mixed financial picture. While the airline experienced an increase in revenue and passenger numbers, net profits declined sharply compared to the same period last year due to a significant exceptional regulatory charge.
For the fiscal third quarter, Ryanair posted a profit after tax of 115 million euros before exceptional items, down from 149 million euros a year earlier. The company recognized an exceptional charge of 85 million euros related to a regulatory fine imposed by the Italian Antitrust Authority (AGCM). Ryanair characterized this fine as "baseless" and stated that it expects to overturn the penalty on appeal, with the charge reflecting approximately one-third of the total fine.
Revenue for the quarter was reported at 3.21 billion euros, representing a 9% growth from the prior year. Ticket sales volume rose 6% to 47.5 million passengers, while the load factor remained consistent at 92%. The average fare increased by 4% to 44 euros per passenger, with total revenue per passenger growing by 3%. Scheduled revenue improved 10% to 2.10 billion euros, and ancillary revenue increased 7% to 1.11 billion euros.
The airline’s operating costs before considering the exceptional charge rose 6% to 3.11 billion euros but were stable on a per-passenger basis. This suggests that unit costs remained well-managed despite inflationary pressures. Other income decreased compared to the previous year due to the absence of compensation related to delivery delays that had benefited the company in the earlier period.
When factoring in the exceptional charge, Ryanair’s profit after tax for the quarter fell to 30 million euros from 149 million euros the prior fiscal third quarter. The company continued to emphasize sound cost control measures and efficiency in maintaining stable unit costs amid regulatory and operational challenges.
On the balance sheet front, Ryanair reported gross cash holdings of 2.4 billion euros as of December 31st, after utilizing 1.2 billion euros for debt repayment, 1.4 billion euros for capital expenditures, and distributing 0.6 billion euros to shareholders. Net cash stood at 1 billion euros, with an additional liquidity buffer from an undrawn revolving credit facility valued at around 1 billion euros.
The airline’s fleet included 206 Boeing 737-8200 "Gamechanger" aircraft out of a total of 643 aircraft as of December 31. The company expects to receive the remaining four new aircraft by the end of February. This fleet expansion supports the company’s forecast for a 4% increase in passenger traffic to 216 million passengers during fiscal 2027.
Fuel hedging positions cover 84% of fiscal 2026 requirements at an average price of $77 per barrel, and approximately 80% of jet fuel needs for fiscal 2027 are hedged at about $67 per barrel. This provides notable cost certainty in a volatile energy market.
Ryanair initiated a 750 million euro share buyback program in May. By the end of December, it had repurchased and canceled more than 13.1 million shares, nearly 46% of the total buyback target, at a cost exceeding 340 million euros. Additionally, an interim dividend of 0.193 euros per share is scheduled for payout in late February.
Looking forward, Ryanair projects passenger traffic to grow 4% to nearly 208 million in fiscal 2026. The company has set a cautious forecast for profit after tax before exceptional items between 2.13 billion euros and 2.23 billion euros. The anticipated scaling up in passenger volumes reflects underlying strong demand and faster-than-expected aircraft deliveries from Boeing.
Unit costs are expected to remain controlled, with efficiency gains mitigating inflationary pressures relating to regulatory and environmental expenditure. Despite missing Easter-related revenue in the fourth quarter, fares are trending higher than last year’s levels, leading Ryanair to elevate its full-year fare growth outlook to 8–9%, up from an earlier forecast of 7%.
However, significant risks persist, including the potential escalation of geopolitical conflicts in Ukraine and the Middle East, macroeconomic shocks, and disruptions caused by repeated European air traffic control strikes and mismanagement, which could affect operational performance and profitability during the period.
In separate remarks, Chief Executive Officer Michael O’Leary noted a recent public exchange with Elon Musk that resulted in increased attention and demand for the airline, notably a 2–3% surge in bookings over five days. Despite discussions, Ryanair opted not to equip its fleet with Starlink satellite internet due to prohibitive installation costs and additional fuel weight penalties, which O’Leary estimates would add approximately 100 euros per flight and increase annual fuel expenses by around 200 million euros.
Regarding potential investments from Musk, O’Leary stated that Ryanair is publicly traded and open to investors, although non-European citizens cannot hold a majority stake in European airlines. He expressed confidence in Ryanair as a sound investment opportunity, describing it as a "significantly better investment" compared to Musk’s $44 billion acquisition of X.
Ryanair shares declined by approximately 3.62% to $68.40 during premarket trading following the earnings announcement, reflecting mixed investor sentiment on the financial results.