Ryanair Comes Close to Breaking Profit Record

Ryanair, the Irish carrier, is on the brink of reaching profit levels not seen since 2018. Despite facing challenges from Boeing delivery delays and fluctuating passenger numbers, the airline remains cautiously optimistic about the year ahead.

In the fiscal year ending on March 31, Ryanair achieved nearly record-breaking full-year profits and expects a modest increase in the next 12 months, thanks to strong summer demand. Despite facing less favorable fuel hedging, the airline anticipates a 10% growth in traffic this year, which will offset a $1.1 billion increase in oil costs.

Ryanair predicts higher earnings from peak summer fares, with European short-haul capacity projected to be 5-10% below pre-pandemic levels. This positive outlook aligns with other major European airlines, including low-cost rival EasyJet, which have reported robust summer bookings despite economic pressures caused by inflation.

“There is no doubt in my mind that people who have been locked up for the two years of Covid are going back traveling. They see travel not as a luxury but as an essential and families are returning to the beaches of Europe this summer,” Chief Executive Michael O’Leary said in a presentation to investors.

Ryanair’s shares have surged by 27% this year and showed a 1.4% increase in early trading.

While Ryanair’s CEO, Michael O’Leary, remains cautious about the future, he believes that a backlog of aircraft deliveries will limit European capacity growth for the next four years. This situation presents significant growth opportunities for Ryanair, as the airline plans to add 110 new Boeing jets over the next three summers.

However, Boeing’s delivery delays may impact growth projections, potentially shifting some anticipated growth to the latter half of this year. Ryanair expects to experience a shortage of up to 10 new jets in June and July, requiring careful management of capacity.

According to finance chief Neil Sorahan, Ryanair is confident in increasing passenger numbers from a record 168.6 million to 185 million. Nevertheless, the delivery delays could result in a potential reduction of 750,000 passengers in the first half of the year.

O’Leary anticipates that all required aircraft for summer 2024 will arrive by the end of May 2024, ensuring smooth operations next summer.

Ryanair’s recent multibillion-dollar deal with Boeing, securing up to 300 new jets, paves the way for projected growth of 300 million passengers per year by March 2034.

Surpassing analyst expectations and its own forecast, Ryanair’s full-year post-tax profit reached $1.57 billion. This remarkable turnaround comes close to rivaling its previous record profit of $1.59 billion in the year ending on March 31, 2018.