The Ryanair share price will be in the spotlight after the upbeat comments from the company’s chief executive. The budget airline’s share price has been moving sideways in the past few days. It is trading at 15.775p, which is slightly below the year-to-date high of 18.00p.
Ryanair expects demand to rise
Ryanair and other budget airline companies like EasyJet and Wizz Air have emerged from this pandemic better than other large companies like IAG. The same trend has happened in the United States, where companies like Southwest have outperformed their larger peers like United and Delta.
This trend is mostly because these companies don’t make a lot of money on business travel. Instead, they make most of their income from tourists and people travelling for leisure purposes. Indeed, this is the main reason why British Airways, a company known for business travel, is planning to start its budget airline.
In a statement on Tuesday, Ryanair’s CEO, Michael O’Leary said that the company expects that its business will go back to pre-pandemic levels soon. This happened as the company carried more than 10.5 million customers in August even as the number of Covid cases jumped. The company expects to maintain this momentum in the coming months.
The company has made a lot of progress during the pandemic. It has added several routes and is about to receive about 55 Boeing 737 Max planes this year. It will also receive hundreds of the planes in the next few years, which will push its fleet to more than 600.
Still, Ryanair, like all other firms are seeing weak revenue per customer. Indeed, this growth has been driven by significant discounts as companies compete for market share. In the same statement, the CEO criticized the decision by British Airways to enter the discount industry.
Ryanair share price forecast
The daily chart shows that the Ryanair share price has been in a tight range in the past few months. The stock remains between the key support and resistance levels at 14.96p and 17.96p. As a result, the stock is trading at the same level as the 25-day and 50-day exponential moving averages.
Therefore, at this point, the outlook of the stock is neutral. The key levels to watch will be the support and resistance levels mentioned above. A move below 14.96p will signal that bears have prevailed while a move above 17.96p will be a good thing for bulls.