I hope you are all well.
I hesitate to add the DD flair as I haven't performed technical analysis (idk how/not confident in my abilities to do this successfully) however for the reasons I will list below I believe Ryanair’s upcoming earnings offers an opportunity. This is because:
Increased Demand for Air Travel:
The past year has seen a significant increase in demand for air travel as the world continues to recover from the pandemic. Despite this, the effects of the pandemic on people's finances are still felt resulting in more “restrained” holiday planning. This positions budget airlines in a very good position and Ryannair has capitalised, attracting customers by offering very competitive prices as well as a wider range of destinations than many of its competitors in the travel industry.
Strong performances over Christmas are predicted to be followed as according to Chief Executive Michael O'Leary the outlook for summer travel is very strong
Cost-Cutting Measures/Improved Operational Efficiency:
In recent years, Ryanair has improved its financial performance through several cost cutting measures. The company has reduced its fuel costs by purchasing fuel in bulk and negotiating better prices with suppliers. They have reduced its labor costs by outsourcing some of its operations and implementing a more efficient scheduling system. This improved scheduling system streamline its operations increasing the utilisation of aircraft and crew, helping reduce the number of spare aircraft and crew needed. Additionally it has also helped Ryanair to improve its on-time performance (lowering costly delays and cancellations). This results in better customer service and will make repeat customers more likely.
Importantly their load factor (how full a plane is) is close to 92 percent of 2019 levels which is very healthy. This in combination with recent news that they will receive 40/45 of 51 Boeing 737 MAX aircrafts in May (which was in doubt for quite a while) should enable them to keep up with the increasing air travel without losing customers to their competitors
More anecdotally these budget airlines tend to be shit (unreliable, unpleasant,etc) however friends of mine had no complaints when traveling home for Christmas recently. (also I really like their social media as its funny and this is probably the biggest reason to invest)
I must be honest and admit I have never traded options however for the reasons listed above I believe Ryanair has a strong business and could exceed market expectations on earnings next week. For these reasons I am considering calls.
I'm curious to see what you think, and also if the technical analysis agrees/disagrees. Also please let me know if i've missed something obvious as I rather not have to post loss porn.
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