Ryanair remains cautious about future despite record half-year
Ryanair has remained cautious about its future despite posting a record half-year performance.
Driven by an exceptional summer traffic, the low-cost carrier’s after tax earnings jumped to €1.37bn (£1.20bn) – up from a €48m net loss last year.
Even though slightly below analysts’ consensus, this was its highest half-year results ever, as it surpassed the record-making €1.29bn of 2017.
Passenger numbers went up 143 per cent to 95.1 million for the six months ended 30 September, while load factor increased by 15 percentage points.
“We’re going into the second half of the year to December and March operating at 110 per cent to pre-Covid capacity [while] all of our competitors are running at less than their pre-Covid capacity,” chief executive Michael O’Leary told analysts today.
Over the last few months, Ryanair capitalised on its ability to provide a more reliable service to passengers during this summer’s travel chaos, while expanding its network and maintaining lower fares.
“If that continues, I think we could have a very strong winter,” O’Leary said, while adding that Christmas continued to look strong in both passenger volumes and average fare level.
Nevertheless, the carrier remained cautious about future profitability as it was expecting its winter season to be loss-making, in the range of between €100m and €200m.
“If we get through the winter with a reasonably strong pricing performance and we have no disruptions from Covid or Ukraine, then I hope we will be at the lower end of that €200m loss in the second half of the year,” the chief executive explained.
Despite the current socio-economic environment, Ryanair increased its passenger forecasts for the year ending March to 168 million travellers, as it now expects to deliver a profit after tax of between €1bn and €1.2bn.
“This cautious guidance will remain hugely dependent on not suffering adverse events this winter (as we did last, which were clearly beyond our control),” Ryanair said in a statement earlier today.
Last year, the Omicron variant as well as Russia’s invasion of Ukraine severely slowed down Ryanair’s post-Covid recovery.
Commenting on the results, interactive investor’s head of investment Victoria Scholar said that, even though winter remains a struggle, “Ryanair remains optimistic about next year both in terms of profitability and passenger numbers.”