Ryanair Holdings: An exercise in de-branding — August 2019

Ryanair has been Europe’s most successful airline post liberalisation, in terms of traffic growth, profitability, and shareholder returns as well as, it claims, punctuality and environmental responsibility. It has, of course, also succeeded in attracting a regular stream of negative publicity over customer service and personnel relations. Its new Holdings structure looks like a brave attempt to overcome Ryanair brand problems, through the management are reluctant to present this strategy in this way. More fundamentally, it also has to address negative cost and profit trends.

Results for FY 2019 were well down on the previous year. Net profit (after tax) was €885.0m (including Laudamotion losses of €139.5m), 29% below FY 2018, despite traffic growing by 9% to 142m and total revenues by 7.6%. The net profit margin of 11.5% in FY 2019 was in sharp contrast to the 19-20% margins achieved in recent years. The profit outlook for this year is flat — Ryanair has issued guidance in a wide range, €750-950m for FY 2020 net profit, implying another decline in profit margins.