BofA Trims Ryanair Profit Forecast, Bets on Higher Fares From Tighter Capacity

Bank of America has revised its outlook for Ryanair, cutting its net profit forecast for the airline by 10% amid expectations for lower passenger traffic and higher fuel costs. Despite the downward revision, the bank's analysis suggests that disciplined capacity management over the winter could lead to stronger ticket prices and market share gains.

The Core Trade-Off

BofA's updated thesis centers on a strategic trade-off between passenger volume and pricing power. The bank now expects Ryanair's winter capacity to be flat year-over-year, leading to a reduction in its fiscal year 2027 traffic forecast to 214 million passengers.

While this limits growth, BofA analysts believe fewer available seats will support higher fares. The bank has raised its fare forecasts for the third and fourth quarters of the fiscal year.

• F3Q Fares: Forecast raised to +2%
• F4Q Fares: Forecast raised to +5%

The logic is that tighter capacity will help Ryanair protect its pricing, especially as competitors may also face constraints.

Cost Pressures and Profit Impact

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The primary headwind identified in the report is rising fuel costs. BofA has increased its fiscal year 2027 cost estimate for Ryanair to €5.9 billion, directly impacting profitability.

As a result, the bank has lowered its projected net profit for the airline by 10% to €1.7 billion. This creates a key tension for investors, pitting the potential for higher fares against the certainty of increased fuel expenses.

Valuation Provides a Cushion

Despite the reduced profit outlook, BofA's analysis indicates that Ryanair's valuation remains a key part of its investment case. The bank's valuation is based on a 13x price-to-earnings (P/E) multiple on estimated fiscal year 2028 earnings.

According to the source material, Ryanair has demonstrated recent resilience, with revenue growing from €13.44 billion in fiscal year 2024 to €15.54 billion in fiscal year 2026. BofA's positive thesis now depends more on the airline's ability to convert capacity discipline into fare strength than on pure traffic growth.