Ryanair is flying high financially as customers count the cost

Passengers are paying 14 per cent more than in the comparable quarter pre-Covid, says James Moore

Ryanair has reported a hike in fares and profits amid strong demand for travel (PA Wire)

Ryanair is flying financially.

Say what you like about the group’s pugnacious, often downright obnoxious, chief executive Michael O’Leary. And I have. But he knows how to run an airline and how to make money from the business.

His competitors often struggle with that, if they even manage to stay in business.

Flybe has just suffered its second failure in three years, gifting a PR win to Ryanair, which came up with the offer of £29.99 “rescue fares” for stranded travellers and staff.

Hot on the heels of that mess comes another: Norwegian airline Flyr is on the critical list after a failed attempt to raise cash from shareholders and other potential investors.

Ryanair’s results aren’t just on a different planet to struggling regional airlines, they’re in a different galaxy. The company reported a record pre-tax profit of €223.1m (£196m) for the three months to the end of December against a loss this time last year.

It is also predicting a soaring summer based on early bookings.

With Covid restrictions gone and the pound weakened, O’Leary foresees a rush of US and Asian tourists. Europe’s economic woes don’t appear to be casting a pall on the rosy outlook either.

Perhaps it’s the daily diet of grim news at the moment, but there’s clearly a hankering to get away. So, while everyone’s finding things to cut back on, travel is not among them, at least for those with the financial capacity to travel.

They’re going to wince when they see their credit card bills. Low-cost airlines aren’t as low cost as they were. Ryanair reported fares are “strong across the board”. Passengers are paying 14 per cent more than they were in the comparable quarter pre-Covid.

With rivals struggling and demand strong, it has been easy for Ryanair to pump up prices.

“Over the past three years, numerous airlines went bankrupt and many legacy carriers significantly cut their fleets and passenger capacity, while racking up multibillion-euro state aid packages,” snarked Ryanair. “These structural capacity reductions have created enormous growth opportunities for Ryanair.”

Yet even with winter sun shining on his airline, O’Leary can’t resist tightening the screw on his workforce.

The airline, which has never knowingly underpaid its executives, has agreed to fully restore pay for over 95 per cent of its crews who took a Covid cut and who are covered by new long-term pay agreements signed in December. It trumpeted that this change is 28 months early.

Here’s what it had to say to the remainder: “We remain available to conclude agreements (on similar terms) with the tiny minority of unions representing less than 5 per cent of our crews who have so far failed to reach agreement on accelerated pay restoration.”

Was the last part of that statement really necessary? When workers do you a favour by accepting a financial punch to their guts, it’s standard practice to show a bit of tact even if you might think they’re being awkward. But Ryanair is incapable of doing that, instead choosing to demean the “tiny minority”.

This company’s success was built upon its emergence as a disruptor. It competes aggressively and has maintained strong financial discipline. Being needlessly mean to staff and customers has been a recurrent theme.

Customers will just have to put with it, and it seems they will pay more for the privilege.

Investors won’t worry unless industrial relations re-emerge as a serious issue – and maybe not even then. Shares have started to take off. They should fly higher still.