Should Investors Buy RYAAY Post a Bullish Fiscal 2026 Traffic Outlook?

Core Insights - Ryanair Holdings (RYAAY) has raised its traffic outlook for fiscal 2026 to 207 million passengers, reflecting a growth of over 3% from the previous estimate of 206 million, driven by earlier Boeing deliveries and strong demand [3][8] - The company anticipates modest unit cost inflation during fiscal 2026, as effective cost control and fuel hedging will help offset rising air traffic control charges and environmental costs [3][8] - Despite a positive outlook, Ryanair remains cautious about the second half of fiscal 2026, with third-quarter fare outcomes dependent on close-in Christmas and New Year bookings [4] Financial Performance - Ryanair's passenger traffic grew by 9% to 183.7 million in fiscal 2024 and reached 200.2 million passengers in fiscal 2025, making it the first European airline to achieve this milestone [6] - The company ended the second quarter of fiscal 2026 with cash and cash equivalents of $3.58 billion, significantly higher than its current debt level of $1.40 billion, indicating a strong balance sheet [10] - Ryanair has been active in share buybacks, having repurchased and canceled 7% of its issued share capital during fiscal 2025, with ongoing buyback programs in place [13] Operational Developments - Ryanair's fleet modernization efforts include the delivery of 532 Boeing 737NG aircraft and 176 new Boeing 737-8200s, enhancing fuel efficiency and aligning with environmental goals [7][9] - As of October 2025, 204 of the 210 Boeing 737-8200 aircraft had been delivered, with the remaining six expected before the summer season of fiscal 2026 [8][18] - The company has placed orders for 300 new Boeing 737-MAX-10 aircraft for delivery between 2027 and 2033, which are expected to drive substantial growth [9] Challenges - Production delays at Boeing have impacted Ryanair's fleet expansion plans, with ongoing discussions to expedite aircraft deliveries [17] - Rising operating expenses, including a 3% increase in staff costs and a 4% rise in airport and handling charges, have pressured Ryanair's margins [19] - Earnings estimates have been revised downward due to these headwinds, indicating potential challenges ahead [20][21]