Stefan Ćulibrk of Highway One Asset Management presented his investment thesis on Ryanair (Ireland: RYA, US: RYAAY) at Wide-Moat Investing Summit 2025.

Thesis summary:

Ryanair stands out as a best-in-class, low-cost airline that has managed exceptional growth and capital efficiency in an industry known for intense capital expenditures and high leverage. Unlike its peers — such as IAG, Lufthansa, and Air France-KLM, which have significantly increased share counts and accumulated substantial debt to finance fleet expansions — Ryanair has uniquely reduced its share count and maintained a net cash position, recently boasting a negative net debt/EBITDA ratio of -0.4x, indicative of its robust balance sheet strength.

Ryanair’s disciplined, low-cost model benefits from a combination of factors, including complete aircraft ownership, efficient operational management, and a relentless focus on cost control driven by its fanatically committed owner-operator culture. This operational model has enabled Ryanair to achieve consistently superior ROCE, outperforming competitors. Furthermore, Ryanair’s ability to sustainably charge higher average fares while maintaining low costs positions the company advantageously amid rising European emissions trading scheme (ETS) costs, which disproportionately affect rivals.

The competitive landscape further amplifies Ryanair’s strategic advantage. With Boeing and Airbus fully booked for the next decade, competitors are constrained from swiftly expanding their fleets. At the same time, competitors like Wizz Air are incrementally shifting away from Europe, reducing direct competitive pressures within Ryanair’s core market. Ryanair is expected to capitalize on this environment, significantly increasing net profit per passenger beyond previous peaks, supported by stable and growing market share in the European airline market.

Despite industry nuisances and macroeconomic risks — including oil price volatility, economic cycles, and environmental regulations — Ryanair’s resilient operating model, strong financial position, and pricing power make it an attractive investment, particularly in a sector otherwise characterized by significant capital intensity and cyclical challenges.

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About the instructor:

Stefan Ćulibrk invests on behalf of Highway One Fund in a select group of publicly-listed businesses that either are or have the potential to become world-class. Before starting Highway One, Stefan managed his family’s investments and worked at Bank of America Merrill Lynch’s London office.

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