Ryanair
Ryanair's results were once again strong, with revenues up 27% and profits up 23%. Amusingly enough, the results were driven by fuel surcharges imposed by legacy carriers like British Airways
I suppose the only blemish for the quarter would be the badly timed fuel hedging. Roughly 90% of the airline's needs for the rest of the year are being hedged at $73 a barrel, much higher than current prices.
I commented on the gambling website earlier this year. The airline is moving toward a future when it can offer 50% to 100% of its flights for free and make up the revenue from entertainment services -- whether it's online gambling or the mobile phone service it plans to launch next year, which will include -- you guessed it -- mobile gambling. CEO Michael O'Leary, ever the PR maven, seems to have neatly timed the gambling gambit to ensure maximum publicity while there's a furor in the U.S over the recent online gaming ban.
The hostile Aer Lingus merger seems to have stalled until European regulators can review the deal; that's expected by late December. But the merger seems to hinge on whether Aer Lingus employees -- who control the key voting block of shares -- go for the deal. Aer Lingus management has already rejected it, and so far, the employees have not committed either way. Still, Ryanair insists that it would keep its 19.2% stake even if the merger doesn't go through, and instead serve as a vocal minority shareholder. I hope the deal gets done, because it would benefit both the merging airlines and consumers over the long haul, enabling the combined company to better compete against carriers like Air France/KLM
Ryanair also is committed to creating shareholder value, announcing that it expects to return some of its $2.5 billion-plus cash hoard to shareholders by the end of the year. An airline, of all things, returning cash to shareholders instead of destroying it? That's rare. With the stock up nearly 56% over the past year, shareholders have had much to celebrate. With the company continuing to hit on all cylinders, investors would be Foolish to investigate these shares further.
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Fool contributor Stephen Ellis does not own shares in any companies mentioned. You can view the stocks he owns here , and his 99th percentile ranking here in Motley Fool CAPS , the Fool's new stock-rating community. The Motley Fool has a disclosure policy .