Aug 23, 2019

Ryanair could be a contrarian gamble that actually takes off

Despite nearly 30 per cent of Ryanair's UK pilots taking the first of five days of strike action, the airline reported "97 per cent punctuality . . . without any disruption". Delays to deliveries of Boeing's 737 MAX aircraft have already cut summer 2020 revenue growth forecasts from 7 per cent to about 3 per cent, with a knock-on effect on earnings. While fares were down 6 per cent in the first half ancillaries were up 27 per cent and are expected to support overall revenue growth. Buying Ryanair's shares - 10 per cent cheaper since the UK strike ballot - might not be so different to buying a ticket: a contrarian gamble that actually takes off. Some of these measures are working: the casino initiatives and cost cuts turned a 35 per cent fall in first-half operating profit into a 40 per cent rise in the second half.

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