The Zacks Analyst Blog Azul, Volaris, Allegiant, JetBlue and Ryanair
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 03 2025
0mins
Source: NASDAQ.COM
Airline Performance Overview: Azul and Volaris reported disappointing fourth-quarter results for 2024, missing earnings expectations, while Allegiant Travel showed positive traffic growth. JetBlue Airways plans to launch a new route to meet increasing air travel demand.
Market Trends: The NYSE ARCA Airline Index declined by 7.4% recently, despite a 28.4% increase over the past six months, as most airline stocks traded negatively. Ryanair is expected to report improved traffic results due to strong air-travel demand.
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Analyst Views on RYAAY
Wall Street analysts forecast RYAAY stock price to rise
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Current: 60.640
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Current: 60.640
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About RYAAY
Ryanair Holdings PLC is the leading airline group by passenger numbers in Europe. The company employs a low-cost no-frills model to offer low fares to leisure customers on short-haul intra-European routes. In 2020, the most recent pre-pandemic fiscal year, the company carried 149 million passengers, utilizing a fleet of 467 Boeing 737 aircraft across its 1,800 routes. To keep costs low the company serves predominantly lower-cost secondary airports. The company generated sales of EUR 8.5 billion in fiscal 2020.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Decline of Low-Cost Airline Options in the U.S.
- Market Shift: The exit of Spirit Airlines has reduced low-cost flight options, forcing consumers to face higher fares during the busy summer travel season, which may adversely affect families and budget travelers.
- Premium Market Growth: Delta Air Lines reported a record annual revenue of $58.3 billion for 2025, despite a $1.1 billion drop in economy ticket sales, with 60% of revenue now coming from premium cabins and loyalty programs, indicating a shift in consumer preference towards higher-end services.
- Fuel Cost Pressure: U.S. carriers spent 56.4% more on jet fuel in March 2026 compared to February, totaling $5.06 billion, which compels airlines to raise fares to cope with rising costs, significantly impacting smaller carriers.
- Future of Low-Cost Carriers: While new entrants like Breeze Airways aim to fill the void left by Spirit, high fuel costs and competitive pressures pose challenges to the profitability of low-cost airlines, leaving their future growth uncertain.
See More
Ryanair Extends CEO Michael O'Leary's Contract to 2032
- Contract Extension: Ryanair announced the extension of CEO Michael O'Leary's contract until 2032, a decision made after months of discussions with shareholders, reflecting the company's trust and support for his leadership.
- Compensation Structure: The new contract includes a modest annual salary and capped bonuses, along with a new one-off option for over 10 million ordinary shares, which will only vest if specific financial and share price targets are met, ensuring alignment between executive incentives and company performance.
- Shareholder Engagement: This arrangement follows engagement with the largest shareholders and will be put to an advisory vote at the 2026 annual general meeting, indicating the company's commitment to shareholder input and participation in decision-making processes.
- Leadership Stability: O'Leary has led Ryanair for decades, and the contract extension not only ensures management stability but also helps the company maintain a consistent strategic direction amid future market challenges.
See More
Airline Profits Expected to Halve Amid Rising Fuel Costs
- Fuel Cost Surge: The International Air Transport Association (IATA) warns that global airline profits are expected to halve in 2026, with net profits dropping from $45 billion to $23 billion, primarily due to a 70% year-on-year increase in fuel prices, adding an additional $100 billion to airline fuel bills.
- Ticket Price Increases: Despite resilient travel demand, airlines are raising fares to cope with cost pressures, with an IATA poll indicating that 86% of travelers expect ticket prices to align with oil prices, and 49% anticipate higher travel spending this year compared to last.
- Financial Strain on Airlines: EasyJet reported a £552 million pre-tax loss for the first half of its financial year and incurred an additional £25 million in fuel costs in March, highlighting the severe impact of high fuel prices on airline profitability.
- Intensified Market Competition: Ryanair's CEO warns that if fuel prices remain high, many European airlines may face financial difficulties, potentially leading to failures, which could, in the medium term, benefit Ryanair's business.
See More
IATA Predicts Airline Profitability to Halve by 2026 Amid Rising Fuel Costs
- Profitability Outlook: The International Air Transport Association (IATA) forecasts that global airline net profits will plummet from $45 billion to $23 billion by 2026, with net margins shrinking from 4.2% to 2.0%, primarily due to surging fuel costs impacting profitability.
