Ryanair has reported a net profit of €1,260m for the six months April to September 2022, the first half of the airline’s financial year.
Scheduled revenue increased almost 250% year-on-year to €4.42bn as traffic recovered strongly from 39.1m to 95.1m passengers, with a 94% load factor.
The company said that record Q2 traffic and strong peak summer fares (+14% over pre-Covid) offset a weak Easter in Q1, which saw traffic and fares impacted by Russia’s invasion of Ukraine.
Ancillary revenue in the period was an average of €23 per passenger, adding €2.2bn to revenue, which totalled €6.62bn for the six months.
In H1 2019, before Covid, revenue as €5.4bn and net profit was €1.15bn.
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Chief executive Michael O’Leary said concerns about the impact of recession and rising consumer price inflation on Ryanair’s business model have been “greatly exaggerated”.
“As the lowest cost producer in Europe, we expect to grow strongly in a recession as consumers won’t stop flying, but rather they will become more price sensitive," he stated.
“Like Aldi, Lidl, Ikea and other price leaders, our very strong post-Covid recovery shows that price will continue to drive market share gains as we add low-cost, more fuel-efficient aircrafts to our fleet over the next four years.
"As Europe recovers from the two-year Covid pandemic there has been a considerable contraction of short-haul capacity, much of which will not return in the medium term. Most of our EU competitors have cut capacity by up to 20% this winter while Ryanair will offer 10% more seats than pre-Covid.”
O’Leary added that he expects these fundamentals will continue to underpin robust traffic and average fare growth for the next 18-months at least.
“Ryanair will be the main beneficiary of these trends so long as there are no negative developments this winter such as Covid variants or Ukraine,” he said.
“Forward bookings remain strong over the October school mid-terms and into the peak Christmas travel period. As is normal, at this time of year, we have almost zero visibility into Q4 which is traditionally our weakest quarter and which this year doesn’t have any Easter benefit.”
O’Leary signalled that the full year (to March 2023) passenger traffic should be 168m, up 13% on pre-Covid traffic.
“If we are fortunate to avoid such negative events like Covid and Ukraine in H2, then thanks to our very strong traffic recovery our advantageous fuel and currency hedges and our widening cost and market share leadership over competitors, we are hopeful that we will minimise our winter losses, which would enable us to deliver a full-year net profit in a range of €1.0bn to €1.2bn.”
"This cautious guidance will remain hugely dependent on not suffering adverse events this Winter (as we did last, which were clearly beyond our control).”
The Ryanair share is currently trading at around the €12.70 level, with sentiment surrounding the stock adversely impacted since Russia's invasion of Ukraine last February.
