Ryanair gets timely ratings boost from S&P

Ryanair has received a significant boost ahead of its attempts to tap the capital markets to help finance its planned fleet expansion, by receiving a BBB+ credit rating from Standard & Poor’s; making the Dublin-based carrier the highest rated airline in the world.

The rating, Ryanair’s management said, will ultimately have a positive knock-on effect for passengers, as it will enable the airline to maintain its low cost/low fare model.

“The successful achievement of this BBB+ rating is part of our plan to access the capital markets to finance the purchase of our 175 Boeing 737-800 order, via both secured and unsecured debt offerings. The rating will enable us to achieve lower cost financing to ensure that we continue to have the lowest costs and the lowest fares in Europe,” Ryanair’s chief financial officer and deputy chief executive, Howard Millar, said.

Management added the successful rating reflects the strength of Ryanair’s business model and its track record of high profit levels, superior cash generation, strong balance sheet and low levels of leverage.

Ryanair also announced, yesterday, the completion of its €70m systematic share buyback programme, which was initially announced just prior to Christmas. It brings to €484m the total amount of money the company has spent — during its current financial year — on repurchasing its own shares.

Ryanair announced its Boeing deal — worth over $15bn — 12 months ago, with the 175 vessels due for delivery in 2018. The deal will boost Ryanair’s fleet to more than 400 planes and help it hit its targets of 110 million passengers per year.

Meanwhile, at yesterday’s announcement of Ryanair’s winter schedule from Dublin airport, the airline’s marketing manager, Kenny Jacobs, said talks regarding the airline’s desired expansion into Russia (with routes planned for Moscow and St Petersburg) are progressing and the country’s current conflict with Ukraine is unlikely to hamper them.

Also speaking yesterday, Tourism Minister Leo Varadkar congratulated Ryanair on its growth plans out of Ireland and said increased passenger numbers at Irish airports this year would be driven by the airline.