Ryanair Holdings plc RYAAY posted impressive August traffic numbers despite numerous flight cancellations due to ATC staff shortages and labor-unrest. Traffic in the month (including that from its LaudaMotion unit), rose 9% year over year to 13.8 million, while load factor remained fixed at 97% primarily owing to cheap air fares. The company’s Laudamotion unit in Austria recorded a traffic of 0.5 million customers. However, excluding traffic from LaudaMotion unit, the European low-cost carrier’s passenger growth was only 5% in the month.
The carrier faced a major strike on Aug 10, when pilots across five of its European destinations walked out on failure to come to conclusive agreements with the unions. The labor-conflict coupled with ATC staff shortages in the UK, Germany and France caused approximately 550 flight cancellations in August, thereby affecting more than 100,000 passengers. In August 2017, there were only 27 flight cancellations.
To put an end to the labor-related issues, the carrier recently reached an agreement with the pilots' union (Fórsa), representing the Irish pilots. In another development, the low-cost carrier inked a deal with its Italian pilots. Final ratification of the deals is pending.
The deals on materialization are anticipated to provide Ryanair a much-needed respite from long-standing labor-disputes, which significantly hampered operations.
Zacks Rank & Key Picks
Ryanair has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Transportation sector include SkyWest, Inc SKYW, C.H. Robinson Worldwide, Inc. CHRW and Trinity Industries, Inc. TRN. While, C.H. Robinson holds a Zacks Rank #2 (Buy), SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest, C.H. Robinson and Trinity have rallied more than 80%, 32% and 24%, respectively, in a year.
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