Expected Q1 2025 earnings key stats:
Analysts anticipate that Ryanair’s after-tax profit for Q1 FY 2026 (ending June) will double to €800 million compared to last year, as highlighted by recent commentary ahead of the update. This represents a significant improvement in operational performance despite ongoing industry challenges.
Chief Executive Officer (CEO) Michael O’Leary has also expressed confidence, stating there’s ‘no reason to alter or object to’ this projection. His remarks suggest management remains optimistic about the company’s ability to deliver strong financial results.
The expected profit doubling reflects improved operational efficiency and strong demand recovery in European aviation markets. Ryanair’s low-cost model continues to attract price-sensitive consumers during uncertain economic conditions.
Booking dynamics reveal strong summer momentum
The airline continues to benefit from strong booking momentum entering the summer, with further pricing recovery noted in recent weeks. This trend suggests consumer confidence in travel spending remains robust despite broader economic uncertainty.
However, cost pressures remain under scrutiny, particularly fuel, air traffic control (ATC) charges, and ongoing Boeing delivery delays, as well as the beginning of July French air traffic control strike, which may constrain capacity and squeeze margins. These factors create operational challenges that management must navigate carefully.
Fuel costs represent the largest variable expense for airlines, with oil price volatility directly impacting profitability. Ryanair’s hedging strategies help mitigate some exposure, but significant price movements still affect results.
Air traffic control charges continue increasing across European markets, adding to operational cost pressures. These regulatory costs are largely outside management control but must be factored into pricing strategies.
Capacity constraints from Boeing delivery bottleneck
Ryanair has flagged delays in receiving Boeing 737 MAX aircraft, pulling its FY 2026 passenger target down from 210 million to around 206 million — a key variable investor focus for Monday’s update. These delivery delays represent a significant operational constraint.
While this limits growth, it’s also creating a capacity constraint which could help with pricing power later in the summer. Reduced industry capacity often translates to higher fares and improved load factors for operating airlines.
The Boeing delivery situation affects not only Ryanair but the entire aviation industry, creating widespread capacity constraints. This industry-wide issue may paradoxically benefit airlines through improved pricing power.
Shares in airlines like Ryanair often reflect both company-specific factors and broader industry dynamics affecting capacity and pricing trends.
Dividend policy and shareholder returns strategy
Ryanair retains a forward dividend yield of approximately 1.6%, with recent share activity hinting at further shareholder returns. The company’s progressive dividend policy reflects management confidence in cash generation capabilities.
The company’s strong balance sheet has allowed it to sustain a €750 million share buyback programme, likely to be emphasised in the trading update. This capital allocation strategy demonstrates a commitment to returning excess cash to shareholders.
Share repurchases provide flexibility compared to dividends, allowing management to time capital returns based on market conditions and share price valuations. This approach has proven effective during volatile market periods.
The combination of dividends and buybacks creates an attractive total return proposition for investors seeking income and capital appreciation from aviation sector exposure.
Analyst sentiment reflects strong confidence
The analyst community remains bullish, with a 13% upside reflected in consensus mean long-term price targets averaging €26.53. This optimistic outlook suggests analysts view current valuation levels as attractive.
According to London Stock Exchange Group (LSEG) Data & Analytics, 4 analysts have a ‘strong buy’, 11 a ‘buy’, and 4 a ‘hold’ rating for Ryanair (as of 18 July 2025).