Ryanair: Navigating Near-Term Headwinds for Long-Term Reward

The aviation sector’s recovery post-pandemic has been uneven, but Ryanair (RYAI) stands at a critical juncture. While Boeing’s (BA) 737 MAX production delays and regulatory hurdles cast a shadow over its near-term growth, the airline’s undervalued stock and moderating fare pressures hint at a compelling opportunity. This analysis weighs the risks of Boeing’s protracted delays against Ryanair’s structural advantages in Europe’s low-cost carrier market, arguing for a strategic entry into this stock as capacity constraints ease.

The Near-Term Risks: Boeing’s Delays and Regulatory Gridlock

Ryanair’s fleet expansion plans hinge on Boeing’s ability to deliver the 737 MAX 10, a high-capacity variant critical to its long-haul strategy. However, Boeing’s production bottlenecks—rooted in labor strikes and FAA scrutiny—have stalled deliveries. As of May 2025, only 15–25 of Ryanair’s Q2 MAX deliveries were fulfilled, compared to a target of 29. This has forced Ryanair to slash its FY2025 passenger forecast to 210 million, down from 215 million, and accept 5% year-on-year fare declines due to oversupply and competitive pricing.

Boeing’s delays also introduce financial risks. The airline has already lost $550 million in FY2024 due to delivery shortfalls, with losses compounding as each delayed aircraft costs ~$5 million in lost revenue. Furthermore, the FAA’s certification timeline for the MAX 7—a prerequisite for the MAX 10—remains uncertain, with approvals now likely delayed to late 2025. Without these aircraft, Ryanair’s fleet modernization is stalled, and its ability to reduce unit costs and compete with Airbus-backed rivals (e.g., the A321XLR) is constrained.

The Positive Signs: Moderating Fares and Strong Demand

Despite these headwinds, Ryanair’s fundamentals are improving. Fare declines have slowed from 10% in early 2025 to a projected 5% annualized, suggesting demand resilience. This aligns with Europe’s robust travel recovery: Ryanair’s summer 2025 schedule is 98% booked, with load factors exceeding pre-pandemic levels.

Crucially, Ryanair’s valuation metrics now reflect this undervaluation. The stock trades at 6.5x EV/EBITDA, a 30% discount to its five-year average and below peers like EasyJet (EZJ.L). Its P/B ratio of 0.75 suggests it is trading below tangible book value, offering a margin of safety. Meanwhile, Boeing’s struggles have weakened its pricing power, with Ryanair threatening to shift to cheaper alternatives like COMAC’s C919 if tariffs make Boeing uncompetitive—a negotiating lever that could pressure Boeing to accelerate deliveries.

The Investment Thesis: Opportunistic Entry at a Strategic Inflection Point

Ryanair’s valuation and demand trends position it as a high-reward, medium-risk bet for investors willing to endure near-term volatility. Key catalysts include:
1. Boeing’s MAX 10 Delivery Timeline: If the MAX 10 enters service by mid-2027, Ryanair can deploy its 150 MAX 10 orders to expand capacity on high-margin routes, reducing unit costs by ~15%.
2. Fare Stabilization: Slowing declines and rising demand suggest Ryanair could reverse its revenue trajectory by 2026, with fare hikes possible as supply tightens.
3. Competitive Advantages: Ryanair’s cost discipline and route network remain unmatched in Europe. Even if Boeing’s delays persist, its fleet of 400+ MAX 8/9 aircraft ensures operational stability.

Conclusion: A Strategic Call to Action

Ryanair’s stock is priced for failure, yet its demand resilience and valuation suggest it is undervalued by 30–40%. While Boeing’s delays are a near-term drag, the airline’s path to recovery hinges on two inflection points: the MAX 10’s certification and the stabilization of fare declines. For investors with a 2–3 year horizon, this presents a compelling opportunity to buy a low-cost leader at a discount.

Recommendation: Accumulate Ryanair (RYAI) at current levels, targeting a 20–30% upside by 2026 as capacity constraints ease and demand outpaces supply. Monitor Boeing’s production metrics and FAA approvals closely—any positive news on MAX 10 delivery timelines could trigger a sharp rerating.

Investors willing to ride out short-term volatility stand to benefit from Ryanair’s structural dominance in Europe’s low-cost travel market.