This budget airline is making record profits
Ryanair expects it will be able to charge higher prices for flights over Easter and the summer, thanks to strong demand from American and Asian tourists and less competition from rivals.
The low-cost European carrier told customers in an earnings statement on Monday to “book early” before cheaper tickets sell out. It reported record profit for the three months to December 31, after increasing airfares by 14% compared to their pre-pandemic level.
“The return of Asian traffic to Europe and a particularly strong transatlantic marketplace driven by a very strong dollar will see robust demand both through the Easter and into the summer of 2023 for short-haul flights across Europe,” CEO Michael O’Leary said in a video posted to the company’s website.
The collapse of rival airlines during the pandemic and cuts by competitors to fleets and passenger capacity would also underpin Ryanair’s strong traffic numbers “hopefully at higher fares,” O’Leary said.
The Dublin-based airline has emerged from the coronavirus pandemic in a strong position, even as several of its competitors went bankrupt or needed government-backed bailouts. The latest casualty was small UK regional carrier Flybe, which filed for bankruptcy and ceased trading over the weekend.
Ryanair has also managed to avoid the staff shortages that have plagued rivals, leaving it well positioned to take advantage of a swift recovery in air travel following the pandemic.
“We’re seeing very strong market share gains in most of our major markets like Italy, Poland, Ireland and Spain where competitors have removed significant capacity or are retreating from competition with us,” O’Leary said.
Passenger numbers for the quarter through December climbed to a record 38.4 million. That’s 7% higher than the same quarter in 2019 before the pandemic hit. Fares for the quarter were higher than in 2019 “because of a very strong Christmas and New Year period,” according to O’Leary.
The airline posted its highest ever third-quarter profit, earning €211 million ($230 million) for the three months through December compared to a loss of €96 million ($105 million) for the same period in 2021.
That beat its previous record in 2017 of €106 million ($115.5 million), according to Reuters, and was more than double the result for the comparable quarter in 2019.
The Irish airline expects to carry 168 million passengers in the 12 months through March 2023, 13% higher than the year before the coronavirus, which was its previous record. It expects that number to grow to 185 million passengers over the 12 months to March 2024.
The airline said its growth forecast was based on the delivery of 124 “Gamechanger” Boeing 737 aircraft for the summer peak, but warned that some of those deliveries could “slip.”
Ryanair has in the past been openly critical of Boeing’s “inability to meet its delivery schedule.”
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