Ryanair reports soaring profits amid mixed demand

No-frills airline Ryanair has said prices during the peak summer season are set to be intact or just “modestly” higher than last year.

Profits Soar Despite Economic Concerns

Ryanair has reported a 34% increase in profits to €1.92 billion for the fiscal year ending in March, buoyed by a 21% rise in average fares. 

CEO Michael O’Leary attributed the airline’s strong performance to the steady recovery in air travel demand following the lifting of Covid-19 pandemic restrictions. 

However, he also noted that airfares have not increased as sharply as anticipated, which he linked to a “recessionary feel around Europe.”

Record Passenger Numbers and Strong Seasonal Traffic

The airline carried 183.7 million passengers over the year, with average fares reaching €49.80. Ryanair experienced record trading last summer and robust traffic during the Easter period in March. 

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Nevertheless, passenger numbers fell towards the end of last year after Ryanair flights were removed from several online travel agents. Despite this, bookings for the upcoming summer are ahead of last year’s figures, although fare prices for April, May, and June are lower than expected.

Summer Fare Expectations and Cautious Optimism

Looking ahead, O’Leary expressed cautious optimism that peak summer 2024 fares would be flat or modestly higher compared to summer 2023. 

“We still see reasonable strength in July and August bookings, the peak summer months, but April, May, and June are a little bit weaker than we had originally expected,” he said.

Challenges with Boeing Deliveries

Ryanair’s expansion plans have been hampered by delays in the delivery of new Boeing planes. 

The airline aims to carry 198-200 million passengers this year, contingent on the timely delivery of the new aircraft. However, it expects to be short of about 23 Boeing 737s by the end of July. 

O’Leary mentioned that Ryanair would receive modest compensation from Boeing for these delays, which would not fully cover the cost of scaling back growth plans.

Scrutiny on Boeing and Management Changes

The delays come amid increased scrutiny of Boeing’s manufacturing processes following a crisis in January when a panel on one of its aircraft blew out in mid-air. Boeing’s delivery schedules have slowed as a result. 

O’Leary welcomed recent management changes at Boeing and noted some improvement in delivery quality, but emphasized the need for accelerated delivery progress.

Uncertain Profit Forecasts

Ryanair did not provide profit forecasts for the current year, citing dependence on avoiding adverse events such as wars in Ukraine and the Middle East, significant air traffic control disruptions, or further Boeing delivery delays. 

The airline remains cautiously optimistic about maintaining strong performance amid these potential challenges.