Ryanair on track for ‘strong’ summer after reporting record profit

Ryanair chief executive Michael O’Leary has forecast that a rush of US and Asian tourists will boost demand in Europe this summer, after the low-cost airline reported record profitability despite the economic downturn.

O’Leary said early bookings showed that Europe’s largest airline was on track for a “strong” summer, following its most profitable December quarter on record.

He added that the relative strength of the US dollar and the end of most border restrictions had encouraged long-haul travellers to make bookings to travel to Europe once more.

“With Asian tourists now returning and a strong US dollar encouraging Americans to explore Europe, we’re seeing robust demand for Easter and summer 2023 flights,” he said.

The bullish outlook comes as several European airlines have reported strong ticket sales, with few signs that the economic slowdown in Europe is hitting demand.

Chief financial officer Neil Sorahan said there had been no signs of economic worries hitting ticket sales. “If you look back to the global financial crisis it was evident that whatever people save money on, travel was not one of those things,” he said.

Ryanair on Monday reported profit after tax of €211mn for the three months to the end of December, against a loss of €96mn a year previously, when border restrictions were still stifling travel.

The results were a record, and came after particularly strong demand over the October half-term and peak Christmas and new year holiday season, Ryanair said.

The carrier said fares were strong “across the board”, and passengers paid fares 14 per cent higher than in the comparable quarter three years ago, before Covid-19 struck.

Ryanair’s record results came just 48 hours after smaller UK airline Flybe collapsed into administration for the second time in three years, leaving thousands of passengers stranded.

Ryanair and its rivals have said the failure or retrenchment of weaker players has opened up significant opportunities for other airlines as they emerge from the pandemic.

Europe’s leading low-cost airlines base their businesses on attracting passengers through comparatively cheap fares by keeping their own costs low and filling their planes.

Ryanair said on Monday it had driven down its unit costs in the fourth quarter to €30 per passenger excluding fuel, and that its planes were 93 per cent full over the period.

“There have never been more opportunities than we are seeing at the moment, not only in the UK but all across Europe,” Sorahan said.

Ryanair reiterated its forecast of a profit after tax of between €1.325bn and €1.425bn for its financial year ending in March, but said it expected the final quarter to be lossmaking because Easter falls outside the period.

The airline said it expected 168mn passengers to fly in the 12 months to the end of March, which would be another record, and for this to rise to 185mn over the following financial year.