Ryanair Holdings today reported a record half-year after tax profit of €1.37 billion, compared to an equivalent pre-Covid level of €1.15 billion.
Europe’s largest no-frills airline group cited strong summer traffic, operational reliability and “robust” peak season fares, up 14% on pre-pandemic pricing.
Overall carryings rose by 143% to 95.1 million in the six months to September 30 with the load factor up by 15 percentage points to 94%.
Chief executive Michael O’Leary said: “Concerns about the impact of recession and rising consumer price inflation on Ryanair’s business model have been greatly exaggerated in recent months.
“As the lowest cost producer in Europe, we expect to grow strongly in a recession as consumers won’t stop flying, but rather they will become more price sensitive.
“Like Aldi, Lidl, Ikea and other price leaders our very strong post-Covid recovery shows that price will continue to drive market share gains as we add low cost, more fuel efficient, aircraft to our fleet over the next four years.
“As Europe recovers from the two-year Covid pandemic there has been a considerable contraction of short haul capacity, much of which will not return in the medium term.
“Most of our EU competitors have cut capacity by up to 20% this winter while Ryanair will offer 10% more seats than pre-Covid.”
He added: “Consumer propensity to travel remains high in Europe as a result of full employment, rising wages and two years of pent-up-demand and accumulated savings while people were ‘locked up’ during Covid.
“We expect these strong fundamentals will continue to underpin robust traffic and average fare growth for the next 18-months at least, and Ryanair will be the main beneficiary of these trends so long as there are no negative developments this winter such as Covid variants or Ukraine.”
He admitted that recovery for the remainder of financial year remains fragile, however, forward bookings were strong over the October school half-term and into the peak Christmas travel period.
“We hope to avoid any repeat of last year’s Omicron lockdowns which damaged last Christmas at such short notice,” O’Leary said.
“As is normal, at this time of year, we have almost zero visibility into Q4 which is traditionally our weakest quarter and which this year doesn’t have any Easter benefit.
“While we remain dependent on Boeing meeting their delivery commitments, especially for Christmas extras and spring mid-term, we are modestly raising our full year traffic guidance to 168 million passengers – previously 166.5 million – up 13% on our pre-Covid traffic.
“We remain hopeful that full-year fares will remain ahead of pre-Covid by a mid-to-high single digit percentage but we remain cautious that yields could be impacted at very short notice in H2 as they were last year by Omicron in late November which damaged Christmas and the Ukraine invasion on February 24 which so clearly damaged March and April traffic.
“If we are fortunate to avoid such negative events like Covid and Ukraine in H2 then, thanks to our very strong traffic recovery, our advantageous fuel and currency hedges and our widening cost and market share leadership over competitors, we are hopeful that we will minimise our winter losses which would enable us to deliver a full year profit after tax PAT in a range of €1 billion to €1.2 billion.
“This cautious guidance will remain hugely dependent on not suffering adverse events this winter as we did last, which were clearly beyond our control.”