Finimize - ✈️ Ryanair is one step ahead

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Today's big stories

Ryanair managed aviation chaos better than most, and finally returned to profit last quarter
Investors believe inflation might finally have peaked, so here’s what that means for you, whether they're right or not – Read Now
French satellite operator Eutelsat is discussing a merger with UK rival OneWeb

Flown Away

What’s Going On Here?

Ryanair reported better-than-expected quarterly results on Monday.

What Does This Mean?

Ryanair makes the bulk of its profit by flying sun-seeking Europeans everywhere from Mykonos to Rome over the summer period. Good thing, then, that a couple of factors helped Ryanair overcome staff shortage-induced delays and cancellations better than its flight-slashing rivals last quarter. For one, Europe’s biggest discount airline kept more of its crew on the payroll and more of its planes in the hangars to wait for the rebound it’s seeing now. And for another, it generally flies out of smaller, less congested airports that have been less affected than other major hubs. So in the end, Ryanair flew 46 million passengers last quarter, nearly six times as many as the same time last year. That helped it make a profit – the first time in the quarter for three years – of $174 million, a huge leap from the near $300 million loss it took in the same period last year. Looks like investors have a new favorite airline: they sent its stock up 6%.

Why Should I Care?

The bigger picture: Even best laid plans…
Ryanair wants to use that momentum to win over more market share, so it plans to up the number of flights on offer this summer. But the outlook is clouded: it’s hard for the airline to predict long-term demand since cautious travelers are still making bookings last minute, and then there’s the ever-looming prospect of more Covid outbreaks during fall.

Zooming out: You can’t get the staff these days.
Airlines aren’t just struggling to replace staff they laid off during the pandemic: industry-wide strikes are also making it hard to keep operations going, with Lufthansa being the latest to face action this week. Ryanair’s trying to avoid that hassle: it’s already agreed with unions to reverse pay cuts for the majority of its pilots and crews, and thinks the rest should be settled soon.

You might also like: The highs and lows of investing in the airline industry.

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Analyst Take

Has Inflation (Finally) Peaked?

Stéphane Renevier, Analyst

Investors have been betting that inflation has finally peaked.

And if it has, the Federal Reserve could soon start scaling back its interest rate hikes, which would help boost the economy and riskier assets like stocks.

But here’s the thing: that may be an overly optimistic view.

See, while there are encouraging signs that inflation is easing, other signs suggest we’re going to be dealing with this for a while.

So that’s today’s Insight: whether inflation has finally peaked, and where to spot the opportunities amongst the uncertainty.

Read or listen to the Insight here

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