In February, I cautioned against the purchase of Ryanair (NASDAQ:RYAAY) stock, even though I've been bullish on the company since 2018. Like all other airlines, Ryanair is going through a rough time, as the absolute majority of its fleet is grounded and it's unlikely that it will be able to fully resume its operations by the end of the year. Nevertheless, I do believe that all the downside is already fully priced in. While there's a risk that the stock will be slightly volatile from time to time, now is the right time to slowly accumulate the position in the company.
For years, I've been praising Ryanair for its efficiency and the ability to make a substantial amount of profit despite offering the cheapest tickets in comparison to its European peers. Thanks to such an advantage, Ryanair managed to increase its cash and cash equivalents to €3.8 Billion (~$4.11 Billion) in the previous fiscal year. This will help it to weather the current storm quite well. Moreover, once the lockdown restrictions will start to ease, Ryanair will be one of the few airlines to successfully resume its operation on a full scale in a short amount of time.
Weathering the Storm
The global pandemic has hit the airline industry the hardest. At the beginning of March, Europe became exposed to COVID-19 on a large scale, as Italy became the epicenter of the COVID-19 pandemic in the region. Ryanair, as the biggest airline on the continent, suffered the most. First, it was forced to close all of its routes to and from Northern Italy. However, as the virus accelerated its spread, the management had no choice but to ground the absolute majority of its fleet and wait for better times.
On April 3, the company reported that 99% of its fleet is
