What's going on?

Ryanair reported better-than-expected results on Monday, as Europe�s biggest low-cost airline lives out all its mid-pandemic fantasy of seeing the world again.

What does this mean?

A few factors have been working in Ryanair�s favor lately: a successful vaccination rollout, Europe�s introduction of digital travel passports, and, of course, huge pent-up demand to go somewhere, anywhere new. That led to a surge in late summer bookings and a smaller-than-expected quarterly loss, and it�s been stoking hopes for a long-awaited rebound for Europe�s airlines.

Ryanair�s expecting to post a profit this quarter too, which should help the company just about break even when its financial year ends in March 2022. It also said it�s now expecting total passenger numbers to exceed 90 million by the same point. That�s up from a previous forecast of 80 million, sure, but it�s still a long-haul flight away from the 150 million people a year it used to ferry before the pandemic broke out�

Why should I care?

For markets: Choose your low-cost fighter.
Investors sent Ryanair�s shares 4% higher on Monday, and the firm�s optimistic travel outlook helped boost the stocks of other regional carriers: EasyJet and Wizz Air saw their share prices tick up 4% and 1.5% respectively (tweet this). But don�t be fooled: these three budget airlines are in fierce competition with one another to poach as much recovery-driven business as they can, which is why they�ve all outlined plans to grow rapidly as the pandemic starts to fade.

The bigger picture: Ryanair thinks long term.
Airlines often enter hedging contracts that allow them to buy a certain amount of jet fuel at a predetermined price, to protect them from the rising price of oil. And Ryanair, for its part, has already locked in 60% of its anticipated fuel purchases for the financial year at $565 per metric ton. That was probably a shrewd move: the price of oil hit a six-year high earlier this month, pushing the cost of jet fuel to $628 per metric ton.