Ryanair swings back to profit amid recovery in travel demand

Low-cost airline Ryanair said in its full-year results on Monday that, despite a loss of €154m (£133.87m) in the fourth quarter, it still swung to a full-year profit after tax of €1.43bn, from the prior year's loss of €355m.

The company - Europe’s largest passenger carrier - put the positive performance down to a robust recovery in passenger traffic, improved fares, a competitive cost base, and favourable fuel hedges.

Its load factor reached 93% for the 12 months ended 31 March, from 82% in 2022, while Ryanair served a total of 168.6 million passengers during the fiscal year, up 74% from the previous year's 97.1 million customers.

Revenue soared 124% to €10.78bn, from €4.8bn in 2022, reflecting the strong recovery in demand.

Operating costs for Ryanair amounted to €9.2bn in 2023, representing a 75% rise from €5.27 billion in the prior year.

The airline swung to earnings per share of €1.16, from losses of 21 euro cents per share in the 2022 financial period.

Ryanair reported net cash of €0.56bn at the end of the period, compared to net debt of €1.45bn on 31 March last year.

“This year, Ryanair hopes to grow traffic to approximately 185 million, although Boeing's recent delivery delays may push some of this growth into the lower-yielding second half, and may reduce this target slightly,” said group chief executive officer Michael O’Leary.

“Our 2024 fuel bill will increase by over €1bn due to higher oil prices, despite our more fuel-efficient fleet.

“While we continue to enjoy a significant cost advantage over competitor airlines, we expect to record a modest increase in unit costs excluding fuel, as annualised crew pay restoration, higher crew ratios this summer and increased enroute charges will not be fully offset by ‘B737 Gamechanger’ deliveries in the first half.”

To date, O’Leary said summer 2023 demand was “robust”, with peak fares trending ahead of last year.

First quarter fares, which benefited from a strong Easter in April - and a weaker prior year comparable due to Russia's invasion of Ukraine last year - would be significantly higher than the first quarter of the 2023 financial year.

“Despite ongoing uncertainty over the timing of Boeing deliveries, almost 15% unhedged fuel, limited second-quarter visibility and zero second-half fare visibility - normal at this time of year - we are cautiously optimistic that 2024 revenue will grow sufficiently to cover our €1bn higher fuel bill and still deliver a modest year-on-year profit increase,” O’Leary added.

“This guidance remains heavily dependent upon avoiding adverse events during 2024 - such as the war in Ukraine or further, repeated, Boeing delivery delays.”

At 0833 BST, shares in Ryanair Holdings were up 1.6% in Dublin, at €15.89.

Reporting by Josh White for Sharecast.com.