Ryanair: four years of getting better, but beware of turbulence

Ryanair has had an eventful 12 months. After suffering from a major pilot rostering failure last autumn, it agreed to unionisation and granted pay increases. In Apr-2018 Ryanair increased its Boeing 737MAX order by 25 aircraft, to 135 firm (leaving a further 75 options, which it expects to exercise), and took a 24.9% stake in Laudamotion, agreeing to increase this to 75% if EU competition approval is granted. It has also hinted that it may look at further consolidation opportunities over the next few years.

In the financial year to Mar-2018 (FY2018), Ryanair achieved its highest ever net profit, at the top end of its guidance range in spite of the pilot problems. Once again, it is Europe's most profitable airline by operating margin. However, looking ahead, it expects a net profit fall of around 10% in FY2019 as a result of increased fuel and labour costs. Moreover, Ryanair has also been a leading voice warning of the possible impact of a hard Brexit on aviation.

Four years into its 'Always Getting Better' programme, Ryanair has enjoyed demonstrable success with its load factor and margin trends. Although it is likely to remain Europe's leader on both measures, its unbroken upward trajectory looks set for a pause.