Ryanair turns around losses but warns air travel market remains ‘fragile’

Europe’s biggest budget airline says summer seats are more than 10 per cent higher than in 2019

In demand: Ryanair is filling 92 per cent of seats on its flights (Simon Calder)

Ryanair, which has so far avoided many of the problems experienced by other European airlines, has reported a modest profit for the three months between April and June.

Europe’s biggest budget airline made a profit of €170m (£145m) and filled 92 per cent of its seats.

In the corresponding quarter a year earlier, the loss was €273m with a load factor of 73 per cent.

But compared with the same spell in 2019, profits are 30 per cent down.

The airline said that average fares in April, May and June had fallen because of Russia’s invasion of Ukraine and consequent consumer uncertainty, but that “ancillaries” – from advance seat selection to baggage – were currently running at over €22.50 (£19.20) per passenger.

July, August and September fares are “a low double-digit percentage” above pre-pandemic levels – in other words more than 10 per cent higher than in summer 2019.

Michael O’Leary, chief executive of Ryanair, said that the decision to minimise job losses and keep crews active and “current” had been vindicated.

Many European airlines, airports, and handling companies are struggling to fill jobs that were cut during the pandemic.

“We are fully crewed, despite operating at 115 per cent of our pre-Covid capacity,” said Mr O’Leary.

“Our business, our schedules and our customers are being disrupted by unprecedented ATC [air-traffic control] and airport handling delays, but we remain confident that we can operate almost 100 per cent of our scheduled flights.”

British Airways and the UK's biggest budget airline, easyJet, have cancelled around 40,000 flights between them this summer – taking more than 7 million seats out of the market.

The Ryanair CEO was cautious about the future, saying: “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.

“The strength of any recovery will be hugely dependent upon there being no adverse or unexpected developments over the remainder of FY23 [the current financial year, which runs until the end of March 2023].

“Any guidance is subject to a very rapid change from unexpected events which are well beyond our control during what remains a very strong but still fragile recovery.”

Allegra Dawes, senior analyst at Third Bridge, said:“The golden age of cheap air travel is over thanks to decade-high oil prices and inflation. However, Ryanair’s fuel-hedging policy means they are better positioned to maintain price competitiveness and under less pressure to increase fares over the next 12 months.”