Ryanair reports record summer profit, sees 'very strong' recovery

RYANAIR on Monday (Nov 7) posted its largest after-tax profit for the first half of its financial year, which includes the key summer months, and expects to return to pre-Covid annual profit levels of at least 1 billion euros (S$1.4 billion) this year.

The airline earned 1.371 billion euros in the six months to the end of September. While just short of a forecast of 1.385 billion in a company poll of analysts, it was well ahead of its previous first-half record of 1.29 billion euros in the six months to end-September 2017.

Chief executive Michael O’Leary said the recovery in traffic and profitability is likely to continue to be “very strong” for at least the next three years, allowing the Irish airline, already Europe’s largest by passenger numbers, to make major market share gains.

While the winter will be loss-making, Ryanair expects an after-tax profit of between 1 billion and 1.2 billion euros for the year to Mar 31, though that forecast remains “hugely dependent” on there being no adverse shocks.

“Concerns about the impact of recession and rising consumer price inflation on Ryanair’s business model have been greatly exaggerated in recent months,” he said.

“We expect these strong fundamentals will continue to underpin robust traffic and average fare growth for the next 18 months at least,” he said. In a pre-recorded video presentation, he predicted very strong growth in profit and traffic over the next three years, assuming oil prices remain relatively stable.

Referring to the second-quarter numbers, O’Leary said the combination of 15 per cent traffic growth and a 14 per cent fare rise was something he had never seen in all his years in the industry.

Bookings in November and December remain strong, but the airline said it had very little visibility for the first three months of 2023.

Several rivals have provided relatively upbeat guidance in recent weeks, with Wizz Air, British Airways-owner IAG and Lufthansa all saying they were seeing continued strength in ticket sales despite inflation fears.

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Ryanair, which unlike many airlines kept its pilots and crew up-to-date with their flying hours during the pandemic to take advantage of the swift rebound, flew a record 95 million passengers in the six months to the end of September.

It increased its passenger forecast for its financial year to 168 million from 166.5 million, significantly ahead of its previous annual record of 149 million, which it reached before the pandemic brought the travel industry to a standstill.

However, O’Leary warned that Boeing may deliver only 40 to 45 of a promised 51 737 MAX aircraft in time for next summer.

Chief financial officer Neil Sorahan said he hoped that passenger numbers would rise to 185 million next year. REUTERS