Ryanair sees flat to modestly higher summer fares after record annual profit

RYANAIR on Monday (May 20) posted a 34 per cent year-on-year increase in annual profit to a record 1.92 billion euros (S$2.8 billion), and expressed “cautious optimism” that peak summer fares would be flat to modestly ahead of last year.

The result was slightly ahead of the 1.905 billion euros profit expected in a company poll of analysts. Ryanair cut its after-tax profit forecast to a range of 1.85 billion and 1.95 billion euros in January after some online travel agents suddenly stopped selling its flights.

The Irish airline, Europe’s largest by passenger numbers, also said it would be 23 jets short of the number Boeing was due to deliver by the end of July and there remained a risk – although “unlikely” – that deliveries could slip further.

Chief financial officer Neil Sorahan told Reuters the new Boeing production team in Seattle were delivering planes with “a bit more consistency” and if things went well it could receive two or three more jets by the end of July.

Ryanair CEO Michael O’Leary warned two weeks ago that summer airfares would likely be lower than the 5 to 10 per cent rise it expected as recently as late April. The airline said on Monday its weaker forecast was “heavily dependent” on last-minute summer bookings.

The low-cost carrier flew a record 184 million passengers in the financial year that ended Mar 31 and reiterated it hoped to grow traffic to 198 to 200 million passengers this fiscal year, having already cut that from 205 million in March due to the aircraft delivery delays.

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It also announced a 700 million euro share buyback that it said it would formally launch later this week. REUTERS