Group Chief Financial Officer, Ryanair
Neil Sorahan Ryanair presentationJuly 20 2026
Ryanair results April to June quarter 2027, presentation by CFO Neil Sorahan.
About Neil Sorahan
Neil Sorahan, Group Chief Financial Officer at Ryanair, spoke on the company's Q1 2027 earnings call on May 18, 2026. He highlighted the company's financial position, stating that Ryanair has a "fortress balance sheet" with 620 fully unencumbered Boeing 737s and noted that the company became debt-free in May. Sorahan described the balance sheet as "rock solid" and said it positions the company to capitalize on opportunities in the coming years. Sorahan also addressed the company's fuel hedging strategy, noting that Ryanair is 80% hedged at $67 per barrel for the current financial year. He identified the 20% unhedged fuel exposure as the key swing factor for the remainder of the year, similar to the first quarter.
Transcript (3 segments)
M
Michael0:00
And with that, I'm going to ask Neil to take us through the slide presentation.
N
Neil Sorahan0:03
Michael, thank you very much and good morning everybody. Ryanair has the lowest fares and the lowest cost of any airline in Europe and that cost advantage the gap continues to widen. We're number one for traffic as Michael already said, growing by 4% to 16 million passengers this year. Number one for on-time performance and recorded record customer satisfaction CSAT scores of 91% in the first quarter, up two points on where we were last year. We continue to enjoy very strong ESG ratings and our 300 MAX 10s which start delivering from 2027 will deliver a decade of growth for Ryanair. This is underpinned by our financial strength and our low cost which makes Ryanair the long-term winner. Just looking at the routes, number one for cover and choice. This summer we're operating almost 650 aircraft from 95 bases across Europe. This will deliver 216 million passengers and then with our MAX 10 order book 300 aircraft, we'll grow to 300 million passengers per annum by March 2034. Importantly, the cost gap between Ryanair and our competitor airlines continues to widen quarter-on-quarter, year-on-year. If we look at our two nearest competitors before COVID, Wizz were 26% behind Ryanair. Now that's over 81% and we would expect that to continue to grow over the next number of quarters and years. EasyJet have gone from a 70% gap to a 150% gap and again, I don't see that narrowing anywhere in the near term. And so I think with the MAX 10s coming in, we're going to see further improvements on our unit costs as we push out over the next few years and that gap will only get wider between ourselves and all competitors in Europe. On the quarter itself, we saw traffic grow 6% to just over 61 million passengers. This was helped by the 29 additional game-changers in the fleet. So, all 210 game changers were operating in the first quarter of this year with flat load factors 94%. Fares, however, were down 6%. Some of this was due to timing of Easter. We saw only half of Easter in this quarter compared to a full Easter last year. But importantly, we saw consumer hesitancy related to the Middle East war which drove some of those fares down with more price stimulation. Ancillary revenue did however put in a solid performance up 5% to 1.47 billion. So, as a result, total revenue grew modestly 1% to 4.38 billion in the quarter. Fuel, however, as Michael already said, while we're very well hedged on 80% of our fuel book, our 20% unhedged saw the price double to over $150 a barrel. So, as a result, total cost up 11% to 3.81 billion and profitability of 538 million in the quarter which is just over 30% down on the prior year quarter at 8.820. Balance sheet is rock solid, a fortress balance sheet. We're very unique, 620 Boeing 737s fully unencumbered on the balance sheet. And now, of course, having paid off our 1.2 billion euro bond in May, the group is debt free. And we're triple B plus rated by both Fitch and S&P and lots of liquidity, 2.8 billion gross cash at the end of the quarter after 1.3 billion debt repayments, half a billion capex, and supplemented by a revolving credit facility. So, an unrivaled fortress balance sheet within the Ryanair Group. And with that, Michael, I'll ask you to run us through current developments, please.
M
Michael3:36
Thanks, Neil. So, as we've said this morning, traffic is up. We expect full year traffic up 4% to 216 million passengers. That is strong growth in H1 up 6% less capacity deployed in H2 up only 2%. With that strong volume growth, however, Q2 fares we expect will be modestly down year on year, something low to mid single digits. That scarce capacity we have is being switched to those states, those airports who are cutting taxes, lowering ATC fees, introducing growth incentive schemes to grow. For FY27, jet fuel is 80% hedged at $67 a barrel, but we are exposed on the other 20% unhedged to very volatile fuel situation, but less exposed than any of our competitors. FY28 is now 50% hedged at $85 a barrel. We repaid the final 1.2 billion bond in May. The group is now essentially debt-free. We are actively planning and funding the delivery of the first 15 MAX 10 aircraft in the spring of 2027, and we believe those new aircraft will kick off a decade of low-fare profitable growth to 300 million passengers by FY34. Briefly on the Boeing update, spoke to Boeing last week. They expect to have the MAX 7 certified by the end of July, mid-August. They now expect the MAX 10s will be certified by the end of September, maybe October. They believe they're well on track to deliver us our first 15 MAX 10s in spring of 2027. These aircraft will transform Ryanair's economics. They have 20% more seats. They burn 20% less fuel. They're significantly quieter than some of our existing fleet. And with 300 of these super fuel-efficient aircraft, we believe we will grow very profitably to 300 million passengers per annum by 2034. We set out a slideshow there showing you the allocation of aircraft and how that translates into traffic development for the next decade. So, in terms of outlook, again, to repeat myself, full year traffic up 4% to 216 million passengers. Fuel very well hedged. Final unit to total unit cost hinges on the price of our 20% unhedged jet fuel. It was falling until last week when the ceasefire came to an end. Nevertheless, our summer 26 volumes are strong, but the window is closer in and it is pricing at lower fares. Q2 is pricing trending modestly down. H1 fares are clearly the final outcome is entirely dependent on closing bookings in August and September. We've zero H2 visibility and therefore no full year guidance. But again, we go back to the kind of key trend of the next decade, the MAX 10 order will facilitate growth to 300 million passengers by 2034. And with that, Neil and I are going to take Q&A.