Irish airline Ryanair has returned to profit. Driven by “the strong recovery in traffic” but also by rising prices as pengers continue to travel despite inflation, the low-cost carrier posted on Monday a net profit of 1.4 billion euros for its 2022/23 financial year, against a loss of 355 million a year earlier, despite operating costs up 75%.
“We have seen a very strong recovery in post-Covid traffic”, and this “is now 13 to 14% higher than our pre-Covid volumes, but profitability is still slightly lower”, summed up the boss. of Ryanair, Michael O’Leary. “People had been locked up for two years” during the confinements decided within the framework of the Covid-19 pandemic, “and they wanted to start traveling again”, he added.
During the period, Ryanair saw its turnover more than double, to 10.8 billion euros, and its traffic increase by 74%, to nearly 170 million pengers. Its prices have increased by 10% compared to pre-Covid levels.
“Ryanair’s market share has increased significantly” in Europe
“The demand for leisure travel this summer in Europe appears robust” and “despite inflation weighing on consumer spending, European consumers continue to favor travel over other forms of entertainment,” said Olly Anibaba, Third Bridge analyst. “Ryanair and other airlines have warned that the era of ultra-low fares may be coming to an end. They prepare customers for possible price increases,” the analyst continues.
Ryanair had returned to profit for its first three quarters, but the company said it remained in the red for the fourth quarter alone, with a loss of 154 million euros. The company has repeatedly highlighted the fact that it has laid off fewer workers than its competitors during the pandemic, which grounded air traffic for months – it had instead negotiated pay cuts with unions. Salaries “have been restored 28 months in advance (…) for almost all the crews”, Ryanair said on Monday.
Its competitor Easyjet, penalized last year by staff shortages, has still not managed to get back into the green.
“Ryanair’s market share has increased considerably in most EU markets”, particularly in Italy, Poland or Ireland, argued Michael O’Leary on Monday.
The company aims for 185 million pengers
The company intends to implement this summer the largest flight program in its history, with more than 3,000 daily trips, and hopes to increase the number of its pengers by 10% this year, to 185 million. “The real test for Ryanair will be off-peak periods, especially in winter. To fill their planes, (the company) may have to offer discounts” at this time of year, according to Olly Anibaba, of Third Bridge.
Ryanair, which foresees “a modest increase in profits” this year, also notes that its result could suffer from a “modest increase” in its costs, due in particular to a fuel bill which will rise by more than one billion euros. euros, and “recent delivery delays from Boeing”.
The company, which hopes to carry up to 300 million pengers a year by 2034, however, placed a large firm order for 150 737 MAX medium-haul aircraft in early May, Boeing’s flagship aircraft, and optioned 150 additional aircraft. The order is valued at 40 billion dollars at list price but Ryanair obtained a “competitive discount”, said Michael O’Leary.