Ryanair’s outlook revised to positive by Fitch, IDR affirmed at BBB+

Investing.com -- Fitch Ratings has revised Ryanair Holdings plc’s outlook to positive from stable while affirming the airline’s Long-Term Issuer Default Rating (IDR) at ’BBB+’.

The outlook change reflects Fitch’s expectation that Ryanair will maintain a strong financial profile consistent with an ’A-’ category rating, supported by solid operating performance and positive free cash flow despite increased capital expenditure.

Ryanair has demonstrated a robust financial profile with a 1.0x EBITDAR leverage at the end of fiscal year 2025 and maintained a net cash position. Fitch expects EBITDAR to grow over the next three years, driven by increasing capacity and airfare recovery in FY26.

The airline reported strong results for the first quarter of FY26, though performance was partly inflated by a weak comparison base and the full benefit of Easter travel. EBITDAR declined to €2.8 billion in FY25 from €3.1 billion in FY24, primarily due to a 7% reduction in airfares, which contributed to passenger growth reaching 200 million.

Ryanair expects to reach 215 million passengers in FY27, supported by a target fleet of 655 aircraft, including 210 Boeing 737-8200 "Gamechangers" to be delivered by summer 2026. The company plans further growth to 300 million passengers by FY34, underpinned by its 2023 order for 300 Boeing 737 MAX-10 aircraft.

Fitch forecasts EBITDAR leverage will decrease to an average of 0.3x in FY26-FY28 with Ryanair remaining in a net cash position. The airline plans to repay two upcoming bond maturities - €850 million in September 2025 and €1.2 billion in May 2026 - using available cash.

The rating agency noted Ryanair’s unit cost remains lower than EU-based competitors, with the gap widening in 1Q FY26. The company expects modest unit cost inflation of 1%-3% in FY26, with rising environmental and air traffic control costs offset by lower fuel prices and favorable fuel hedging.

Fitch would consider an upgrade if EBITDAR leverage fell well below 1.0x in the medium term with a sustained net cash position, also depending on Ryanair’s funding strategy for the new Boeing MAX-10 order, with peak deliveries expected after March 2028.

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