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Ryanair Holdings PLC (RYAAY) - free report >>
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Ryanair Holdings PLC (RYAAY) - free report >>
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Ryanair (RYAAY) Rides on Improved Traffic Amid Rising Costs
Ryanair Holdings(RYAAY - Free Report) benefits from improved traffic growth, which implies increased passenger volume.
Passenger volume has been robust at Ryanair over the past few months owing to the rebound in air traffic from the pandemic lows. Ryanair has raised its traffic view for fiscal 2023 to 185 million (prior view: 168 million). Ryanair's fourth-quarter fiscal 2023 (ended Mar 31, 2023) revenues of $1,981.5 million beat the Zacks Consensus Estimate of $1,908.7 million and improved year over year, driven by upbeat passenger volumes.
Meanwhile, Ryanair recently reported highly impressive traffic numbers for June 2023, driven by upbeat air-travel demand. The number of passengers ferried on RYAAY flights in June was 17.4 million. This compared favorably with the May 2023 figure of 17 million and 15.9 million in June 2022. Owing to upbeat traffic, the load factor (percentage of seats filled by passengers) was high at 95% in June 2023. The reading was similar a year ago. RYAAY operated more than 96,250 flights in June 2023.
Ryanair’s measures to expand its fleet to cater to the improvement in air-travel demand are encouraging. RYAAY’s total fleet included 537 aircraft as of Mar 31, 2023.
Due to buoyant air-travel demand, shares of Ryanair have gained 48.5% so far this year compared with 37.1% growth of the Zacks Airline industry.
Image Source: Zacks Investment Research
On the flip side, more than 900 flights (almost 160,000 guests) were canceled due to air traffic controllers strikes in June 2023.
Rising fuel prices pose a threat to Ryanair’s bottom line. The airline’s fuel costs increased 113% in fiscal 2023. Apart from higher fuel prices, the ramp-up in the airline’s operations is pushing up total costs. Operating costs were up 75% in fiscal 2023.
Zacks Rank & Key Picks
Ryanair currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings (CPA - Free Report) and CSX Corporation (CSX - Free Report) . Copa Holdings sports a Zacks Rank #1 (Strong Buy), while CSX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an expected earnings growth rate of 75.42% for the current year. CPA delivered a trailing four-quarter earnings surprise of 14.60%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 25.5% over the past 90 days. Shares of CPA have soared 32.5% over the past six months.
CSX has an expected earnings growth rate of 2.09% for the current year. CSX delivered a trailing four-quarter earnings surprise of 7.76%, on average.
The Zacks Consensus Estimate for CSX’s current-year earnings has improved 4.3% over the past 90 days. Shares of CSX have gained 6.6% over the past six months.