Ryanair’s yearly profit surges due to increased demand and higher fares.
The Irish low-cost airline Ryanair reported a 33% increase in group net profit to 1.92 billion euros for its financial year. This growth was driven by heightened demand and higher fares, which managed to counterbalance rising fuel costs.
The Dublin-headquartered airline noted a nine percent increase in demand, reaching nearly 184 million passengers. Revenue also saw a significant rise, climbing 25% to 13.4 billion euros.
Ryanair anticipates the possibility of flying up to 200 million passengers in its current fiscal year, reflecting the robust recovery of the aviation industry post-Covid lockdowns. However, CEO Michael O’Leary emphasized that achieving this target would hinge heavily on avoiding adverse events. He expressed concerns about potential disruptions due to conflicts in Ukraine and Gaza, as well as extensive air traffic control issues or further delays in Boeing deliveries.
O’Leary, known for his candid remarks, has been openly critical of Boeing for safety-related delays in delivering new aircraft, including those to Ryanair. Earlier this year, a door blew out of a Boeing 737 MAX 9 during an Alaska Airlines flight, resulting in minor injuries.
Additionally, O’Leary announced plans for Ryanair to repurchase shares worth 700 million euros and emphasized the operation of its largest-ever summer schedule.
The CEO indicated a potential reduction in airfares during the current first quarter, leading up to the peak summer season, aimed at attracting more passengers.
“Consumers have been setting aside budgets to fulfill their travel desires, but many are now hesitating due to rising prices,” remarked Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Despite soaring airfares attributed to inflation, airlines have seen benefits from the resurgence in global travel post-Covid.
Carriers have been striving to recover from substantial losses incurred during the pandemic-induced grounding of planes worldwide. Moreover, they’ve faced the challenge of higher wage costs amid unprecedented global inflation, which has also driven up the price of jet fuel.
With demand rebounding, the aviation sector has launched a significant recruitment campaign after slashing thousands of jobs during the pandemic, when travel restrictions kept people grounded.
Despite Monday’s impressive financial results, Ryanair’s share price plummeted nearly three percent to 17.80 euros in late afternoon trading in Dublin.
“The anticipation of potential ticket price reductions has dampened investor sentiment,” observed Danni Hewson, Head of Financial Analysis at AJ Bell.
She added, “Even as inflation decreases and consumers may start feeling a bit more financially secure, they are maintaining a cautious approach, which could impact seat occupancy levels once the summer rush subsides.”
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