Ryanair share price struggles to regain altitude

Ever since Ryanair’s dispute with the pilots’ union in September 2017, the airline has been struggling, with the share price down by half from its peak.

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Michael O'Leary is winding down his racing operations "in order to spend more time with his family", says Alistair Osborne in The Times. But after Ryanair's latest results, you have to wonder if he'd have done better to give up the airline and keep the horses.

Ever since Ryanair's dispute with the pilots' union in September 2017, the airline has "been struggling to hit former heights"; the shares have halved from their peak.They slipped again earlythis week thanks to a 29%drop in full-year profits to €1.02bn after tax.

Ryanair's problem is that many of its costs, notably rising fuel prices, are "out of its hands", while it is beingforced to slash fares in orderto maintain growth, saysEd Cropley for Breakingviews. Still, ancillary revenue was the "one bright spot" as "sales of everything from food and drinks to reserved seats and priority baggage jumped 19% to €2.4bn, a third of all the airline's top line". Indeed, if Ryanair is able to replicate last year's "bumper" performance by flogging "ever more expensive on-board snacks", this could add another €455m to Ryanair's top line, "all but wiping out the budgeted rise in fuel prices".

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It's not just Ryanair that is feeling the pinch, as easyJet is also struggling owing to intense competition and a public "increasingly looking to save every penny and cent", says Jim Armitage in the Evening Standard. The group lost £275m in its winter half,but it is working very hardto reduce costs, and "thisself-help will set [easyJet]up well for when times, eventually, improve".

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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