He can do it whatever way he likes - when you're a regular profitmaker and a big player the finance guys will form an orderly queue round the block - its not FlyBe3 - or he might do it out of cash - they have a US 1 Bn in the piggy bank..
"Ryanair posted record profit for the three months to December 31, after increasing airfares by 14% compared to their pre-pandemic level. It will report full year earnings on May 22."
https://www.finance-magazine.com/dis...?i=4203&pi=173
Treasury profile: how Ryanair does it
The underlying principles that determine how Ryanair treasury carries out its functions are the risk-averse nature of the Ryanair Group and the fact that the department is a cost centre and not a profit centre writes Neil Sorahan (Ryanair). Treasury activities and risks are managed so that their potential impact does not adversely affect Ryanair financial objectives of increasing EBITDA, maintaining margins and reducing costs. ........................................
Today Ryanair, which has the lowest fares and lowest costs of any airline in Europe, has achieved 15 years of continuous growth at high margins, enjoys a market cap in excess of E5 billion, employs more than 2,200 people and anticipates carrying somewhere in excess of 23 million passengers during the year to 31 March 2004 on its 135 routes. Of these routes, 50 were launched in financial year ended March 2003. In 2003, Ryanair increased its order with Boeing to take delivery of 125 Boeing 737-800 aircraft over the next eight years with an option to buy a further 125 aircraft during that period . Ryanair also completed its first airline acquisition in April 2003 when it acquired Buzz, a subsidiary of KLM. Following a restructure, 12 Buzz routes were successfully re-launched in May 2003.
Ryanair group treasury
During this period of rapid growth, Ryanair Group Treasury (Treasury) has evolved with the business. .................
The Group has a strict policy that no speculative trading in financial instruments shall take place.
Cash management
Due to increased profitability and strong cash flow generation over the past number of years, Ryanair has in excess of €1.1 billion cash on its balance sheet and a net cash position of €168 million at quarter ended 30th September, 2003.
Financing
Corporate and investment funding needs arise primarily from the purchase of new aircraft. The most recent transaction, announced in January of 2023, was an agreement by Ryanair with The Boeing Company to purchase 125 Boeing 737-800 aircraft with an option to buy up to a further 125 aircraft to be delivered over the next eight years.
The Group has financed the purchase of its last 41 aircraft with long-dated amortising bank debt, guaranteed by the Export Import Bank of the United States of America (EXIM). This source of financing has enabled the Group to finance its aircraft at very competitive low cost pricing.
Foreign exchange, interest rate & fuel risk management
Ryanair has a euro denominated balance sheet and profit & loss account. However a large proportion of its costs are US dollar denominated - namely jet fuel, maintenance costs, insurance and aircraft. In addition a significant portion of the Group revenues is in sterling pounds. Where possible, foreign exchange risk is reduced by holding significant assets/liabilities in euro; matching foreign currency income and expenditures with each other; and using financial instruments to hedge a high percentage of the remaining exposures on a twelve-month rolling basis.
Ryanair has traditionally favoured a high level of fixed rate debt. More recently however, in recognition of the fact that the Group has in excess of €1.1 billion floating rate cash, it has taken on floating rate debt that can be matched with floating rate cash to provide a natural interest rate hedge.
Finally, jet fuel costs are Ryanair single largest operating expense. The Group fuel risk policy is to hedge between 70 per cent and 90 per cent of its forecast rolling annual volumes required to ensure that the future cost per gallon is locked in. This policy has been adopted to prevent exposures, in the short-term, to adverse movements in world jet fuel prices and has served the Group well over the past number of years.
Like it or not we do live in interesting and challenging times. As such it is important that an organisation such as Ryanair eliminate as much uncertainty and risk as possible from its decision making process so that it can manage the business that it knows best - namely a low cost/ no frills airline. Treasury endeavours to facilitate this through the implementation of its various treasury polices and the strict adherence to best practice and controls in its day-to-day activities.
Neil Sorahan is head of treasury at Ryanair.