Ryanair has reported steady demand across its European routes and anticipates a recovery in fares this year, following a dip in profits linked to softer demand and booking issues.
Shares in the airline rose on the Dublin stock exchange today, buoyed by optimism around the summer travel season.
For the year ending 31 March, Ryanair recorded a 16% drop in annual profit, posting €1.61 billion in after-tax earnings. This was in line with analyst expectations. Despite the fall in profit, revenue rose by 4% to €13.95 billion, compared to €13.44 billion the previous year.
The airline, which flies to 37 countries, said average fares declined by 7% over the year. This was attributed in part to disputes with online travel agencies. However, Ryanair’s Chief Financial Officer, Neil Sorahan, said there are signs of recovery.
Looking ahead, the airline forecasts fare increases of between 15% and 19% for the April to June quarter, supported by the timing of Easter and early summer bookings. Ryanair’s Group CEO, Michael O’Leary, noted that bookings are currently running about 1% ahead of last year’s levels.
Ryanair carried a record-breaking 200 million passengers over the 12-month period – a first for any European airline. Although originally targeting 205 million passengers, the airline had to revise this due to delivery delays from aircraft manufacturer Boeing. Ryanair now expects to reach 206 million passengers in the next financial year.
Mr Sorahan confirmed the airline remains optimistic about future deliveries and pricing arrangements, despite potential political and trade developments.
“If tariffs are introduced by the EU, we expect Boeing and our suppliers to honour the fixed pricing we’ve agreed…If those terms change, we’ll review our options – including delays or alternative suppliers.”
Ryanair’s share price closed at €22.41 last Friday, up significantly from a 12-month low of €13.41 last July, which followed a notable drop in average fares. CEO Michael O’Leary could also be in line for a substantial performance bonus if the share price remains above €21 for 28 consecutive trading days – a threshold passed earlier this month.
On another note, Mr O’Leary expressed frustration over ongoing disruptions at Tel Aviv’s Ben Gurion Airport. Flights to and from Israel have been suspended until early June.
“We’re beginning to lose patience,” he said. “If security-related disruptions continue, we’ll have to consider redeploying those aircraft to other routes in Europe.”
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