Ryanair investor cuts its holding

Ryanair’s third-largest shareholder Blackrock Inc reduced its holding in the carrier to below 5% just before the news that the airline had signed a deal to secure 175 new aircraft.

A spokesperson for Blackrock refused to comment on why the American multinational investment firm had chosen to reduce its shareholding on the eve of the announcement of the huge Boeing purchase.

Blackrock alerted the stock market that it had reduced its shareholding from 5.2% reported in Ryanair’s annual report to below 5%.

The largest shareholder in Ryanair is Capital Research and Management Company which owns 16.6%. Micheal O’Leary is the largest personal shareholder with 3.5% of the company.

Davy analyst Stephen Furlong said in a briefing note that the share price could go from its current price of €6.24 to €7.

“Ryanair’s order of 175 aircraft allows for renewed, controlled growth at 3%-5% per annum, facilitating an increase in EU market share from c.15% to c.20%. Given that Ryanair’s cost base (ex-fuel) is c.50% below that of its competitors, this should provide ample growth opportunity across Europe,” Mr Furlong wrote.

The increased capacity that Ryanair has as a result of the acquisition of the aircraft should allow the company to capitalise on gaps in the short-haul market in Europe, according to Davy.

“A look at the short- haul delivery schedules across Europe shows that Ryanair is very well placed to enhance its leading position as it rolls out its high-margin business model. We see returns expanding from the mid- to high-teens over the coming years,” said Mr Furlong.

Not everyone was pleased with Ryanair yesterday with the Netherlands Consumer Authority hitting the airline with a €370,000 fine.

The consumer watchdog said Ryanair had hidden costs on its website and didn’t allow customers to correct mistakes before finalising a booking. The body also said that Ryanair didn’t provide contact information in Dutch.

Ryanair is challenging the fine and said the report was littered with errors.

The airline is holding a press briefing in Shannon today where it is expected that the low-cost carrier will announce a number of new routes out of Shannon Airport.