Ryanair reports bumper profits amid pent-up demand | Ryanair

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Ryanair posted record third-quarter profit as the low-cost carrier capitalized on pent-up travel demand from cost-conscious customers.

The budget airline increased its full-year earnings guidance after a strong performance, with profit after tax jumping to €211m (£185m) between October and December. That compares to a loss of 96 million euros during the same period in 2021 and more than double its profit of 88 million euros in the same three months of 2019, before the pandemic hit.

Ryanair said there was “strong demand for travel” over the October half-term holiday and the Christmas and New Year period.

The chief executive, Michael O’Leary, said there was “strong demand” for Easter and summer cruises driven by the return of Asian and American tourists who are encouraged to visit Europe due to the strength of the US dollar.

The carrier welcomed the performance, which was the first in recent years not affected by Covid restrictions or geopolitical events, including Russia’s invasion of Ukraine.

This is despite the cost of living crisis, which has put pressure on household finances and forced many consumers to cut back on non-essential spending. But Ryanair’s chief financial officer, Neil Sorahan, said customers are turning to low-cost airlines like Ryanair for a getaway.

“I think people want to get away from all this bad news,” he told BBC Radio 4’s Today programme. “They are eager to get some sun on their backs and book their numbers. In fairness, we have the lowest fare of any airline in Europe.”

Surhan said the company was able to keep its prices low thanks to the fact that it hedged the cost of fuel. Ryanair said about 80% of its forecast fuel consumption for 2023 has been hedged so far.

However, the airline is preparing for a loss in the fourth quarter, which covers the three months from January to March, due in part to the timing of the Easter holiday, which will fall again in April this year. This is despite strong bookings in recent weeks, as customers keen to get away lock in current prices for the summer break.

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Ryanair reiterated its full-year earnings guidance between €1.3 billion and €1.4 billion. Over the weekend, Ryanair began benefiting from the collapse of UK regional airline Flybe, which has left passengers stranded and hundreds of crew without jobs. Ryanair has set up a fast-track recruitment process and planned a recruitment drive for ex-Flybe employees at Birmingham Airport on 2 February.

Surhan said he expects more consolidation across European airlines over the coming years, as rival airlines come under pressure. “If you don’t have a strong balance sheet and you don’t have a low-cost base, like we have, it’s very difficult in this post-Covid environment to be a strong survivor,” Surhan said.

“I mean, we are almost unique in reporting profitability at this point in time. We are unique in the balance sheet that we have and I think you will see more consolidation across Europe, and potentially in the UK, over the coming years.”

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