Ryanair, a major airline company, has updated its profit projection for the current fiscal year, which will end in March. This revision was made due to the unexpected actions of specific online travel agents who stopped selling Ryanair flights in December. As a result, the airline had to decrease its fares to retain seat occupancy levels while per-passenger costs rose slightly.
Previously, Ryanair had long contested these online agents for allegedly imposing unjustified extra fees and had even pursued legal action against them. However, the abrupt cessation of ticket sales caught Ryanair off guard.
Ryanair, which is the largest airline in Europe in terms of passenger numbers, is facing a major challenge. Despite this, the company remains optimistic about its financial outlook for the fiscal year. Ryanair expects to earn an after-tax profit between €1.85 billion and €1.95 billion, which is lower than its initial forecast of €1.85 billion to €2.05 billion issued in November. However, this adjusted projection is still higher than the airline’s previous record profit of €1.45 billion achieved in 2018.
During the holiday season, online travel agents stopped selling Ryanair tickets. To compensate for the loss, Ryanair launched a promotion offering fares lower than originally planned. This resulted in an increase of around 1 percentage point in the number of empty seats on their flights.
Ryanair faced numerous challenges, yet managed to report €15 million in profits for the third quarter of its financial year, which ended in December. However, this amount was significantly lower than the €49 million that analysts had predicted, and also marked a decline from the previous year’s profit of €211 million.
Throughout this period, Ryanair experienced a 7% increase in passenger traffic, totalling 41.4 million passengers, with average fares rising by 13% compared to the previous year.
Additionally, Ryanair noted a 10% increase in ancillary revenue during the third quarter, amounting to €0.95 billion or approximately €23 per passenger. However, operating costs surged by 26%, reaching €2.7 billion, primarily due to a 35% spike in fuel expenses, along with higher staff costs and accelerated maintenance schedules.
Looking ahead, Ryanair’s Group Chief Executive, Michael O’Leary, expressed cautious optimism about the upcoming summer season, anticipating higher ticket prices due to constrained short-haul capacity across Europe. O’Leary remains committed to the company’s ambitious goal of carrying 300 million passengers by 2034, with plans to potentially expand its fleet with additional Boeing 737 MAX 10 aircraft.
Speaking of the Boeing 737 MAX 10, Ryanair has affirmed its commitment to the model despite recent concerns raised by other airlines. Ryanair has already secured 150 firm orders for the MAX 10, with options for 150 more, and remains eager to expand its fleet with these aircraft to accommodate future growth.
In light of recent events, Ryanair’s Chief Financial Officer, Neil Sorahan, emphasized the company’s confidence in the Boeing 737 MAX series while acknowledging the potential for adjustments to its fleet composition.
Ryanair continues to monitor developments in the aviation industry and remains steadfast in its pursuit of growth and operational excellence.
