Relative Values:
Ryanair, easyJet and Wizzair Sep/Oct 2025

Ryanair’s network (in terms of routes flown, not seat capacity) simply dominates Europe. Some 15 years ago some analysts predicted an imminent saturation point where Ryanair would be unable to find any more viable routes. Ryanair defied these forecasts and continued to add the most unlikely of points to its network. The red splodge on the map represents the current state: a total of 2,458 city-pairs and 2,555 airport-pairs. About 79% of the city-pairs have no mainstream LCC competition (there may be other regional carriers or niche carriers on some routes).

The maps also show where Ryanair comes into direct competition with Wizzair or easyJet. The blue patch centred on Eastern Europe is where Wizzair and Ryanair fly the same routes — the competing routes represent just 9% of Ryanair’s total but 27% of Wizzair’s.

Is this degree of overlap sufficient to ensure that a Ryanair/Wizzair merger would be blocked by anti-competitive objections? Probably, but there are still some decent arguments for such a merger, at least from Ryanair’s perspective.

The purchase price might be right. Wizzair’s stock market capitalisation is about €1.42bn dwarfed by Ryanair’s is €28bn. Expressed in terms of valuation per seat (which are similar in terms of unit revenue) Wizzair is worth €19 or 14% of Ryanair’s €135.

A takeover would give Ryanair a dual Boeing/Airbus fleet, something that it has been seeking for some time in order to maximise competition between the two manufacturers. Access to Wizzair’s order backlog of approximately 300 NEOs would solve most of the MAX supply problems impacting Ryanair.

On the other hand, Ryanair and its investors might find the gap between its and Wizzair’s financial performances to be too wide and risky to take on. Yields in terms of passenger revenue per passenger are similar — €46 for Wizzair, €48 for Ryanair — but unit costs excluding fuel per seat are 44% higher at Wizzair, €49 against €34. And Wizzair’s balance sheet is stressed: net debt including capitalised operating lease obligations is €66 per seat at Wizzair in absolute contrast to -€6 at Ryanair (it is negative because cash balances are greater than debt).

The two airlines’ fleet strategies are going in opposite directions. Wizzair has just reached an agreement with Airbus to defer 88 A320 NEOs deliveries from 2026-2030 to 2033 and after. It has also converted 36 A321 XLR orders to A321 NEOs, having seemingly abandoned plans for long-haul operations following the failure of its Abu Dhabi base. The aim is to halve Wizzair’s planned seat capacity growth to around 10% pa up to 2030, but this still looks too aggressive.

Ryanair currently operates 616 737 NGs and MAXs and has 161 MAXs on order, and it also has the Lauda fleet of 26 A320s. The short/medium-term plan is for 800 737s and probably 200 A321 NEOs.

This implies a resumption of the aggressive growth that characterised Ryanair’s most successful periods and indicates confidence that the MAX production problems have been resolved. If achieved, this growth should allow Ryanair to maintain its distinct cost advantage. Ryanair has a total unit cost advantage of 27% over Wizzair and 70% over easyJet.

The easyJet/Ryanair overlap is mostly centred on the UK and flows south — the orange patch on the map represents routes flown by both carriers. 22% of easyJet’s city-pairs overlap with Ryanair; for Ryanair the overlap is equivalent to 12% of its network.

The easyJet and Ryanair models have diverged over the years. Ryanair has maintained a laser-like focus on costs, and re-educating passengers as to how to fly, its latest move being to practically oblige all passengers to check in using its phone app rather than using a print-out of a boarding pass. easyJet’s onboard service is not noticeably different from Ryanair’s (both are usually friendly), but easyJet has been able to extract a premium by flying to/from primary airports and also by having more customer-friendly timings on some routes. So easyJet’s passenger revenue per passenger at €73 is about 50% higher than Ryanair’s.

Incidentally, easyJet has just celebrated its 30th birthday and produced a report proclaiming the benefits in has brought to travellers and the economy. One of the more interesting observations : when easyJet was just starting out, it advertised the fact that a flight from London to Glasgow at £32 was cheaper than a pair of jeans (it was a slightly odd comparison even at the time). Today easyJet could claim, if it wanted to, a major cost advantage over a pair of Levis, which are now priced at about £100 whereas easyJet’s starting fare is just £26.

In recent years easyJet’s major initiative has been the development of its Holiday product, traditional two-week packages and city breaks, but with an emphasis on quality. It has just launched its Luxury Collection — 70 five-star hotels across Europe and North Africa. The impact on total revenue per passenger has been marked — it is now about €120 per passenger, 66% above Ryanair’s €72.

Yet the stockmarkets do not appear to appreciate easyJet’s strategy. Its book equity per seat is €32, close to Ryanair’s €34, but the stockmarket valuation is €38 against €135. This has led to led to M&A speculation. Back in 2021 Wizzair made a tentative offer and was repulsed, and there doesn’t seem it be any desire to explore this merger idea despite the fact there is minimal overlap between the two networks, and they are both have NEO fleet policies. Earlier this year there were reports that MSC, the world’s largest maritime containerline was interested but nothing came of the rumours. Private equity funds are supposed to be lurking in the background.

easyJet might benefit from being taken private because of the scale of its capex programme. About 80 out of its backlog of its 290 NEOs are due for delivery up to 2029, implying capex of up to €4.4bn.

Overall, profit margins for the European LCC industry have been relatively modest. In our review period, Wizzair produced an EBIT margin of 3.0%, easyJet, 6.4% while Ryanair achieved 14.4%, but even this was well below the peak in 2018 of 22.5%. Still, the European LCC sector compares very well with the US equivalent where, through a combination of self-inflicted wounds (mostly failed mergers) and a much more effective competitive response from the network carriers, the sector has slumped.