Budget airline Ryanair has swung back into profit over the past year due to strong traffic recovery, higher air fares, and advantageous fuel hedges, despite recording a fourth quarter loss of €154 million, its annual results show.
The airline, which published its results on Monday, made a full-year profit of €1.43 billion in the year up to March 31st, 2023, compared to a loss of €355 million the year before.
It saw its revenue more than double to €10.78 billion from €4.8 billion the year before. Operating costs also increased, however, from €5.27 billion to €9.2 billion.
Ryanair noted that it endured a “disappointing” first quarter when traffic was “badly impacted” by Russia’s invasion of Ukraine.
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However, strong travel demand through the remainder of the year saw traffic rise 74 per cent, with fares up 10 per cent on pre-Covid levels.
Ancillary sales delivered a “solid performance”, generating just under €23 per passenger and a total of €3.84 billion.
Its fuel hedging “contributed significantly” to the final profit outcome, saving the group over €1.4 billion.
Ryanair hopes to grow traffic about 10 per cent to about 185 million passengers in the coming year, although it said Boeing’s recent delivery delays may reduce this target slightly.
Speaking after the publication of the results, Ryanair chief financial officer Neil Sorahan said the airline hoped to have the remainder of the delayed Boeing 737 8200 Max jets delivered by early August.
“We had one on Friday and we have another one coming today,” he said. “We’ll have a third before the end of this week. So they are coming in, but they’re coming in slower obviously than we would have liked.
“At this stage, I think we will be about 10 aircraft shy of what we hoped we would have for May, June, and into July. But by the end of July or early August, we would hope Boeing would have recovered back to where they were meant to be.”
On growth plans, Mr Sorahan said Ryanair would support plans for a third terminal at Dublin Airport, but that it was not necessarily required if the airport’s operator DAA were to construct more gates.
“We would support a third terminal to the extent it would be owned and managed by an independent party so there is competition brought in,” he said. “It’s not necessarily needed because we would get there with the extra gates and the second runway.
“They could very simply put more gates in where some of the hangars are at the moment without huge capital expenditure.”
The airline’s market share has grown significantly in most EU markets as it operated 116 per cent of its pre-Covid capacity in the year.
Most notable gains were recorded in Italy (from 27 per cent to 40 per cent), Poland (26 per cent to 36 per cent) and Ireland (49 per cent to 58 per cent).
Its European short-haul capacity remains below pre-Covid levels this summer, but it added demand is “notably robust”. Forward bookings and air fares this summer were described as “strong”.
The airline had €4.7 billion in cash on its balance sheet at year-end, despite an €850 million bond repayment in March 2023.
Its capital expenditure totalled €1.9 billion, which was €450 million lower than expected due to Boeing delivery delays.
In terms of outlook, the airline’s fuel bill will increase by over €1 billion due to higher oil prices.
“We are cautiously optimistic that full year 2024 revenue will grow sufficiently to cover our €1 billion higher fuel bill and still deliver a modest year-on-year profit increase,” the airline said.
“This guidance remains heavily dependent upon avoiding adverse events during the year such as the war in Ukraine or further, repeated, Boeing delivery delays.”
