Ryanair is profiting from the European travel boom

Ryanair said it had returned to profit in the year to March 31, slightly beating market expectations, and expects further improvement next year.

The Dublin-based low-cost airline made pre-tax profit of €1.44 billion on revenue of €10.8 billion, compared with a loss of €430 million and revenue of €4.8 billion in the year to March 2022. Profit after tax but before exceptions, the company’s preferred measure, was 1.43 billion euros, compared to a loss of 355 million euros a year earlier. Analysts expected data between 1.32 and 1.42 billion euros.

The figures are the latest evidence of a recovery in the European aviation industry and Ryanair’s particularly strong post-Covid recovery. In the financial year, it carried 169 million passengers, compared to 97 million a year earlier. The figure for the year up to March 2023 was 13 percent higher than the figure for the year up to March 2020, before the outbreak of the Covid epidemic.

Ryanair’s utilization – the percentage of seats filled on its flights – rose to 93 percent, compared to 82 percent for the year until March 2022.

Chief financial officer Neil Sorahan said the company was “bouncing back” in turnover after a “difficult” quarter from April to June last year, following Russia’s invasion of Ukraine.

“We’ve seen traffic increase significantly in the remaining quarters,” he said.

Costs – at €31 per passenger excluding fuel – have fallen to pre-Covid levels, but fares have been higher due to strong demand and tight capacity in the sector.

“Fares are about 10 percent above pre-Covid levels,” Sorahan said.

Ryanair has forecast further growth in passenger numbers and profits for the year to March 2024, saying it will carry 185m passengers for the year. However, it also said higher market prices would increase the company’s annual fuel bill by more than 1 billion euros, despite deliveries of the more fuel-efficient 737 Max jets.

“We don’t have significant visibility right now, but [the April-to-June quarter] it will be very strong given last year’s weak comparison and the invasion of Ukraine,” Sorahan said.

Summer bookings are “strong” and fares have exceeded summer 2022 levels, he added.

The airline said there was “ongoing uncertainty” about a number of factors, including the timing of Boeing’s new aircraft deliveries, unhedged fuel price exposure and future demand.

But Sorahan said the company was likely to post higher profits in the year to March 2024.

“While we don’t have an outlook for the second half, which is normal for this time of year, we would be cautiously optimistic,” Sorahan said.