DAVY VIEW

Ryanair will report its Q2 numbers on November 7th. We have updated our model for the latest traffic statistics and marked to market for the most recent fuel and exchange rate movements. We have lowered our FY2017 numbers to the bottom end of the guided range (€1.375-1.425bn) as volatile sterling (c.27% of revenues, 21% of costs) provides a significant headwind. We now see absolute yields falling 9.1% in H1 and 12.2% in H2. However, the business model has never been in better shape – we expect a material update on the Ryanair labs/ancillary growth targets (potentially c.30% of revenues) and a new buyback programme (potentially >€1bn) to be announced and to begin in early 2017. Volume growth, market share gains and cost discipline will remain relentless.