Ryanair eyes return to pre-COVID profit but recovery ‘fragile’

Ryanair plane Boeing 737-8AS lands at Riga Worldwide Airport, Latvia July 21, 2022. REUTERS/Ints Kalnins

DUBLIN, July 25 (Reuters) – Ryanair (RYA.I) expects to return to pre-COVID revenue ranges this 12 months or subsequent however the restoration stays fragile and will nonetheless be knocked off beam by oil costs, geopolitics or an Omicron wave, Chief Government Michael O’Leary mentioned on Monday.

O’Leary was talking after his airline, Europe’s largest by passenger numbers, posted a revenue of 170 million euros ($174 million) for the three months to the top of June, the primary quarter of its monetary 12 months.

That was effectively in need of the 243 million euro revenue in the identical quarter of 2019, when it flew 15% fewer passengers, however forward of the 157 million forecast in an organization ballot of analysts.

“We’re clearly seeing a powerful restoration, there’s clearly loads of demand, however it is vitally fragile and able to being broken at very brief discover if there may be antagonistic COVID or antagonistic Ukraine developments,” he informed traders in a name.

Ryanair shouldn’t be prepared to offer a revenue forecast for the present monetary 12 months which ends on March 31, as a result of uncertainty, he mentioned.

The price range airline will match pre-COVID post-tax revenue ranges – by incomes not less than 1 billion euros in a 12 months – however it’s unclear if that will probably be within the present or the following monetary 12 months, O’Leary mentioned.

Ryanair shares fell 1% early buying and selling however had been 2.8% greater at 1125 GMT after O’Leary’s investor name.

Ryanair, which made some extent of holding its pilots and crew up-to-date with their flying hours in the course of the pandemic, has established itself in the course of the restoration as Europe’s largest airline by passenger numbers, pulling forward of the Lufthansa Group. (LHAG.DE)

It expects to fly 15% extra passengers than 2019 in the course of the summer time months with an additional 10% progress anticipated by subsequent summer time, O’Leary mentioned. Simply 4% of seats had been left empty on flights in July with the identical degree anticipated in August, he mentioned.

Ticket pricing for bookings for the July-September quarter, sometimes Ryanair’s most worthwhile interval of the 12 months, are monitoring greater than 2019 ranges by a low double-digit proportion, O’Leary mentioned.

However ahead bookings are 7-8% behind the identical time in 2019. That creates uncertainty as last-minute costs might be far greater however is also far decrease if there may be some unexpected disruption, he mentioned.

Ryanair is unlikely to return money to shareholders in its present or subsequent monetary 12 months as it is going to be targeted on paying down capital expenditure, Chief Monetary Officer Neil Sorahan mentioned.

Ryanair is in common contact with Boeing (BA.N) however the U.S. aircraft producer is “not anyplace shut” to the pricing ranges that might be required to maneuver ahead with a big order for the upcoming 737 MAX 10, Sorahan mentioned.

Writing by Conor Humphries; modifying by Uttaresh.V, Vinay Dwivedi, Kirsten Donovan

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