Ryanair shines in Dublin: repays last bond and becomes 'debt free'

(Il Sole 24 Ore Radiocor)- Air transport regained share in the stock market at the start of the week, thanks to the drop in oil prices, supported by hopes of an agreement between the US and Iran. In Paris Air France-Klm is clearly leading the gains and in Frankfurt Lufthansa is leading the way. Tourism and hospitality stocks, such as the German giant Tui and the French hotel chain Accor, also benefited from the Middle East clearing, although still uncertain. Over the weekend, US and Iranian political leaders sent encouraging signals towards a resolution of the Middle East conflict and the reopening of the Strait of Hormuz, which pushed oil prices (Brent crude below $100) down, boosting the Old Continent's stock markets.

Ryanair is celebrating on the Dublin Stock Exchange, thanks to the announcement of the redemption of its only outstanding bond issue, effectively becoming 'debt free' for the first time since its 1997 IPO. Helped also by the market's better disposition towards air transport in view of the drop in oil prices, the Irish low-cost company's stock marks its best level in a month. "Ryanair repaid its latest €1.2 billion bond today, 25 May, effectively freeing the group of debt ahead of a challenging summer of growth, characterised by low fares. It is the first time since the airline entered the stock market in 1997 that it has repaid its entire debt, remaining with a fleet of 620 Boeing 737s unencumbered," a statement said. "Today is a historic day for Ryanair, as our Group, after the repayment of the last €1.2 billion bond, is now effectively debt-free. Our strong balance sheet is supported by an unencumbered fleet of 620 Boeing 737s, solid ratings (BBB+) from Fitch and S&P and strong liquidity. This financial strength further widens the cost gap between Ryanair and our competitors, many of whom are exposed to expensive (long-term) debt and aircraft leases, and will enable Ryanair to continue to grow traffic at much lower fares than our competitors, delivering even greater value to consumers across Europe," commented Cfo Neil Sorahan, quoted in the release.

The group, which had issued the now-refunded bonds during the Covid crisis, plans to 'return to the bond markets in the future', when 'we will increase passenger traffic to 300 million per year by the fiscal year 2034 and receive up to 50 annual deliveries of Boeing MAX-10s starting in 2029'.