- Fuel Cost Surge: Oil prices surged over $100 per barrel in March due to Middle Eastern conflicts, leading to a 62.4% year-over-year increase in jet fuel prices, and airlines are expected to face an additional $100 billion in fuel expenses this year, exacerbating financial pressures across the industry.
- Airlines' Response: While travel demand remains robust, airlines have begun raising fares to cope with rising costs, with 86% of travelers expecting ticket prices to align with oil prices, indicating consumer sensitivity to higher connectivity costs.
- Intensified Market Competition: Carriers like EasyJet and Lufthansa are grappling with additional fuel cost burdens, with EasyJet reporting a £552 million pre-tax loss in the first half of its financial year, while Lufthansa anticipates €1.7 billion in extra fuel costs, intensifying competition within the industry.
See More
SpaceX Set to Launch Largest IPO in History
- Historic IPO: SpaceX has officially set a fixed price of $135 per share for its IPO next week, achieving a valuation of $1.77 trillion, which will make CEO Elon Musk the world's first trillionaire, marking a significant success in the aerospace sector.
- Market Response: Despite the high expectations for SpaceX's IPO, a review of 30 major IPOs over the past 15 years indicates that stocks often experience declines and sharp drawdowns in the first year, prompting investors to approach with caution regarding potential risks.
- SoftBank's Risks: SoftBank's highly leveraged investments in artificial intelligence have raised liquidity crunch concerns, and although its shares have surged about 70% this year, analysts warn that the market's renewed optimism may be masking mounting balance-sheet risks.
- Middle East Situation Impact: The ceasefire agreement between Israel and Lebanon has eased oil prices slightly, boosting hopes for a potential deal between the U.S. and Iran, which could influence global economic conditions and investor confidence.
See More
Middle East Tensions Impact Market Volatility
- Escalating Middle East Tensions: Israeli Prime Minister Netanyahu stated that Israel and the U.S. are prepared to take military action against Iran if necessary, which pushed oil prices higher despite a ceasefire agreement with Lebanon, highlighting the complexity of the situation.
- U.S. Congressional Response: The U.S. House passed a war powers measure to end military involvement in Iran, reflecting growing congressional pushback against the scope and duration of the conflict, although the measure still needs Senate approval and could face a presidential veto.
- Corporate Earnings Impact: Broadcom's shares plummeted nearly 14% in after-hours trading due to weaker-than-expected software revenue and failure to raise its full-year AI chip sales target, negatively impacting Wall Street's recent tech-led rally.
- Bitcoin Market Dynamics: Long-term holders of Bitcoin have begun selling, with approximately $2.4 billion sold in the past two days, which could significantly affect Bitcoin's supply/demand balance, particularly as 26% of the sold Bitcoin was purchased above $90,000.
See More
Decline of Low-Cost Airline Options in the U.S.
- Market Shift: The exit of Spirit Airlines has reduced low-cost flight options, forcing consumers to face higher fares during the busy summer travel season, which may adversely affect families and budget travelers.
- Premium Market Growth: Delta Air Lines reported a record annual revenue of $58.3 billion for 2025, despite a $1.1 billion drop in economy ticket sales, with 60% of revenue now coming from premium cabins and loyalty programs, indicating a shift in consumer preference towards higher-end services.
- Fuel Cost Pressure: U.S. carriers spent 56.4% more on jet fuel in March 2026 compared to February, totaling $5.06 billion, which compels airlines to raise fares to cope with rising costs, significantly impacting smaller carriers.
- Future of Low-Cost Carriers: While new entrants like Breeze Airways aim to fill the void left by Spirit, high fuel costs and competitive pressures pose challenges to the profitability of low-cost airlines, leaving their future growth uncertain.
See More
Ryanair Extends CEO Michael O'Leary's Contract to 2032
- Contract Extension: Ryanair announced the extension of CEO Michael O'Leary's contract until 2032, a decision made after months of discussions with shareholders, reflecting the company's trust and support for his leadership.
- Compensation Structure: The new contract includes a modest annual salary and capped bonuses, along with a new one-off option for over 10 million ordinary shares, which will only vest if specific financial and share price targets are met, ensuring alignment between executive incentives and company performance.
- Shareholder Engagement: This arrangement follows engagement with the largest shareholders and will be put to an advisory vote at the 2026 annual general meeting, indicating the company's commitment to shareholder input and participation in decision-making processes.
