Ryanair:
The model evolves — August 2018

Reluctant unionisation, high profile strikes, a steady drip of adverse news items: is the Ryanair model under terminal threat? Certainly not, is the answer from this review of the fundamentals of the airline’s financial and operational performance. However, in this financial year (to March 2019) the company will probably see a drop in profitability from the 20%-plus norm, and it may prove very difficult be recover such margins.

Over the past five years Ryanair has averaged 10% passenger growth, largely through stimulating traffic in new markets. It has pushed average load factors up to 95%, a level that would have been regarded as inconceivable a few years ago. The strategy has been based on yield neutrality — adjust price to generate the required traffic to fill the aircraft. Consequently, yield has fallen every year — from €48.20 per passenger in 2013 to €39.10 in 2018.