News & Analysis

Ryanair shares at 5-day high due as CEO blasts lockdown and forges ahead

Andrew Saks, Tuesday, 27 July 2021

The FTSE 100 index has become unusually volatile over the last few days, after a long period of high value stability.

It was big news a few months ago when the FTSE 100 index rose above the 7,000 mark for the first time in what may have seemed like an epoch, however London's most prestigious blue-chip companies have become so stable in terms of collective value, that the investing public has got used to this high value, and any trace of volatility has disappeared.

Until now, that is.

Last week, the FTSE 100 dropped below 7,000 as a result of some £54 billion having been wiped off the index as a result of airlines, and in particular budget airlines, having reported some extremely suboptimal results for the financial year.

This was largely caused by the combination of airline results, and partly due to concerns that large companies may have to close their doors once again as the noises from the government in the United Kingdom are looking very much like the next planned lockdown is on its way.

The FTSE 100 is still below 7,000 however there is an airline that is now on its way up, and that is Ryanair.

Almost uniquely among European carriers, Ryanair’s share price is higher now than it was in February 2020, before travel restrictions and the grounding of fleets saw investors take fright and wipe out most of airlines’ and travel firms’ market value.

Michael O'Leary, the firm's CEO, is known for his controversial and often direct speech, however he certainly knows how to run a business.

Ryanair stock is up today and is at its highest point in 5 days, having risen some remarkable 13% in the past week.

Just this morning, since the stock market opened at 8.00am in London, Ryanair stock is up 1.71% over the previous day's close, which was already very compared to its performance over the past few weeks.

This recent uptrend is interesting, as it follows similar uptrends before suddenly dropping which have occurred over the past year.

During the lockdown period, which has been a year and a half of Western governments going all out in their efforts to decimate the airline and travel industry, especially the budget airlines which have been providers of boundless freedom for everyone of every social standing for decades.

Ryanair has managed to buck this trend, and shareholders have shown various periods of interest.

Ryanair’s has bounced back – and is now almost 50% higher since O’Leary increased his stake in the autumn doldrums, making his share worth around €700m

As Ryanair's stock sits at a high 16.49 Euros today, after Mr O'Leary did what he is very good at - speaking his mind - and the truth - by loudly telling governments to stick their “scariants” and let everyone fly again.

Rather in the same vein as Johan Lundgren, CEO of easyJet, himself equally anti-lockdown, who stated that his firm will be ramping up flights last week, resulting in a rapid increase in the value of easyJet shares, Ryanair's leadership is exactly that - leadership.

And leadership is what investors want to see in the executives of the firms that they put their faith in.

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