- Leadership Stability: O'Leary has led Ryanair for decades, and the contract extension not only ensures management stability but also helps the company maintain a consistent strategic direction amid future market challenges.
See More
Airline Profits Expected to Halve Amid Rising Fuel Costs
- Fuel Cost Surge: The International Air Transport Association (IATA) warns that global airline profits are expected to halve in 2026, with net profits dropping from $45 billion to $23 billion, primarily due to a 70% year-on-year increase in fuel prices, adding an additional $100 billion to airline fuel bills.
- Ticket Price Increases: Despite resilient travel demand, airlines are raising fares to cope with cost pressures, with an IATA poll indicating that 86% of travelers expect ticket prices to align with oil prices, and 49% anticipate higher travel spending this year compared to last.
- Financial Strain on Airlines: EasyJet reported a £552 million pre-tax loss for the first half of its financial year and incurred an additional £25 million in fuel costs in March, highlighting the severe impact of high fuel prices on airline profitability.
- Intensified Market Competition: Ryanair's CEO warns that if fuel prices remain high, many European airlines may face financial difficulties, potentially leading to failures, which could, in the medium term, benefit Ryanair's business.
See More
IATA Predicts Airline Profitability to Halve by 2026 Amid Rising Fuel Costs
- Profitability Outlook: The International Air Transport Association (IATA) forecasts that global airline net profits will plummet from $45 billion to $23 billion by 2026, with net margins shrinking from 4.2% to 2.0%, primarily due to surging fuel costs impacting profitability.
- Fuel Cost Surge: Oil prices surged over $100 per barrel in March due to Middle Eastern conflicts, leading to a 62.4% year-over-year increase in jet fuel prices, and airlines are expected to face an additional $100 billion in fuel expenses this year, exacerbating financial pressures across the industry.
- Airlines' Response: While travel demand remains robust, airlines have begun raising fares to cope with rising costs, with 86% of travelers expecting ticket prices to align with oil prices, indicating consumer sensitivity to higher connectivity costs.
- Intensified Market Competition: Carriers like EasyJet and Lufthansa are grappling with additional fuel cost burdens, with EasyJet reporting a £552 million pre-tax loss in the first half of its financial year, while Lufthansa anticipates €1.7 billion in extra fuel costs, intensifying competition within the industry.
See More
SpaceX Set to Launch Largest IPO in History
- Historic IPO: SpaceX has officially set a fixed price of $135 per share for its IPO next week, achieving a valuation of $1.77 trillion, which will make CEO Elon Musk the world's first trillionaire, marking a significant success in the aerospace sector.
- Market Response: Despite the high expectations for SpaceX's IPO, a review of 30 major IPOs over the past 15 years indicates that stocks often experience declines and sharp drawdowns in the first year, prompting investors to approach with caution regarding potential risks.
- SoftBank's Risks: SoftBank's highly leveraged investments in artificial intelligence have raised liquidity crunch concerns, and although its shares have surged about 70% this year, analysts warn that the market's renewed optimism may be masking mounting balance-sheet risks.
- Middle East Situation Impact: The ceasefire agreement between Israel and Lebanon has eased oil prices slightly, boosting hopes for a potential deal between the U.S. and Iran, which could influence global economic conditions and investor confidence.
See More
Middle East Tensions Impact Market Volatility
- Escalating Middle East Tensions: Israeli Prime Minister Netanyahu stated that Israel and the U.S. are prepared to take military action against Iran if necessary, which pushed oil prices higher despite a ceasefire agreement with Lebanon, highlighting the complexity of the situation.
- U.S. Congressional Response: The U.S. House passed a war powers measure to end military involvement in Iran, reflecting growing congressional pushback against the scope and duration of the conflict, although the measure still needs Senate approval and could face a presidential veto.
- Corporate Earnings Impact: Broadcom's shares plummeted nearly 14% in after-hours trading due to weaker-than-expected software revenue and failure to raise its full-year AI chip sales target, negatively impacting Wall Street's recent tech-led rally.
- Bitcoin Market Dynamics: Long-term holders of Bitcoin have begun selling, with approximately $2.4 billion sold in the past two days, which could significantly affect Bitcoin's supply/demand balance, particularly as 26% of the sold Bitcoin was purchased above $90,000.
See More
