Ryanair Holdings (RYAAY – Snapshot Report) is the king of low cost airlines in Europe. These are the best of times for airlines as fuel costs plummet. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits in both fiscal 2015 and 2016.
Ryanair is a low cost airlines that operates 1,600 daily flights from 72 bases. It connects 189 destinations in 30 countries using a fleet of over 300 Boeing 737-800 aircraft.
Expansion is continuing at a quick pace. In September 2014, it announced that it had ordered another 280 Boeing 737 aircraft and has the option of another 100 more at a list price of $22 billion, basically doubling its fleet. It sees traffic growing from 90 million to 150 million passengers in 2024.
On Dec 23, Ryanair launched a new United States specific web site in order to make it easier for American travelers to book European travel directly. The fares are in US dollars.
Ryanair has long been known for its cost-cutting ways. Several years ago, there was talk of the airline trying to fly with standing passengers as a way to cram even more passengers onto each flight to maximize profits.
However, the airline has softened its nickel-and-dime stance in 2014 and has seen an increase in traffic as a result.
It loosened cabin bag restrictions and relaxed booking requirements, which previously were some of the tightest in the airline industry. This has lessened many of the prior grievances against the airlines that it was too rigid.
Full Year Guidance Raised
On Dec 4, Ryanair announced that is November traffic rose 22% to 6.35 million passengers. Its November load factor also rose by 7 percentage points to 88% from 81% a year ago despite increasing seat capacity by 13% and opening up a bunch of new city pair routes expected to appeal to business traffic.
It had opened up those new city pairs in highly competitive routes against more established business airlines so it expected lower load factors. Instead, the load factors were over 80% in each of those routes, with a load factor of 90% on the Lisbon to London flights.
