Ryanair swings to profit but outlook uncertain in ‘fragile’ market

Ryanair has swung to a first-quarter profit despite airport disruption and a hit from the Ukraine war, but warned that the full-year outlook is unpredictable in a “fragile” market.

The Irish airline reported profits after tax of 170 million euros (£145 million) for the three months to June 30 against net losses of 273 million euros (£233 million) a year ago as passenger numbers rebounded to 45.5 million – 9% ahead of pre-Covid levels.

But profits were still “well below” levels seen in the same quarter before the pandemic in spite of the bounceback, according to the group.

It said the Ukraine conflict “badly damaged” Easter bookings and fares, which fell 4% against the same quarter pre-Covid, although average fares for the summer are higher on a three-year basis by a “low double-digit percentage”.

The group also said it is being hampered by “unprecedented” air traffic control and airport handling disruption, but hopes to run “almost 100%” of its scheduled flights and minimise delays.

Ryanair also warned that rocketing oil prices are set to push up its full-year fuel bill, affecting the 20% of its fuel costs that have not been secured in advance.

But it said it is “too soon” to give any guidance on full-year profits, given the uncertain market and with passengers continuing to book at the last minute.

Chief executive Michael O’Leary said: “Our business, our schedules and our customers are being disrupted by unprecedented air traffic control and airport handling delays, but we remain confident that we can operate almost 100% of our scheduled flights, while minimising delays and disruptions for our guests and their families.”

He added: “While we remain hopeful that the high rate of vaccinations in Europe will allow the airline and tourism industry to fully recover and finally put Covid behind us, we cannot ignore the risk of new Covid variants in autumn 2022.

“Our experience with Omicron last November, and the Ukraine invasion in February, shows how fragile the air travel market remains, and the strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of 2022-23.”

Like its rivals, the group has been battling against the threat of strike action from staff over pay after it cut salaries during the pandemic, but said it has agreed deals with unions representing more than 80% of its pilots and around 70% of cabin crews.

“We hope to conclude agreements with the small remaining balance in the near future,” Ryanair added.