Brexit not clouding Ryanair’s long-term thinking

Michael O’Leary has indicated that Ryanair is likely to take up option to buy a further 100 aircraft

While Ryanair’s third-quarter results’ statement this week made it clear that it does not know what impact Brexit will have on the airline, the uncertainty has made no difference to its long-term expansion plans.

The UK electorate's decision to leave the EU throws up a number of questions for Ryanair and airlines and aviation generally. The biggest is whether the country can remain in the bloc's open skies system which allows member state-registered airlines free access to all EU airspace.

Ryanair this week pointed out that while we are heading for a “hard” Brexit, there was still uncertainty about what this means for all those questions, including the UK’s membership of open skies.

It expects continuing volatility in sterling, and a possible slowdown in both UK and European growth as Brexit edges closer.


Nevertheless, the airline’s chief executive, Michael O’Leary, indicated that it was likely to take up an option to buy a further 100 Boeing 737 Max aircraft on top of the 100 that it has already agreed to purchase. The move will ultimately mean that Ryanair will have a fleet of 520 aircraft by 2024 and carry 160 million passengers a year.

Whatever about shorter-term volatility that the prospect of Brexit has brought about, the company must believe that its longer-term targets remain realistic.

Ryanair does not have to decide on taking the aircraft option until the beginning of 2018, and it has not formally committed to doing so, but it does look like a decision is more or less made.

Separately from the decision on the aircraft option, it is also continuing with current capital spending plans. On Wednesday it raised €750 million through a bond issue to fund some of this.

Given that the bond issue drew €3 billion worth of offers, it is clear that the capital markets are also confident about Ryanair’s longer-term prospects.